Bähr - The Politics of Means and Ends

The Politics of Means and Ends
Policy Instruments in the European Union
Holger Bähr
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Policy Instruments in the European Union
Holger Bähr
University of Konstanz, Germany
© Holger Bähr 2010
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system
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Holger Bähr has asserted his right under the Copyright, Designs and Patents Act, 1988, to be
identified as the author of this work.
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British Library Cataloguing in Publication Data

Bähr, Holger.
The politics of means and ends : policy instruments in the
European Union.
1. Political planning--European Union countries. 2. Power
(Social sciences)--European Union countries.
3. Environmental policy--European Union countries.
4. European Union countries--Social policy.
I. Title
320.6'094-dc22
Library of Congress Cataloging-in-Publication Data

Bähr, Holger, 1975-
The politics of means and ends : policy instruments in the European Union / by Holger Bähr.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-4094-1070-6 (hardback) -- ISBN 978-1-4094-1071-3 (ebook)
1. Environmental policy--European Union countries. 2. European Union countries--Social
policy. 3. Political planning--European Union countries. 4. Policy sciences. I. Title.
GE190.E85B34 2010
363.7'0561094--dc22
2010021631
ISBN 978 1 4094 1070 6 (hbk)
ISBN 978 1 4094 1071 3 (ebk) II
Contents
List of Figures and Tables vii

List of Abbreviations ix
Acknowledgements xi
Introduction 1
1 Explaining Policy Instruments 11
2 Comparing Policy Areas 55
3 European Environmental Policy 73
4 European Social Policy 117
5 Policy Instruments in European Environmental Policy

and European Social Policy 159
6 Conclusion 179
Annex 185
Bibliography 187
Index 211
List of Figures and Tables
Figures
1.1 Explanation of Policy Instruments 39

3.1 Ratio of Hard Law to Soft Law in European Environmental Policy 82
4.1 Ratio of Hard Law to Soft Law in European Social Policy 127
Tables
1.1 Policy Instruments in the EU 18

3.1 Examples of Policy Instruments in European Environmental Policy 78
4.1 Examples of Policy Instruments in European Social Policy 123
5.1 Types of Policy Instruments in European Environmental Policy
and European Social Policy 161
5.2 Cleavage Structure in European Environmental Policy and
European Social Policy 163
5.3 Institutions in European Environmental Policy and European
Social Policy 167
5.4 Politicisation of Policy Problems in European Environmental
Policy and European Social Policy 170
5.5 External Events in European Environmental Policy and European
Social Policy 173
5.6 Similarities between European Environmental Policy and European
Social Policy 175
5.7 Differences between European Environmental Policy and European
Social Policy 175
List of Abbreviations
CEEP European Centre of Enterprises with Public Participation and of

Enterprises of General Economic Interest
DG Directorate General
EC European Community
EEB European Environmental Bureau
EEC European Economic Community
EES European Employment Strategy
EMAS Eco-Management and Audit Scheme
EMU European Monetary Union
EPI Environmental Policy Integration
ESF European Social Fund
ETUC European Trade Union Confederation
EU European Union
Euratom European Atomic Energy Community
ILO International Labour Organization
IMF International Monetary Fund
LIFE Financial Instrument for the Environment
NGO Non-Governmental Organisation
OCHA Office for the Coordination of Humanitarian Affairs
OECD Organisation for Economic Cooperation and Development
OMC Open Method of Coordination
REACH Registration, Evaluation and Authorisation of Chemicals
TEC Treaty Establishing the European Community
UEAPME European Association of Craft, Small and Medium-Sized
Enterprises
UNECE United Nations Economic Commission for Europe
UNEP United Nations Environment Programme
UNICE Union of Industrial and Employers’ Confederations of Europe
Acknowledgements
I was fortunate to receive a great deal of help from many people in conducting
my studies and writing this book. This book contains the findings of a research
project that was completed at the University of Konstanz in the summer of 2009.
I wish to thank Volker Schneider who was a source of constant encouragement
and insightful critique. To Wolfgang Seibel and Sven Reichardt I wish to offer
my thanks for supporting my scientific ideas without hesitation. I also wish to
thank Frank Janning for insights into the systematic application of methods of
qualitative research.
Most parts of the book I wrote at the Institute for Advanced Studies in Vienna.
I am deeply grateful to my colleagues at the Institute for Advanced Studies who
created a warm and friendly atmosphere that made me pleasantly cycle to the
institute almost every morning. Furthermore, Gerda Falkner backed my research
activity and gave me the support that let me finish this project. In recurring
discussions with Oliver Treib I was able to clear my mind. I profited from his
insight of both theoretical concepts and empirical facts. Sylvia Kritzinger and
Patrick Scherhaufer provided me with advice in respect of various academic
questions.
In the context of the research project on New Modes of Governance (NEWGOV),
I had the opportunity to present an outline of my project at the European University
Institute in Florence. I wish to thank Renate Mayntz who examined my outline
and gave me valuable critiques. Furthermore, I wish to thank Jelle Visser and the
participants in the discussion who created a lively and stimulating scientific debate
that kept me motivated while my studies proceeded.
A number of people made time for giving me an interview. They represented
organisations that are involved in policy-making in the European Union. Their
expertise provided the basis for describing essential characteristics of European
environmental policy and European social policy. I wish to thank the interviewees
for their assistance.
Last, but not least, I owe thanks to Lydia Wazir-Staubmann who read the entire
manuscript and corrected mistakes.
All the people mentioned above contributed to make the argument clear and
the book coherent. The reader will judge whether these attributes apply. Needless
to say that all errors and shortcomings are my own responsibility.
Konstanz, April 2010

Introduction
The European Commission plans to introduce a trading scheme for renewable

energies. The Emission Trading Scheme passed by the Kyoto Protocol and adopted
by the European Union (EU) serves as a model. The Commission proposal is part
of the strategy to increase the use of renewable energy sources and to reduce the
emission of greenhouse gases by 20 per cent, respectively, until 2020. Also, a
voluntary agreement of car manufacturers aims to reduce greenhouse gases. In 1998
the umbrella organisation of car manufacturers agreed on a covenant to reduce the
carbon dioxide emissions of new passenger cars to 140 grams per driven kilometre
by the year 2008. However, already in mid-2006 newspapers reported that car
manufacturers would fail to achieve this reduction target intended by the voluntary
agreement of the car industry. Moving to another policy area, politicians both in
the nation states and in the EU are discussing the establishment of a minimum
income that may be fixed either by legislation or by a collective agreement between
employers and employees. A minimum income should guarantee a life devoid of
poverty and protect people from social exclusion. In 2007, member states that
introduced a relatively high minimum income by legislation provided a statutory
minimum wage that ranges between 7.93 and 9.08 euros per hour. Other member
states stipulate lower minimum wages or rely on collective agreements in order to
ensure equitable wages and prevent social exclusion. These press reports covering
issues of environmental policy and social policy have one thing in common: they
deal with policy instruments. Policy instruments are means to achieve ends. In the
examples above, both the trading scheme for renewable energies and the voluntary
agreement are applied in order to reduce carbon dioxide emissions and thus
combat climate change. Social exclusion and poverty are tackled by both a legal
standard of minimum income and an equivalent agreement between employers
and employees.
Policy instruments are defined as ‘the myriad techniques at the disposal of
governments to implement their public policy objectives’ (Howlett 1991: 2). More
than a decade later, the same author defines policy instruments as ‘techniques
of governance that, one way or another, involve the utilization of state authority
or its conscious limitation’ (Howlett 2005: 31). The term governance describes
rule systems of societal coordination and control. Both definitions consider policy
instruments as techniques to achieve policy objectives. However, they differ in the
role and position they ascribe to public and private actors in the political process.
The first definition takes the perspective that governments, i.e. public actors, are
the central actors in policy-making who intentionally intervene in society in order
to achieve their policy goals by constraining and facilitating a certain behaviour
of private actors. The second definition abandons the notion of a central position
of state actors. Although a prominent role is still attributed to public actors, their
authority may be limited, and private actors are granted a greater role in policy-
making. The conditions and the scope of using policy instruments are subject to
both theoretical debate and the concepts of political steering and governance.
Therefore, the conceptual relation between policy instruments, political steering
and governance is discussed in detail at the beginning of Chapter 1. In this book,
governance and political steering are used synonymously, in general, and policy
instruments are conceived as a specific dimension of governance.
Relevance of Policy Instruments
Policy instruments are subject to political debates, as the above mentioned examples
briefly illustrate, and have concrete effects on people when, for example, farmers
receive subsidies, citizens pay taxes and consumers are informed by product labels.
Besides the relevance of policy instruments to every day politics and societal life,
policy instruments are relevant to political science as a category of analysis. As set
forth by Hood (2007), scholars have been studying policy instruments for centuries.
Early examples of policy instruments discussed since the sixteenth century include
means of preventing crime, enhancing public welfare, and protecting from fraud
and an arbitrary use of power. Since the mid-twentieth century, several theoretical
approaches emerged in order to analyse policy instruments. There is a timeless
element in the analysis of policy instruments because ‘debating alternative possible
ways of keeping public order, enforcing laws, or collecting revenue is a classical
concern of political thought’ (Hood 2007: 128).
Policy instruments constitute a main element of governing. They link
governments’action to the distribution of societal resources (Kooiman 2003: 43–57).
As Lascoumes and Le Galès (2007) argue, analysing the use of policy instruments
reveals patterns of the relationship between those people and organisations who
govern and those who are governed. Policy instruments are means of controlling
and coordinating both public and private actors. Although policy instruments are
techniques to achieve policy objectives, they are not merely technical in a sense
that they are neutral as far as their effects are concerned. Policy instruments seek
to solve policy problems, like climate change, waste disposal, social exclusion and
unemployment, but also may incur costs for businesses that have to comply with
environmental and social standards, create relative competitive advantages as a
result of fostering new technologies, and favour economic growth at the expense
of environmental protection and social welfare, or vice versa.
The notion of policy instruments includes both actors who seek to solve
policy problems and actors who struggle for political power. Dahl and Lindblom
(1953: 16–18) argue that policy instruments lie at the heart of the policy process.
When political actors debate a concrete issue, they do not exchange general
ideological claims of capitalism, socialism or liberalism. This does not mean that
ideological differences between political actors are not relevant to the political
Introduction
process. Rather, ideological differences are adapted to the more concrete level
of choosing policy instruments. Dahl and Lindblom further argue that technical
aspects of solving policy problems and using suitable policy instruments may be
pushed forward, when ideological differences between political actors decline.
Salamon (1981: 264–5) also emphasises that focusing on policy instruments
contributes to understanding the process of policy-making. He argues that policy
instruments constitute the link between the formulation of policy-outputs, i.e. the
results of decision-making, and their implementation. Each policy instrument is
supposed to have certain characteristics. These characteristics shape the way of
societal coordination and control by affecting the effectiveness of solving a policy
problem, the capability of authorities that implement the policy output, and the
relative welfare of the actors concerned by the policy output. Hence, the choice of
policy instruments is not just a technical issue, but involves questions of political
power and the distribution of societal values.
Given the relevance of policy instruments, this book asks the question: Why
do certain policy instruments emerge? Parallel to this question but formulated
from an actor-centred perspective, the research question of this study is: Why do
political actors choose certain policy instruments to attain their desired policy
goals? European environmental policy and European social policy constitute the
cases that are analysed in this book in order to answer the research question. In
addition to the general merit of analysing policy instruments, the comparative
analysis of two European policy areas seeks to contribute to the current discussion
in European research of political science and policy analysis in two ways. First, by
analysing policy instruments at the European level, a theoretical concept that was
developed in the context of the nation state is applied to the EU. Scharpf (2001: 3–4)
suggests that concepts and theoretical approaches that were developed in order
to explain policy-making in nation states and other jurisdictions should be used
when policy-making in the EU is analysed. This procedure has the advantage that
the EU is not regarded as a unique entity and thus enables comparative empirical
studies as well as reference and contribution to existing concepts and theories.
Second, by analysing policy instruments in European environmental policy and
European social policy, this book compares two policy areas. It proceeds from
the widely accepted statement that policy-making takes places within a policy
area. By comparing policy areas, characteristics specific to the policy area may be
identified as explanatory factors of policy instruments.
In addition to the substantive argumentation in favour of analysing policy
instruments outlined above, there are also methodical reasons for choosing
policy instruments as an object of analysis. According to Hood (1983: 115–
31), the perspective that analyses the process of policy-making by focusing on
policy instruments has three advantages. First, it reduces complexity because
the multitude of activities of political actors can be grasped by a limited
number of types of policy instruments and specific combinations of these types.
Second, it points to possible alternatives of political activities by charting the
variety of policy instruments from which political actors could choose. Third,
it enables comparative analyses across time, policy areas and political systems
due to typifying policy instruments. The advantages mentioned by Hood are
synonymous with the merits of using theoretical concepts in order to establish
types of empirical phenomena and applying them to comparative research (Sartori
1970: 1035–9). Hence, the advantages mentioned do not exclusively support the
analysis of policy instruments, but the classification of policy instruments based
on theoretical concepts.
Therefore, classifications of policy instruments put forward by contributions
of political science are discussed in detail in section 1.1. The discussion of the
existing literature arrives at six types of policy instruments that cover all policy
instruments in European environmental policy and European social policy.
Two dimensions define these policy instruments. On the one hand, there is the
governance dimension, which reflects general modes of societal coordination and
control, namely hierarchy, market and network. Governance instruments refer to
the relation between the authorities that govern and those people and organisations
that are ultimately addressed by the instruments like citizens, consumers and
producers. Governance instruments are command and control instruments,
economic instruments and suasive instruments. On the other hand, there is a
legal dimension of policy instruments that reflects the relationship between the
EU and its member states. Legal instruments constitute the legal form in which
governance instruments are adopted. There is European legislation summarised
as hard law, which legally binds member states to implement the provisions of
the policy output. Furthermore, there are policy outputs summarised as soft law,
which do not have a binding effect on member states. Thus, implementation by
the member states cannot be legally enforced. Since both dimensions constitute a
policy instrument, six types can be identified.
Finally, conceptual clarity is seen as an advantage of conceiving the action of
governments and other authorities in terms of policy instruments. By separating
the way of achieving policy goals from these goals as such, the concept of policy
instruments does not mingle the effects of different causes. The effects of policy
instruments and the effects of substantive provisions are considered separately.
The same policy instrument may have different effects on various people and
organisations depending on the substantive policy goal. For example, if a public
authority approves the construction of an industrial facility, this decision may be
welcomed by the operator but opposed by residents. Vice versa, if public authorities
prescribe the installation of filters in order to protect ambient air from pollution,
this move may be supported by citizens but rejected by the businesses that have to
install the filters. In addition to the policy instrument applied and the policy goal
pursued, the effects of public authorities’ action depend on the contextual factors
of the political system. In order to account for the factors that affect the way of
societal coordination and control and their effect on people and organisations, the
concept of policy instruments has to be included in a theoretical framework (Dose
2003: 30).
Introduction
Theoretical Framework
A theoretical framework identifies explanatory factors and specifies the linkage

between cause and effect. A theoretical framework has the same logical structure
as a theory but is more general insofar as it does not allow the deduction of concrete
hypotheses. A theoretical framework provides an overarching system to combine
and to compare theories (Scharpf 1997: 24–31). Hence, by applying a theoretical
framework different explanatory approaches may be included in an encompassing
explanation. The theoretical approaches developed in the existing research of
political science in order to explain the choice of policy instruments in European
environmental policy and European social policy may be summarised in three
hypotheses that are discussed in section 1.2. First, the national interest hypothesis
presumes that those policy instruments are chosen that meet the interests of
member states. The policy problems that are tackled in the policy process are
highly politicised. Conflict emerges because member states pursue diverging
interests. Institutions conceived as boundary rules and decision rules provide veto
points at which political actors may block a decision, if they do not agree with the
subject matter or the policy instrument of the proposed policy output. Second, the
ideological belief hypothesis makes similar presumptions. However, in contrast to
the national interest hypothesis, it is argued that conflict emerges due to different
ideological beliefs, mainly between left-wing actors on the one hand and right-
wing actors on the other. Again the politicisation of policy problems affects the
level of conflict and institutions provide the opportunity to block a decision.
Third, in contrast to the previous two hypotheses, the problem-solving hypothesis
presumes a low level of conflict because negotiations at the European level are
dominated by efforts to find effective solutions to policy problems in the common
interest. Policy problems are not highly politicised and the actors involved do not
consider making use of veto points.
In this book, the three hypotheses are included in a theoretical framework
in order to combine and compare their explanatory strength. Both actor-centred
institutionalism and the advocacy coalition framework constitute a theoretical
framework to analyse the emergence of policy instruments. Both frameworks
consider structures that affect political actors and the actors involved in policy-
making in order to explain policy decisions and their implementation. There are
overlaps and differences between the two frameworks, which are discussed in
section 1.3. Some elements of the advocacy coalition framework are added to
actor-centred institutionalism that is used in this study in order to integrate the
different theoretical approaches of the existing research into an encompassing
explanation of policy instruments. This study could have also applied the advocacy
coalition framework added by elements of actor-centred institutionalism. The
result would have be the same, only in a different terminology. Since actor-
centred institutionalism has an affinity with the concept of political steering and
governance as described in section 1 (Mayntz and Scharpf 1995a: 39), it is chosen
as a structuring framework in this study.
Several contributions of political science have structured theoretical approaches

of explaining policy instruments on the basis of their conceptual and theoretical
focus, the national origin of the respective researchers and the subsumption into
more general theories (Schneider and Ingram 1990: 522–4, Howlett 1991, Bruijn
and Hufen 1998: 15–17, Linder and Peters 1998, Jordan, Wurzel and Zito 2003:
17–21, Hood 2007). This book proceeds differently. It looks at single explanatory
factors and includes these factors into a theoretical framework. It is argued that
all factors that have been put forward in political science in order to explain the
choice of policy instruments can be assembled by four bundles of variables that
are structured by actor-centred institutionalism. These variables are: characteristics
of policy instruments, actor constellations, modes of interaction and situational
structures, namely institutions, the politicisation of policy instruments and
external events. Each of these factors is subject to theoretical consideration of
policy analysis and is discussed at length in section 1.4.
By including the factors relevant to the explanation of policy instruments into an
overarching theoretical framework and applying this framework in a comparative
study of two policy areas of the EU, this study aims at contributing to the current
research of political science, as argued above. However, it does not claim originality
of its components, but only of the composition of its elements. Elements of the
procedure followed in this study have been applied in a number of studies. Policy
instruments are analysed to a large extent in environmental policy but also in other
policy areas both at the national level and the European level (e.g., Zittel 1996,
Golub 1998a, Bailey 2003, Wincott 2003, Jordan, Wurzel and Zito 2005). Böcher and
Töller (2007) include explanatory approaches into a theoretical framework in order
to explain the choice and change of policy instruments in German environmental
policy. Döhler and Manow (1997) identify internal structures and patterns specific to
a policy area, taking the example of German health policy. Eichener (1997) looks at
policy decisions in both European environmental policy and European social policy,
when he focuses on problem-solving in regulatory policy-making. The studies
mentioned point to the path taken in this study.
This study aims at encompassing a wide strand of policy analysis and European
research of political science, but there are two limits. This study analyses neither
the legitimacy nor the effectiveness of policy instruments (for that see e.g.,
Kohler-Koch 1998, Knill and Lenschow 2004, Scharpf 2006b). Legitimacy and
effectiveness are only considered insofar as they are part of the argumentation
of political actors when, for example, members of the European Parliament
prefer legislation because it is adopted in a democratically legitimised process,
or representatives of the European Commission argue that policy goals can be
effectively reached, when various policy instruments are applied in conjunction.
Different political actors may have different views on the legitimacy and the
effectiveness of policy instruments. Whether a policy instrument is indeed
legitimate and effective cannot be answered by this study.
In order to avoid methodical pitfalls when comparing policy areas, the delineation
of policy areas, the case selection as well as the method, data and analysis of this
Introduction
study are discussed in Chapter 2. The delineation of policy areas is essential to this
study because a policy area constitutes a case. There are four ways of delineating a
policy area. A policy area may be conceived as a social system or as a policy network
or be defined by organisations or political institutions. Since there is a great overlap
between the four ways of delineating a policy area, in the end, a policy area is defined
as a segment of a political system constituted by organisations that engage in political
issues of a common subject matter. European environmental policy and European
social policy are the environmental policy and social policy of the EU, that is, they
are constituted by organisations that are engaged in policy-making at the European
level. The two policy areas are selected as cases in this study due to their similarity
in respect of the main feature relevant to the research question. Since both policy
areas are dominated by regulatory policies, they contain a similar level and type of
political conflict. The level and type of conflict are the main features that distinguish
the three summarising hypotheses, sketched above. The empirical analysis of policy
instruments in the two policy areas is based on interviews with experts, primary
documents of the organisations involved and secondary literature. The interviews
with experts have been transcribed and analysed by qualitative content analysis.
The methodical chapter ends with the argument that the real orientations of political
actors cannot be detected but can only be inferred from the behaviour and statements
of these actors.
Empirical Evidence
The methodical procedure discussed in Chapter 2 is applied in order to provide

empirical evidence that allows the inference of causes and effects and, thus,
explains the choice of policy instruments. The inference of causes and effects from
the empirical data is based on the theoretical framework developed in Chapter
1. The explanatory factors identified in Chapter 1 guide the empirical analysis.
Chapter 3 and Chapter 4 describe characteristics of the policy area, types of
policy instruments and factors relevant to the explanation of policy instruments in
European environmental policy and European social policy, respectively. In both
policy areas, political actors with diverging interests and beliefs oppose each other
during negotiations of policy formulation at the European level. A similar cleavage
structure describes the actor constellation in European environmental policy and
European social policy. Actors who aim at non-economic goals of environmental
protection and social equity, respectively, oppose actors who pursue economic
growth. Furthermore, actors who prefer regulation at the European level face
actors who favour political steering at the national level. The respective actors
prefer different types of policy instruments. The actors’ preferences for certain
policy instruments result from the actors’ motivation and the characteristics of
policy instruments. Actors are motivated by interests and beliefs that are reflected
in policy instruments because different policy instruments exert different degrees
of coercion on the addressees of political steering. Related to the degree of
coercion contained in policy instruments, different actors also consider different

policy instruments as effective.
European environmental policy aims to protect and improve the quality of
air, water and soil, prevent pollution of the natural environment and conserve the
habitats of animals and plants. Command and control instruments and hard law
are dominantly used in order to achieve these aims. Two policy positions represent
the poles of the political spectrum within the actor constellation of environmental
policy. On the one hand, actors demand command and control legislation in order to
protect the environment. Command and control legislation is considered effective
because it compels national governments and citizens, consumers and producers
in the member states to comply with environmental standards. On the other hand,
actors favour the absence of regulation, but prefer suasive instruments and soft
law, which rely on voluntary compliance, if any regulation is adopted. They argue
that the coercion exerted on the addressees of political steering has to be reduced in
order to foster economic growth that again provides the wealth needed in order to
protect the environment. The actors engaged in environmental policy-making face
situational structures that affect their course of action. Institutions provide the co-
decision procedure for most decisions of European environmental policy. The co-
decision procedure requires an absolute majority in the European Parliament and a
qualified majority voting in the Council of the European Union in order to adopt a
legal act. A number of environmental policy problems may be tackled on the basis
of scientific evidence, which reduces their level of politicisation. However, several
environmental policy problems are highly politicised because their solutions
involve economic cost and are subject to different regulatory approaches of the
member states. Finally, industrial accidents and natural phenomena, whose effects
are aggravated by human behaviour, represent external events that affect policy-
making in European environmental policy.
European social policy aims to improve living and working conditions, combat
discrimination and social exclusion, guarantee proper social protection and social
security and promote employment. These aims are implemented to a significant
extent by both command and control legislation and suasive instruments in the
form of soft law. Two policy positions mark the boundary of the actors’ preferences
within the actor constellation of European social policy. On the one hand, there
are actors who call for command and control legislation in order to achieve social
equity. They argue that binding standards are required in order to prompt businesses
to improve living and working conditions. On the other hand, there are actors who
aim at economic growth by reducing the regulatory burden on industry. They argue
that suasive instruments and soft law as well as the absence of any regulation do not
constrain businesses and, thus, foster economic growth that again results in social
equity. Situational structures provide the actors of European social policy with both
opportunities and constraints. In addition to the co-decision procedure, institutions
provide the consultation procedure that requires unanimity in the Council of the EU
as well as social dialogue that may be used as an alternative route to the legislative
procedure. The politicisation of policy problems is low when issues of health and
Introduction
safety at work and anti-discrimination are on the agenda. In contrast, a number of

policy problems are highly politicised because their solutions involve economic
cost and member states aim to preserve their national welfare regimes that may be
under constraint from European legislation. External events that directly affect the
choice of policy instruments in European social policy are rare.
In Chapter 5 European environmental policy and European social policy are
systematically compared by identifying both similarities and differences between
the two policy areas. On the basis of the theoretical framework developed and
applied in this book, the choice of policy instruments in European environmental
policy and European social policy is explained. Command and control instruments
and hard law are dominant in European environmental policy, whereas suasive
instruments and soft law are of greater relevance to political steering in European
social policy. Hence, factors that have a similar value in the two policy areas may not
account for the difference in policy instruments, while factors that differ between
the two policy areas may explain the different policy output. Among the factors
identified for the explanation of policy instruments situational structures differ
between European environmental policy and European social policy and may,
thus, explain the choice of policy instruments in the two policy areas. Institutions
that do not provide many veto points, a low politicisation of policy problems,
and external events that increase the public acceptance of political steering and
put pressure on political actors to make decisions, provide political actors with
the opportunity to adopt command and control instruments in the form of hard
law. Vice versa, if institutions require unanimous decisions, policy problems are
highly politicised and external events are absent, suasive instruments and soft law
emerge.
Chapter 1
Explaining Policy Instruments
Policy instruments are the object of explanation in this study. Technically speaking,
policy instruments are the dependent variable and the types of policy instruments,
as described in the next section, are the values of the dependent variable.
Policy instruments are the manifestation of ways of political steering. Despite
differences between theoretical approaches in respect of effectiveness, operation
mode and range, political steering can be defined as the intentional intervention
of political actors in societal subsystems including the political system (Mayntz
1995). Political steering again is used synonymously with governance (Héritier
2002: 185, Peters 2005a: 71). If governance is defined as political steering, the
types of policy instruments reflect modes of governance. However, the fact that
policy instruments, political steering and governance refer to the same empirical
phenomena should not obscure that there are differences in the usage of these
terms in respect of abstraction, application and scope. This section shall clarify the
usage of the terms policy instruments, political steering and governance.
Policy instruments are identified as a touchstone of governance that can be used
for empirical analysis. While the term governance is not used consistently, policy
instruments, as an object of analysis, are concrete and precise enough to observe
modes of governance in policy areas (Jordan, Wurzel and Zito 2005: 478–80).
There are various definitions of governance which highlight different aspects of
policy-making, refer to different levels of abstraction and cover a different scope
of application (Rhodes 2000: 55–63, Kersbergen and Waarden 2004: 144–51).
Generally, governance denotes a rule system of societal coordination and control
of interdependent actors. Hierarchy and market constitute the opposed ends of
a continuum of governance modes. The triad of hierarchy, market and network
is frequently referred to as modes of governance (Schneider and Kenis 1996,
Mayntz 2005). Modes of governance in this general conception are reflected
in types of policy instruments. However, governance abstractly describes ways
of coordination and control, whereas the concept of policy instruments is more
concrete. Policy instruments indicate ways of political steering.
Political Steering
There are two opposing approaches in the debate on political steering that mark
the boundary of the spectrum of theoretical approaches: approaches of systems
theory and actor-centred approaches. The approaches differ in the conception of
political steering, the way political steering is deemed to operate, the potential scope
that is ascribed to political steering, and the assessment to which degree political
12 The Politics of Means and Ends
steering is possible. On the one hand, from an action theory perspective, Scharpf
(1989b) conceives political steering as the opportunity of intentional intervention in
functional subsystems of society in order to achieve policy goals. Actors constitute
both the agents of political steering [Steuerungssubjekte] and the addressees of
political steering [Steuerungsobjekte]. However, political steering is not carried
out by a single actor but by a constellation of different actors who differ in their
resources, interests and interpretations of the respective situation. In principle,
intentional interventions are possible, but the capability of political steering depends
on the actors involved, the actor constellation and the pattern of interaction among
these actors. On the other hand, from a systems theory perspective, Luhmann (1989)
neglects the relevance of actors and argues that political steering understood as
interventions across societal subsystems is not possible. Political steering can only
be conceived as a minimisation of internal differences of the political system. Like a
thermostat that turns on the heating when the room temperature falls under a certain
threshold, political steering occurs when sequential information about a property of
the political system differs to a certain degree.
Luhmann’s (1988: 46–51, 324–49) conception of political steering solely as
internal process within the political system is not only criticised by action theory
authors but also modified by authors of systems theory. Willke and Teubner
(Teubner and Willke 1984: 30–3, Willke 1992: 341–6) conceive political steering
as decentralised context steering [dezentrale Kontextsteuerung]. They argue that
political steering takes place in the interaction relation between systems, for example
in systems of negotiation. Political steering refers to the context of systems, that is, it
respects the internal logic of the respective system, and is decentralised, that is, the
political system operates as a supervisor at the same level as other subsystems and
does not constitute a superior authority of intervention. Druwe and Görlitz (1992:
153–6) conceive political steering as setting perturbations, i.e. unusual changes,
in the environment of the respective societal system which create a stimulus to
this system. Political steering is non-hierarchical and non-deterministic. It can
only change the conditions under which internal change in societal systems may
take place. Finally, Münch (1996: 45–72) argues that elements of the political
system are represented in other societal systems and vice versa. Political steering
takes place in this area of interpenetration of societal systems. Political steering is
regarded as making decisions which are collectively binding and affect processes
in other systems. However, political steering is not hierarchical and is based on the
exchange of services between the political system and other societal systems.
The action theory perspective and the systems theory perspective can be
combined, as shown by Schimank (1992). He distinguishes three forms of goal-
oriented and intentional intervention. First, actors can try to achieve their goals
by their own actions. Second, they can directly influence other actors who are
able to achieve a desired goal. Third, they can indirectly influence other actors by
moulding the structural context these actors face. Schimank focuses on the third
form of steering and identifies three structural dimensions that mould political
steering: orientations specific to a societal system, institutional rules and actor
Explaining Policy Instruments 13
constellations. Whereas systems theory approaches exclusively focus on system

orientations, action theory approaches regard institutions and actor constellations
as relevant factors which both enable and restrict actions. However, these three
structural dimensions are interdependent and not mutually exclusive.
Mayntz argues that the usage of the term political steering in both action
theory and systems theory has made the term vague. In order to clarify the concept
of political steering she suggests that political steering should be restricted to
intentional and goal-oriented actions by an agent of steering which is directed
towards an addressee of steering. Political steering seeks to change the situation
of the addressees compared to the situation that would occur if steering were
absent. Both the agent and the addressee of steering are conceived as individual or
collective actors. Whether political steering succeeds in achieving its goal is not
part of the definition (Mayntz 1987: 92–5). This conception of political steering
is oriented towards the action theory perspective. However, the exclusion of the
prospect of success of political steering and the defining property of intentional
intervention integrates the different approaches. Although the approaches to
political steering differ in respect of the scope they ascribe to political steering,
they all, with the exception of Luhmann, conceive political steering as a form of
intentional intervention which seeks to change or conserve a certain societal status
quo and is constrained by structural properties.
The actor-centred steering theory of the 1970s assumed that public authorities
act as agents of political steering by preventing undesirable actions and promoting
desirable behaviour of enterprises, citizens and other private actors that constitute
the addressees of steering. This conception of political steering by hierarchical
means is criticised both on theoretical and empirical grounds. On theoretical
grounds, as shown above, systems theory argued that the internal orientations
of societal areas limit the capacity of public authorities for political steering.
Furthermore, it points to the limitations of law as a policy instrument in complex
societies. Law is the policy instrument traditionally applied by public authorities
(Teubner and Willke 1984). On empirical grounds, later action theory approaches
recognise that the dichotomy of public agents and private addressees of political
steering is blurred. Actors that are affected by measures of political steering do not
merely react, but may participate both in the formulation and implementation of
policy outputs. Private actors are involved in policy-making by being part of policy
networks and corporatist arrangements. Moreover, sectoral self-organisation by
private actors may fulfil public tasks and thus substitute for intervention by public
authorities (Mayntz and Scharpf 1995b: 12–13, 19–20).
Governance
The governance perspective takes both criticisms into account. First, the governance
perspective accounts for non-hierarchical modes of political steering. Thus, there
is some tension between the terms governance and government. Government
refers to a way of governing by central public authorities, which possess formal
responsibility for regulation and are democratically legitimised and accountable

to citizens. Policy outputs are passed by legislation, which is legally binding and
enforceable by courts. In contrast, governance, in a restricted sense, excludes
governing by government and refers to policy-making by both public and private
actors. Decisions are taken in policy networks. Hierarchical relations between
actors are absent, and responsibility for coordination and control is shared between
public and private actors or taken by private actors alone. Policy outputs are not
legally binding. Thus, implementation relies on voluntary compliance of the actors
concerned (Rhodes 1997: 5–16, Richards and Smith 2002: 14–19). Besides this
restricted use of the term governance, governance is also used in a broad sense.
Governance in a broad sense encompasses the whole range of ways of political
steering, including both government on the one hand and governance in a restricted
sense on the other (Héritier 2002: 185). Second, in the governance perspective the
dichotomy of an agent of steering on the on hand and addressees of steering on
the other is diluted. The shift from steering theory to the governance perspective
represents a shift from a focus on actors, their capabilities and characteristics to
a focus on rule systems of coordination and control. Albeit without neglecting
the role of actors, the governance perspective focuses on institutional structures
(Mayntz 2005).
Compared to the steering theory, the governance perspective changes the focus
on political steering but does not change the object of analysis. There is a change
in the variety of policy instruments and in the multitude and interaction of actors.
However, there are still actors who adopt measures in order to coordinate and control
the behaviour of other actors and actors that are addressed by these policy measures.
Rosenau (1992: 4–5) argues that the property of goal-oriented and intentional
intervention is still part of the governance perspective, and that governance is a
phenomenon more encompassing than government, that is, that government
represents a specific type of governance. Both government and governance refer
to intentional interventions into society. Only the form of intervention differs.
Hence, the governance perspective develops state theory further. The context of the
production and distribution of public value changed. States no longer constitute a
central authority of intervention. Although powers are dispersed, public tasks are
still fulfilled but under changed conditions. The governance perspective accounts
for political steering under these changed conditions (Pierre and Peters 2000: 2–13,
Richards and Smith 2002: 14–15, 269–81, Schneider 2004).
In this study, the term political steering is used within the governance perspective
as described above. Furthermore, the expressions ‘agent of political steering’ and
‘addressee of political steering’ are continuously used while recognising that
both types of actors may be both public and private. Since policy instruments are
analysed by studies within the governance perspective and also by earlier studies
of national governments, theoretical approaches developed in the context of nation
states are also consulted in order to explain the choice of policy instruments at the
EU level. The following section describes types of policy instruments and their
occurrence in European policy areas.
1.1 Types of Policy Instruments
In studies that analyse policy instruments in the context of nation states, policy
instruments are also termed ‘tools of government’ (Hood 1983, Salamon 2002).
This term aptly expresses that policy instruments are means and techniques in
order to achieve policy goals. When the level of analysis shifts from the national to
the European level, governments are replaced by European political institutions.
Moreover, when the analytical perspective shifts from the steering theory of
the 1970s to the governance concept, a single public actor as agent of political
steering is replaced by various actors, both public and private. Thus, the context
of application and the actors who apply policy instruments change, but the tool
character of policy instruments does not vanish. There is a multitude of studies in
several scientific disciplines that identify types of policy instruments by creating
various classification schemes (for an extensive overview see König and Dose
1993). In order to show the variety of policy instruments and to indicate the
relevance of policy analysis in the national context to studies of European policies,
some early classifications, which emerged from studies in the national context, are
presented before setting forth a typology of policy instruments in the EU.
Classifications of Policy Instruments
An early and parsimonious classification is provided by Offe (1975: 85–100). He

identifies three groups of policy instruments: prohibitions and incentives, public
production of goods and services, and procedural steering. Prohibitions and
incentives are two poles of a continuum. On the one hand, prohibitions seek to
prevent the addressees of political steering from actions that result in non-desirable
outcomes. In the case of non-compliance, the addressees face sanctions. On the
other hand, incentives aim for desirable outcomes by enabling and facilitating
actions and favouring the addressees of political steering. The production of goods
and services by public organisations compensates for a shortage of common and
public goods or adds to the provision of goods and services in society, if these
are not sufficiently supplied by other actors. Finally, procedural steering defines
formal rules of decision-making. Although formal decision rules do not explicitly
state a certain policy goal, they affect the content of decisions by determining who
decides, and how and on what decisions are taken.
Scharpf (1976: 15) arrives at a different classification, although there is a great
overlap between both classifications. He divides Offe’s first and second group
into subgroups. Scharpf separates prohibitions from incentives by arguing that, in
combination with sanctions, prohibitions directly influence actions of addressees
of political steering, whereas incentives operate indirectly. Incentives can be both
positive (e.g. subsidies) and negative (e.g. taxes). In this terminology, procedural
steering is conceived as a special form of prohibitions. By distinguishing between
direct and indirect effects, public ownership is subdivided as well. While the
provision of services by public organisations directly applies to the clientele of
these services, the provision of infrastructure indirectly influences the actions of

addressees of political steering.
Classifying policy instruments in accordance with the underlying principle of
political steering, Windhoff-Héritier (1987: 27–34) adds a further group to the policy
instruments named by Offe and Scharpf. Beyond command and control, incentives
and public ownership, she identifies policy instruments that aim to achieve policy
objectives by setting a good example, providing information and persuading the
addressees of political steering. Principles of political steering indicate how policy
instruments affect steering addressees in order to make them behave in a certain way.
Policy instruments may affect policy goals by applying coercion, supply, incentive
or persuasion. In spite of using different terms, Hood’s (1983) classification scheme
represents all policy instruments that have been mentioned so far. According to
the resources applied by political actors, he distinguishes four categories of policy
instruments, namely nodality, authority, treasure and organisation. Nodality refers
to the possibility of political actors to achieve their policy goals by advice and
persuasion due to the central position in a social network, which allows the control
of information. Authority is based on legal power, which entails the ability to act by
command and control measures. Treasure is based on the possession of a stock of
money, which creates the capacity to freely exchange financial means. Organisation
denotes the capability of directly influencing societal conditions due to utilisation of
physical assets and skills of employees.
The classifications described so far comprise the whole of policy
instruments in respect of principles of political steering. Thus, policy
instruments can be classified into four types: legal provisions of command
and control exerting coercion on norm addressees to comply, positive and
negative financial incentives based on market mechanisms, persuasion relying
on reason and voluntary compliance, and provision and supply of goods and
services by public organisations. Further types of policy instruments either
constitute subtypes or refer to different aspects of policy instruments, that
is, not to the principle of political steering. This applies to categories like
infrastructure policy and procedural steering. Infrastructure policy, the supply
of immoveable commodities like railways, telephone lines and power stations
by public organisations, is subsumed within the provision of goods of services.
Establishing procedural norms operates by legal provisions of command
and control. Procedural norms differ from substantive standards in respect
of the content of the provision but not in respect of the steering principle
(Kaufmann and Rosewitz 1983: 30–42, König and Dose 1993: 88–93). More
recent contributions on the debate on policy instruments state a decreasing
role of public ownership. Nation states withdraw from providing infrastructure
and social services, public organisations are privatised and public shares in
enterprises are sold. Thus, there are three main types of policy instruments
left, which can be described as command and control instruments, economic
instruments and suasive instruments (Bruijn and Hufen 1998: 17–19). The
retreat of member states from providing public infrastructure is fostered by
the EU which itself does not engage in providing public services. While public
ownership is diminishing in the member states, it is absent at the European
level (Majone 1996: 54–6, Schneider and Häge 2008).
Albeit not adding further steering principles, a further dimension of policy
instruments, which is promising to clarify policy instruments in the EU, is already
discussed in the national context by Jann (1981: 61–9). He identifies external and
internal policy instruments. External and internal policy instruments are defined
according to the type of actors to whom they are addressed. External policy
instruments are directed towards the ultimate addressees of political steering,
for example enterprises are made to respect working conditions, consumers are
encouraged to buy environmental-friendly products. In contrast, internal policy
instruments are directed towards the implementing organisations, for example
administrations are directed to control emission values of factories, agencies are
responsible for establishing technical standards. The distinction of external and
internal policy instruments does not create a dichotomy of private and public actors.
On the one hand, external instruments are not restricted to private producers and
consumers but also refer to public organisations, for example when administrative
processes are urged to be efficient and accountable. On the other hand, internal
instrument do not only point at public administrations but also affect private
organisations, for example when they supervise technical standardisation.
The debate on policy instruments in the context of the nation state can be used
to classify policy instruments in the EU. The distinction between external and
internal instruments grasps the multi-level character of political steering in the
EU. While external instruments, like in the national context, point to the ultimate
addressees of political steering, internal instruments point to the member states
that implement European policy outputs. Since the attributes external and internal
refer to actors outside the political system and actors inside the political system
(Jann 1981: 60–1), the terminology may be confusing in the European context.
The member states are part of the political system of the EU by comprising the
European Council and the Council of the EU. However, national administrations
and other actors that implement European policy outputs and apply policy
instruments to the ultimate addressees of political steering in the member states
are only part of a wider system structure but do not belong to the main structure
of the EU political system (Tömmel 2006: Chapters 3, 5). Thus, in order to avoid
possible confusion, in the following, external instruments are termed ‘governance
instruments’ because they reflect modes of governance, and internal instruments
are named ‘legal instruments’ because they show the legal form of policy outputs.
Governance instruments and legal instruments constitute two dimensions that
classify policy instruments in the EU (Table 1.1). This typology should apply to
all European policy areas of the first pillar of the EU where decisions are taken
and implemented on the basis of the Treaty establishing the European Community
(TEC/EC Treaty). Certainly, it covers all policy instruments that are observed in
European environmental policy and European social policy, as will be shown in
section 3.1 and section 4.1, respectively.
Table 1.1 Policy Instruments in the EU
Governance Instruments
Command and Economic Suasive
Control Instruments Instruments Instruments
Hard Law
Legal
Instruments
Soft Law
Three types of governance instruments can be identified: command and control

instruments, economic instruments and suasive instruments. In popular expressions
these types are named sticks, carrots and sermons. Any governance instrument can
be classified as belonging to one of the three types (Vedung 1998: 29–30). The
classification is based on analyses in nation states, as discussed above, but also
on studies of policy-making at the EU level. Although the instrument approach of
policy analysis is in principle applicable to every policy area, at the European level it
is mainly applied to environmental policy (Golub 1998b: 2–6, Bailey 2003: 42–51,
Holzinger, Knill and Schäfer 2003: 105–13, Jordan, Wurzel and Zito 2005: 481–4).
Command and control instruments directly affect the addressees of political steering.
They establish legally binding provisions that prescribe specific goals and the way
these goals must be achieved. They set substantive standards and procedural rules by
regulation. Economic instruments, also called market-based instruments, indirectly
influence the behaviour of the addressees of political steering by using material
incentives. The incentives can be both negative and positive. Charges and taxes are
negative incentives, whereas subsidies and tax relief represent positive incentives.
Tradable permit schemes may function both as negative and positive incentives.
Suasive instruments provide information and seek to persuade the addressees of
political steering to behave in a certain way. They rely on voluntary compliance.
Suasive instruments cover audit schemes, benchmarking, best practice, product
labels, monitoring, peer pressure and voluntary agreements.
The three types of governance instruments reflect modes of governance, which
describe structural arrangements of societal coordination and control. Command
and control instruments reflect hierarchies, economic instruments reflect markets, as
indicated by also naming them market-based instruments, and suasive instruments
reflect networks. Hierarchies and markets constitute two poles of governance
modes. Hierarchy denotes a system of different ranks where the lower ranks are
bound to decisions and instructions of the higher rank. Hierarchy includes an
uncontested and lasting coordination between the actors within the hierarchical
structure. In contrast, in markets autonomous actors react independently to
changing circumstances. Consumers and producers react to market prices, which
are the result of demand and supply of goods. There are also market mechanisms
in policy-making, for example when interest groups compete for influence on
government decisions or political parties compete for electoral votes. In relation to

instruments, in hierarchies administrative control is strong but incentive intensity
is weak. In contrast, in markets incentive intensity is strong but administrative
control is weak. Between the two poles of hierarchy and market, there are hybrid
forms of governance. Networks are the main hybrid form. They combine elements
of both hierarchies and markets but cannot be reduced to a single governance
logic. Networks are composed of actors and the linkages between these actors. The
linkages comprise communication and exchange of resources like information,
expertise and trust (Kenis and Schneider 1991: 40–2, Williamson 1991: 277–81,
Schneider and Kenis 1996: 14–20).
Both types of governance instruments and modes of governance often occur
in combination in empirical reality. For example, policy instruments that use
incentives may contain components of command and control. Subsidies provide
financial incentives but eligibility for these subsidies is bound to conditions. The
conditions are an element of command and control, because if the conditions are
not met, subsidies are not paid. Another example is given by suasive instruments
that complement the use of command and control instruments. Information and
persuasion campaigns may remind addressees of political steering to comply with
regulation and thus increase the effectiveness of command and control instruments
(Windhoff-Héritier 1987: 28–34). What is true at the level of policy instruments
also applies to the governance level of social order. For example, in order to
operate smoothly markets need a minimum of trust between market participants
and a public authority which hierarchically ensures certainty of the law. Vice versa,
hierarchical states rely on market mechanisms in order to allocate resources and
democracies are based on the electoral competition of political parties (Streeck
and Schmitter 1985: 2, 7–8).
Legal Instruments
Governance instruments are written into legal instruments. In other words, legal
instruments contain governance instruments, and are synonymous with the legal
form. They indicate the type of legal act and specify its formal qualification. Legal
instruments in the EU are directives, regulations, decisions, recommendations,
opinions, resolutions and a few further instruments, which are, however, very
rarely used (Bogdany, Arndt and Bast 2004: 92, 97). All legal instruments are
policy outputs. A policy output is the result of the process of policy formulation.
It temporally precedes the policy outcome that refers to the consequences of
policy implementation (Windhoff-Héritier 1987: 18–19). Regardless of different
characteristics, European legal instruments can be classified into two types: hard
law and soft law. Hard law establishes legally binding commitments on member
states, whereas soft law contains only non-binding provisions. Derived from
international law, the concept of soft law is rejected by traditional lawyers who
regard the binding force as essential property of law (Bogdany, Arndt and Bast
2004: 111–12).
Nevertheless, other lawyers argue that soft law may have practical and certain
direct or indirect legal effects. Like hard law, soft law constitutes rules of conduct.
However, in contrast to hard law, there is no legally binding force attributed to
soft law. There are three main functions of soft law that describe the relation
between soft law and hard law in EU policy-making. First, soft law can be adopted
prior to legislation in order to prepare for legislation by providing information
and elaborating on legislative proposals but also by attracting support for future
legislation. Preparatory legal instruments are, for example, green papers, white
papers and action programmes. Second, soft law can be adopted after hard law
was passed in order to facilitate implementation, e.g. communications of the
Commission. In this case, soft law supports and supplements hard law by specifying
legal provisions and guiding interpretation of existing legislation. Third, soft law
can be adopted as an alternative to hard law. In this case, rules of conduct laid
down in soft law have to be as general in nature as in legislation. They must
be generally applicable, apply to open categories of addressees and refer to the
external relations between people and organisations. Soft law then pursues policy
goals. It is this third function that qualifies soft law as a policy instrument (Senden
2004: 111–20).
Legal policy instruments in the EU are either hard law or soft law. However,
the reverse is false. There are hard laws and soft laws that do not constitute a
policy instrument. Legal instruments of hard law encompass directives, regulations
and those decisions that do not have a specified addressee and do not function
as an administrative act. Legal instruments of soft law are those non-binding
policy outputs that are used as an alternative to legislation. The main soft legal
instruments are recommendations and resolutions. There are only few further
soft instruments designated as conclusions and declarations. Opinions are more
frequent but most of them have a preparatory character. Also communications are
not applied as policy instruments (Bogdany, Arndt and Bast 2004: 96–119, Senden
2004: 155–218).
1.2 Strands of Existing Research
As the two previous sections has shown, ways and opportunities of political
steering are subject to a broad academic debate. Moreover, there is a number of
theoretical approaches to explain the choice of policy instruments, each of them
highlighting different explanatory factors (see Schneider and Ingram 1990: 522–4,
Howlett 1991, Bruijn and Hufen 1998: 15–17, Linder and Peters 1998, Jordan,
Wurzel and Zito 2003: 17–21, Hood 2007). In this study, it is argued that the
existing approaches put forth in the political science literature in order to explain
the choice of policy instruments in European environmental policy and European
social policy may be grouped into three strands that may be summarised in three
hypotheses. The three strands of existing research differ in respect of the type and
level of conflict they identify during the process of policy-making. Nevertheless,
there is some degree of overlap between the three hypotheses. Conflict between
political actors within the policy area may be induced by national interests or
ideological beliefs. In both cases the level of conflict during policy-making is
high. In contrast, the level of conflict is low when political actors mainly aim
at looking for adequate solutions to policy problems. In this case, an opposition
to the proposed policy output is absent because actors pursue problem-solving
without looking at the possible solution to policy problems through the lenses of
national interests or ideological beliefs. The hypotheses focussing on interests and
beliefs share a similar level of conflict but vary in respect of the type of conflict,
whereas the level of conflict differs between these first two hypotheses on the
one hand and the hypothesis highlighting problem-solving on the other. For the
purpose of simplicity, the hypotheses are named after the respective source that
shapes conflict during policy-making: national interest hypothesis, ideological
belief hypothesis and problem-solving hypothesis. The following sections discuss
the argumentation as far as European environmental policy and European social
policy are concerned. Since the two policy areas are similar in respect of the level
and type of conflict because they are dominated by regulatory policy (cf. section
2.2), the arguments apply to both policy areas alike.
1.2.1 Conflict Between National Interests
Nation states have an interest in enhancing national welfare, protecting their

citizens and the national industry from negative external effects, and conserving
jurisdiction, regulatory approaches and administrative routines of domestic
policy-making. National interests are mainly represented at the European level
by the governments of the member states. They pursue policies which conserve
national autonomy, are positively valued by their citizens, and protect consumers,
foster employment and strengthens the competitiveness of enterprises in their
country (Scharpf 1996: 20). Hence, besides preserving national peculiarities,
member states have an interest in solving policy problems at the European
level that are relevant to the domestic political arena. Furthermore, national
governments are elected on the basis of party competition and their members are
recruited by political parties. Thus, both problem-solving and ideological beliefs
influence national interests, but problem-solving refers to policy problems at
the national level and ideological beliefs are conceived as rooted in national
patterns of policy-making. Approaches discussed in this section argue that
national interests constitute the main cleavage in European policy-making. Both
problem-solving and ideological beliefs are either less relevant or subsumed
within national interests. Conflict between national interests emerges when
member states pursue different national interests that are mutually exclusive.
Moreover, national interests provoke conflict between member states and
supranational organisations of the EU when the latter pursue further European
regulation while the former defend their national autonomy.
Defending National Autonomy
Streeck (1996) argues that, at the European level, it is the issue areas of social policy
that deal with interventions into the market and refer to the core of national welfare
states that rely on voluntarism. Member states defend their national autonomy by
adopting policy outputs that are non-binding in nature and thus do not exert a
high degree of coercion on themselves nor on the ultimate addressees of political
steering in the member states. Member states pursue soft law as legal instrument
and network-based governance instruments when the core of their national
welfare state is at stake, because much of their domestic legitimacy derives from
social policy. Furthermore, within the member states, social policy has resulted
in domestic actors gaining an interest in maintaining national social welfare
provisions. Binding legislation and command and control instruments have only
been adopted in issue areas of social policy that support market integration,
like policy outputs that regulate working conditions or enhance labour mobility
by providing community law for migrant workers. Member states do not ask
for a further harmonisation of social policy, and common social standards are
not regarded as necessary for the functioning of the common market. Social
policy at the European level is characterised by member states that on the one
hand have an interest in creating a common labour market, but on the other
have an interest in conserving their national welfare regimes (cf. section 4.2).
Supranational organisations of the EU try to use available instruments in order
to push some integration in social policy despite strong intergovernmental
constraints. Organisations that advocate market-correcting measures and a
further harmonisation of social policy on the basis of ideological beliefs are
weak in European social policy.
European social policy is characterised by a dilemma. On the one hand, the
economic integration has deprived member states of instruments to intervene
in the market in order to foster social protection. On the other hand, this loss
of national autonomy in social regulation cannot be compensated by an equal
extent of social integration. A further harmonisation of social policy is neither
feasible nor desirable, because the national welfare regimes are too diverse and
too deeply embedded in national statehoods. As a way out of this dilemma, the
open method of coordination (OMC) was introduced (Scharpf 2002: 650–2). The
OMC creates the opportunity to adopt European policy outputs which respect
the diversity of national policy-making. At the Lisbon Summit in 2000, already
existing procedures of soft coordination and control were put together under
the heading of OMC. The OMC contains suasive governance instruments and
soft law. In social policy there are OMCs in the issue areas of social inclusion,
pensions, health care and employment. Several scholars (Goetschy 2003b,
Mosher and Trubek 2003, Trubek and Mosher 2003) argue that the OMC in
social policy is a way to extend European social policy to issue areas where the
EU lacks competence, and to adopt European measures which in the legislative
process would be blocked because a unanimous vote is required. Due to the
non-binding nature and the little coercion of suasive instruments and soft law,
member states agree with European measures and at the same time defend their
national autonomy.
Regulatory Competition
Analysing an issue area of European environmental policy, the clean air policy,
Héritier and collaborators (Héritier 1996, Héritier, Knill and Mingers 1996, Knill
and Héritier 1996) also find evidence that member states defend their national
interests in European policy-making. They argue that member states engage in
a regulatory competition during the formulation of European policy outputs in
order to avoid adaptation costs when these outputs have to be implemented in
the member states. In this sense, regulatory competition does not refer to the
competition between member states for advantages of location in the common
market, but to the struggle for transferring national traditions of regulation into
European policy outputs. As far as clean air policy is concerned, Héritier and
collaborators point to the opposition between the German and the British regulatory
approach. On the one hand, the German government pursued emission control at
source by command and control instruments on the basis of the best available
technology. On the other hand, the British government favoured regulation of
ambient air quality by instruments that include networks and give more leeway
to the addressees of political steering. By succeeding in transferring elements of
their respective regulatory approach to the European level, member states avoid
political costs because national laws, administrative procedures and regulatory
approaches need less adaptation in order to comply with European provisions.
Furthermore, member states have an interest in avoiding economic adaptation
costs that emerge when national enterprises face competitive disadvantages as a
consequence of European regulation. In the regulatory competition, the national
interest of member states consists of protecting their political system and the
domestic industry from adaptation costs.
The argument of pursuing national interests in a regulatory competition
is confirmed and refined by studies of European environmental policy by
Liefferink and Andersen (1998) and Börzel (2002). Liefferink and Andersen
identify different strategies by which member states push environmental
policy outputs at the European level in accordance with their national interest.
They argue that the different strategies hamper alliances of member states that
advocate high levels of environmental protection. Börzel argues that the transfer
of regulatory approaches and environmental standards does not only depend on
national interests but also on the administrative and political capacity to push
policy proposals at the European level. Not all member states actively engage
in European policy formulation. There are also member states that abstain from
regulatory competition because the losses and benefits they expect from the
respective policy output are balanced. Finally, there are member states that face
adaptation costs but do not have the capacity to guide the direction of policy
formulation. These member states try to block the decision or at least to obtain
compensation by package deals or side-payments.
National Interest Hypothesis
The argumentation put forward in this section can be summarised into the national
interest hypothesis. According to the national interest hypotheses, a policy
instrument of a certain type is chosen when this policy instrument contributes to
meeting national interests. National interests are comprised of enhancing benefits
of national producers and consumers and preventing disadvantages for domestic
industry and citizens. Furthermore, member states have an interest in preserving
their administrative routines, regulatory approaches and national peculiarities of
policy-making. Member states will choose those types of policy instruments that
are rooted in their national regulatory approach. If the policy output adopted at
the European level serves national interests, national governments will advocate
European legislation and governance instruments, that they regard as effective.
Vice versa, if the subject matter of a European policy output contradicts national
interests, member states will support less coercive legal instruments, i.e. soft law,
and governance instruments, that they consider to be ineffective.
Institutions affect the opportunity for member states to follow their interests.
If unanimity is required in the Council, each national government has the
opportunity to block a decision in order to defend its national autonomy. In
contrast, qualified majority voting facilitates the adoption of European policy
outputs because only a number of member states may prevent a decision. Thus,
on the one hand, qualified majority voting creates the opportunity that single
member states are outvoted. On the other hand, it also facilitates the transfer of
regulatory approaches from the national to the European level. Conflict emerges
as a result or diverging national interests. Hence, a cleavage between national
interests structures policy-making in the policy area. This cleavage divides
member states with competing interests as well as national governments and
supranational organisations of the EU.
1.2.2 Conflict Between Ideological Beliefs
The strand of the existing research described in this section points to the conflict
between ideological beliefs. It bears a resemblance to the previously described
argumentation, which focuses on national interests. Both strands suppose that
political actors seek to adopt European policy outputs that are in their favour. Since
actors have competing preferences, conflict emerges, which shapes policy-making
in the EU. Actors do not foster common values in the first place. If they claim
problem-solving, they look at policy problems through the lens of their respective
interest or belief. However, the two arguments differ in respect of the type of conflict
that structures policy-making. Whereas the previous argumentation focuses on
national interests, the argumentation in this section highlights ideological beliefs
that constitute the cleavage in the policy area. Ideological beliefs comprise ideas of
a just distribution of values in society, standards of appropriate state intervention,
and definitions of policy problems and adequate approaches to their solution. They
correspond to belief systems, policy paradigms and policy positions of political
parties, which are widely discussed in the context of national policy-making (Rose
1980, Hall 1989, Sabatier and Jenkins-Smith 1993, Schmidt 2002).
Ideological beliefs differ from national interests in certain respects. While
national interests refer to values within the nation state as a whole and address the
distribution of values between nation states, ideological beliefs are concerned with
the distribution of values between societal groups. Policy goals and regulatory
approaches advocated by member states following their national interest are
different from those political parties, trade unions, employers’ associations and
non-governmental organisations (NGOs) pursue on the basis of ideological beliefs
in order to further the benefit of their electors, members and supporters. This
difference does not deny that ideological beliefs may become national interests,
but as argued in this section, national governments do not follow national interests
in policy-making in the EU in the first place, but support and oppose European
policy outputs on the basis of their ideological beliefs.
As national governments, also private actors pursue ideological beliefs and
prefer a certain type of policy instruments. Environmental NGOs and trade unions
prefer command and control legislation in order to establish environmental and
social standards, respectively, whereas employers’ associations favour an absence
of any regulation that intervenes in the market. Only if public authorities threaten
to adopt and implement legislation, industry is prompted to agree on environmental
and social provisions that are, however, based on voluntary compliance. Suasive
instruments and soft law represented by voluntary agreements by industry in
European environmental policy and collective agreements between trade unions
and employers’ associations in European social policy emerge in the shadow of
hierarchy (Héritier and Eckert 2008, Smismans 2008). In contrast to hierarchical
political steering by command and control legislation, suasive instruments and
soft law involve horizontal relations between actors. Nevertheless, also suasive
instruments and soft law constitute a power relation between the agents and the
addressees of political steering. In this case, power is constituted by discourse,
communicative argumentation and provision of symbols. Regardless of the
applied policy instrument, political steering always involves power because the
intentional influence of actors is part of political steering. Power represents a
social relationship that structures courses of action. Political steering uses power
in order to restrict and expand the opportunities of organisations and people, and
guide their activities in a desired direction (Göhler 2007).
Distribution of Ideas and Power
Schäfer (2004, 2005, 2006b) analyses why nation states in international

organisations and the EU adopt suasive policy instruments and soft law. He
compares negotiations and decision-making in the International Monetary Fund

(IMF), the Organisation for Economic Cooperation and Development (OECD)
and the EU, and shows that multilateral surveillance in the IMF and the OECD
corresponds to the OMC in the EU. He argues that the adoption of soft law
constitutes a way of making decisions despite diverging positions, because soft
law does not bind national governments but provides them with the opportunity to
use the agreement in order to shape the domestic political agenda. If nation states
do not reach a substantive agreement, the adoption of soft law prevents a failure
of the negotiation. In contrast, more coercive governance instruments in the form
of hard law are only adopted when two conditions are met. First, political actors
have to share a common ideological belief about which policy problems have to be
tackled by regulation, and which policy instruments are suitable for reaching the
desired policy goal. Second, the political actors who share a common ideological
belief have to have the resources and the dominant position within the actor
constellation in order to carry out their ideological beliefs in the process of policy
formulation. Hence, it depends on the distribution of ideas and power among the
actors involved in policy formulation whether coercive governance instruments
and hard law or less coercive governance instruments and soft law are adopted.
The conditions to adopt coercive policy instruments, which are stringent and
binding, were met, when member states decided on the European Monetary Union
(EMU) at Maastricht in 1991. The experts who negotiated the EMU framework
shared a monetarist belief and abandoned Keynesian thinking. They agreed on
centralising monetary policy at the European level. This expert consensus was
shared by centre-right governments in the member states. At that time, ten out of
the twelve member states were governed by Christian democratic, conservative
and liberal parties. These parties used their powerful position in order to achieve
their policy goal of a European monetary policy by enshrining a price stability in
European legislation that is binding for all governments of the member states. In
contrast to monetary policy, centre-right governments resisted transposing powers
to the EU in the area of social policy. Fostering employment by interventions
into the market was not on the agenda of centre-right parties. In 1997 the power
structure had changed in favour of left-wing parties when the British labour party
and the French socialists came into power. Social democrats and socialists were
capable of putting forward employment policy as a regulative of monetary policy.
They introduced the employment title into the EC Treaty and established the
European Employment Strategy (EES). However, the left-wing governments did
not use their power to adopt European employment legislation at the Amsterdam
summit nor at the Lisbon summit, but only adopted soft law. Three reasons account
for the lack of hard law in European employment policy. Among left-wing parties
at the time, new labour was predominant that does not favour public interventions
but accepts the market. Moreover, socialist and social democratic governments
were afraid of losing credit to the EU for combating unemployment. Finally, left-
wing governments were locked in the inherited framework of European monetary
policy (Schäfer 2004: 5–13, 2005: 181–94).
Manow, Schäfer and Zorn (2004, 2006) support the argument that party
political orientations affect decision-making in the EU. They show the party
composition of member state governments from 1957 to 2003 and describe the
Treaty negotiations in respect of social policy. The argument outlined above for
the summits of Maastricht, Amsterdam and Lisbon also applies to earlier Treaty
negotiations. From the late 1950s to the 1970s most member states were governed
by Christian democrats. In the 1980s and early 1990s additionally conservative
governments guaranteed the majority of centre-right governments. When the
Treaties of Rome were negotiated, ideological conflict emerged between German
Christian democrats and French socialists about the degree of harmonisation in
social policy. The Christian democrats carried their ordoliberal ideas through
by establishing market integration and preventing further measures that do not
contribute to the functioning of the common market. A majority in favour of
market intervention and harmonising social policy was also absent when the Single
European Act was negotiated, and at the end of the 1980s the British conservatives
prevented the adoption of a binding social charter.
Ideological Belief Hypothesis
The ideological belief hypothesis supposes that the main conflict in the policy area
results from competing ideological beliefs. Ideological beliefs are ideas on, and
norms and standards of desirable policy goals, the definition of policy problems, the
appropriate policy instruments to achieve policy goals and solve policy problems,
and the just distribution of values in society. Member state governments pursue
their respective party political position in European policy-making. National
interests are secondary because they are either subsumed within or mediated by
ideological beliefs. In general, the cleavage constituted by ideological beliefs
divides right-wing actors on the on hand and left-wing actors on the other. Besides
political parties, this division also applies to other political actors in European
policy-making, like trade unions, employers’ associations and NGOs. In European
environmental policy, the ideological cleavage runs between economic benefit and
environmental protection. In European social policy it divides economic benefit
and social protection.
According to the ideological belief hypothesis, political actors choose the policy
instruments that are part of their ideological belief. The ideological preference for
a certain policy instrument also includes the consideration of its effectiveness and
the appropriate degree of coercion it exerts on the addressees of political steering.
Although having become less resistant to market mechanisms, social democrats
and socialists prefer command and control governance instruments because they
consider a high degree of coercion on capital owners to be necessary in order to
effectively achieve a just distribution of social values. In contrast, both liberals and
Christian democrats and conservatives are critical of hierarchical interventions in
the market, and prefer economic and suasive governance instruments. As far as
legal instruments are concerned, national governments transpose their ideological
belief, including both policy goals and policy instruments, into European
legislation, if they have the power to do so. An alliance of political actors has a
powerful position when it is able to adopt policy outputs against the will of other
actors. Besides the number of allies, the ability to adopt policy outputs depends on
institutions. If the Treaties provide for qualified majority voting, the adoption of
hard law is facilitated. Vice versa, unanimity voting impedes the adoption of hard
law. If national governments do not have the power to transpose their ideological
belief into European legislation, soft law may constitute a way out when non-
binding measures are preferred to no European measure at all.
1.2.3 Low Conflict due to Problem-solving
While the national interest hypothesis and the ideological belief hypothesis are
similar in respect of the level of conflict, the problem-solving hypothesis introduced
at the end of this section differs from the two hypotheses in the conception of
the policy process. While the two previous hypotheses conceptualise the policy
process as a struggle for power, influence and distribution of values, the problem-
solving hypothesis supposes a low level of conflict between political actors due
to problem-solving. National interests and ideological beliefs fade in importance.
Political actors seek to produce common values in society by solving policy
problems. The definition of policy problems is not contested. Problems like the
aging of society, unemployment, the increase in greenhouse gas emissions and
shipwrecks of supertankers are not questioned. Rather, the question of which
policy instruments are best suited to effectively solve the policy problems is
subject to political debate.
Combination of Policy Instruments
Scholars reflect on the question of which policy instruments are effective in solving
the policy problems of European environmental policy and European social policy.
They point to the need to bind addressees of political steering to comply with stipulated
standards, but also to give them leeway in order to adapt to particular situations and
changing circumstances. The two conditions can be met, if a combination of policy
instruments is applied. This finding applies to both governance instruments and
legal instruments. Jänicke and Jörgens (2004) argue that persistent environmental
problems can be solved, if hierarchical governance instruments are combined with
governance instruments based on markets and networks. Persistent environmental
problems are problems that have not been relieved by the policy instruments applied,
like the increase in greenhouse gas emissions or the loss of biological diversity. Both
economic and suasive instruments allow the addressees of political steering flexibility
in achieving environmental protection. Nevertheless, these instruments have to be
complemented by command and control instruments in order to make the addressees
comply with the provisions. As far as legal instruments are concerned, Hey, Volkery
and Zerle (2005) argue along the same lines. European measures by soft law take
the diversity of member states into account both in respect of national regulatory
approaches and environmental conditions. However, in order to guarantee a certain
standard of environmental protection, the EU cannot solely rely on declarations of
intent and cooperation in the form of soft law. Additional hard law provisions are
necessary in order to effectively protect the environment throughout the EU.
In European social policy, as argued by Schmid and Roth (2001), the EU may
affect labour policy and employment policy in the member states by applying
little coercive policy instruments. Economic and suasive instruments as well as
soft law enable effective coordination and control because they are suitable for
the complexity of policy-making in the European multi-level polity. The use of
these instruments may be conceived as a result of the relative ineffectiveness of
command and control instruments and hard law. Scharpf (2002) also argues that
a further harmonisation by command and control instruments and hard law is not
appropriate to European social policy. Little coercive instruments, namely the
OMC, enable a closer cooperation at the European level but recognise the diversity
of national systems of social protection and the political salience of social policy
in the member states. However, in order to be effective, European social policy has
to have the same legal status as European economic policy. European legislation
is necessary in order to establish legal equality of social protection and economic
integration. Since framework directives contain binding but general provisions,
member states are obliged to comply with European provisions, but their
national welfare regimes are not overly constrained by these provisions. Hence, a
combination of framework directives and the OMC constitutes an effective policy
instrument for European social policy.
Policy Diffusion, Policy Learning and Policy Transfer
Whether policy instruments are effective is not only a matter of theoretical

reflection but also of experience with their use in other countries, at other levels of
governance, in other policy areas or at earlier times. Policy diffusion, policy learning
and policy transfer are three overlapping concepts that account for the choice of
policy instruments resulting from such experiences. They are often, but neither
necessarily nor exclusively, related to a problem-solving perspective and to suasive
instruments and soft law. Tews, Busch and Jörgens (2003, Busch, Jörgens and Tews
2004) argue that the adoption of economic and suasive governance instruments
both at the European and the national level is the result of policy diffusion.
Policy diffusion describes a process by which innovations of ideas, institutions
and regulatory approaches, including policy instruments, in one jurisdiction are
voluntarily adopted in other jurisdictions by means of information exchange as
a result of multilateral interdependence. The effectiveness of policy instruments
in solving policy problems is one reason for their diffusion. Furthermore, policy
diffusion is furthered when certain ideas, institutions and regulatory approaches
are promoted by external organisations, especially international organisations, and
are supported by actors in the adopting jurisdiction. Finally, policy diffusion is
facilitated when policy problems are tackled that are characterised by a low level
of politicisation.
While policy diffusion refers to the level of a political system, policy learning
describes changes in thought and intention of political actors. Policy learning results
from experience and new information and is concerned with policy goals and how
they can be achieved (Bennett and Howlett 1992). In European environmental
policy, policy learning contributed to the transfer of economic and suasive
instruments. Information about the effectiveness of policy instruments including
experiences with the implementation of command and control instruments made
political actors consider economic and suasive instruments as an alternative form
of coordination and control (Jordan et al. 2003). In European social policy and
other policy areas in which the OMC is applied, suasive instruments and soft law
are adopted in order to facilitate policy learning. Policy learning is supposed to be
a way of transferring effective solutions to policy problems from one member state
to another member state that is facing similar problems (de la Porte, Pochet and
Room 2001, Hodson and Maher 2001).
Both policy diffusion and policy learning can be subsumed within the broader
concept of policy transfer. Policy transfer covers various processes that all have in
common that knowledge about policies, including policy instruments, in a political
system, a policy area or at a certain time is used to develop policies in another
political system, policy area or at another time. Processes of policy transfer are
different in strength, ranging from a complete copying to an abortive transfer. In
between, political actors may emulate general ideas but apply them differently,
combine policies from different provenances, or get inspired but develop their
own policies. Policy transfer also includes both obligatory and voluntary policy
adoption (Dolowitz and Marsh 1996, 2000). In the EU, policy transfer occurs from
the national to the European level and vice versa as well as between member
states. The choice of policy instruments in European policy areas is subject to
policy transfer from the member states to the EU in negotiations at the European
level. If the negotiations are characterised by problem-solving, a strong form
of policy transfer will take place, i.e. emulation or combination. In this case,
institutions have a minor influence, although policy transfer is stronger, when
qualified majority voting is applied, and weaker, when unanimity is required. In
contrast, when negotiations are characterised by a high level of conflict, unanimity
results in a weak policy transfer of combination or even prevents it, but qualified
majority voting facilitates policy transfer (Bulmer and Padgett 2005). Hence,
policy transfer as well as policy learning account for both policy processes
characterised by problem-solving and policy processes dominated by national
interests and ideological belief described in the two previous sections. Also, the
regulatory competition represents an example of policy transfer that results in a
combination of national regulatory approaches at the European level, described by
Héritier (1996) as patchwork.
Problem-solving Hypothesis
The problem-solving hypothesis does not differ from the two previous hypotheses
in respect of policy learning or policy transfer. The fundamental difference lies in
the level of conflict. In both the national interest hypothesis and the ideological
belief hypothesis cleavages produce conflict within the policy area, whereas the
level of conflict is low when negotiations are characterised by problem-solving,
that is, political actors engaged in negotiations seek to effectively solve policy
problems in order to create values of common societal interest. According to
the problem-solving hypothesis, cleavages are absent in the policy area, policy
problems are not politicised and institutions are of minor influence on the adoption
of policy instruments. Political actors agree on policy instruments that are best
suited to effectively solve policy problems. There is no political opposition that
uses the requirement of unanimity in order to prevent a decision. Neither the
definition of policy problems nor the perception of the effectiveness of policy
instruments is politically contested. Since a combination of coercive and voluntary
policy instruments is supposed to be most effective in achieving policy goals in
European environmental policy and European social policy, such a combination of
policy instruments will be adopted in the two policy areas.
1.3 Structure of the Explanation
The three hypotheses discussed in the previous chapter focus on different explanatory
factors. By using an overarching theoretical framework, these explanatory factors
may be put together in order to both compare the theoretical approaches focussing on
different explanatory factors and arrive at a complete explanation of policy instruments
(Scharpf 1997: 24–31). In order to answer the research question about the choice of
policy instruments, this study incorporates the three hypotheses derived from the
existing research into a theoretical framework. Hence, the structure of explanation is
constituted by a theoretical framework that organises and compares the explanatory
factors identified by the existing research. There are two theoretical frameworks that
are suitable for the explanation of policy instruments: the framework of the actor-
centred institutionalism and the advocacy coalition framework. Both frameworks
are broad enough to incorporate the explanatory factors of the hypotheses discussed
in the previous section. Furthermore, they analytically reduce the complexity of
the policy-making process. Finally, by considering both structures and actors, they
contribute to reconciling approaches of systems theory and actor-centred approaches
of political steering and thereby enhance the explanatory strength of the theoretical
approach (Schimank 1992, cf. section 1). Regardless of the common value, the
actor-centred institutionalism and the advocacy coalition framework emphasise
different aspects of policy-making. Nevertheless, they are not mutually exclusive.
The structure of explanation used in this study is shaped by both the relation between
the two theoretical frameworks and the relation between structure and agency. Both
relations are discussed in this section.
Actor-Centred Institutionalism and Advocacy Coalition Framework
Derived from the analysis of political steering and societal self-organisation,

actor-centred institutionalism constitutes a general framework of policy analysis
which was developed by Renate Mayntz and Fritz W. Scharpf (1995a, Scharpf
1997). Essentially, Mayntz and Scharpf identify two main factors that explain
social phenomena: institutions and actors. Institutions are defined in a restricted
sense, and are regarded as ‘systems of rules that structure the course of actions that
a set of actors may choose’ (Scharpf 1997: 38). The rule systems encompass both
formal legal rules and social norms of appropriate behaviour. In contrast to more
encompassing definitions of institutions, the restricted definition includes neither
the reinforced and unquestioned habits of everyday life nor the actors who are
closely related to the rules. The restricted definition allows institutions and actors
to be treated as separate factors of explanation. The people and organisations
that make decisions during the policy process are separated from the rules that
constitute these actors, shape their characteristics and affect their behaviour.
As far as institutions are concerned, two types of rule systems are regarded as
mainly relevant to the explanation of policy choices: decision rules and boundary
rules. Decision rules state how a binding decision is reached if participants disagree
about a policy issue. Generally, there are three ways of making decisions. First, an
actor who possesses enough power can impose his decision unilaterally on all other
participants by hierarchy. Second, decisions can depend on a majority of actors. There
are different forms of majorities such as relative majority, absolute majority and
different kinds of qualified majority. Finally, unanimity requires the agreement of all
actors who are involved in the decision. Which actors are involved in the decision-
making process is specified by boundary rules. Boundary rules both delineate the
reference system in which the political process takes place and constitute the actors
who take part in the political process (Scharpf 1989a: 152–3).
Although individuals and aggregated actors like coalitions, clubs and
movements are able to influence the adoption of a certain policy output,
organisations are regarded as the main actors in the policy process. Organisations
are synonymous with corporate actors as described by Coleman (1974). Following
Coleman, Mayntz and Scharpf define a corporate actor as a plurality of people that
is formally organised, externally capable of acting and internally structured by
decision rules. Both resources and preferences are decoupled from the individual
members and ascribed to the centralised level of the corporate actor (Mayntz and
Scharpf 1995a: 49–51).
Despite the focus on corporate actors, characteristics and behaviour of actors
are conceptualised complexly in imitation of individual people. Among the various
qualities of actors, their perceptions and preferences are regarded as essential to
the explanation of policies. Perceptions refer to actors’ cognition. In a concrete
situation actors perceive which societal issue constitutes a policy problem, which
options are available to solve the policy problem or achieve policy goals, and which
outcome is related to the respective option. Preferences refer to the motivation of
actors. Actors are motivated by self-interest, normative orientation, identity and

interaction orientation. However, the main focus is placed on interaction orientation.
In contrast to the first three sources of motivation, interaction orientation is not
restricted to unilateral actions of a single actor but describes the relation between
actors and is therefore mainly relevant to explain the policy process. Again, there
are various modes of interaction orientation. The interaction orientation indicates
whose benefit actors pursue. Actors with an individualistic interaction orientation
seek to maximise their own benefit regardless whether other actors benefit or
not. Actors who show solidarity try to maximise both their own benefit and the
benefit of the other actors. Competitive actors pursue their own benefit relative
to the benefit of other actors. In competition, an actor’s gain is another actor’s
loss and vice versa. Furthermore, there are the interaction orientations altruism
and hostility. Even rare forms like masochism, self-sacrifice, mutual destruction
and indolence could be included if they contributed to an explanation. However,
individualism, solidarity and competition are expected to be the main motivations
of actors (Mayntz and Scharpf 1995a: 52–9, Scharpf 1997: 60–6, 84–9).
Actors seek to solve policy problems and struggle for political power in concrete
situations by interacting with other actors within a subsystem of society. This
situation is described by the actor constellation and the mode of interaction. The
actor constellation describes the actors involved in the process of policy-making
and the relation between these actors. Furthermore, it describes policy alternatives
available to political actors, the outcomes associated with these alternatives and the
actors’ preferences in respect of the available alternatives. The mode of interaction
describes the way of societal coordination and indicates the structure of a societal
subsystem. Modes of interaction are unilateral or mutual adjustment, negotiated
agreement, majority vote and hierarchical direction. As policy instruments,
modes of interaction can also be regarded as specific governance structures. In
this case, unilateral or mutual adjustment represents coordination based on market
mechanisms, and hierarchical direction represents, as already indicated by its name,
hierarchy as mode of governance. Negotiation and majority vote are situated in
between these two poles. While the actor constellation shows the level of conflict
between political actors, the mode of interaction describes the way conflict is to be
resolved (Mayntz and Scharpf 1995a: 60–5, Scharpf 1997: 44–9). To sum up, in the
framework of actor-centred institutionalism, policy outputs and policy outcomes
are conceived as the result of interactions of actors that are shaped by institutions.
Institutions enable and restrict actions by affecting both the actors themselves and
the situation in which people and organisations act, i.e. the actor constellation and
the mode of interaction (Mayntz and Scharpf 1995a: 45, Scharpf 1997: 44).
The advocacy coalition framework was developed by Paul A. Sabatier and
collaborators. The advocacy coalition framework emerged from a critique of
implementation research and the stages heuristic of the policy process. It represents
an encompassing theoretical framework to explain the policy process (Sabatier
1986, Jenkins-Smith and Sabatier 1994, Sabatier and Jenkins-Smith 1999). Central
to the advocacy coalition framework is the notion of a belief system. Belief systems
‘are sets of value priorities and causal assumptions about how to realize them’
(Jenkins-Smith and Sabatier 1994: 178). Both the motivation of political actors
and public policies are conceptualised as belief systems. This conception directly
links the political actors to the policy output. In the policy process, political actors
aim to transpose their belief system into public policy outputs. A belief system
has a hierarchical tripartite structure. The highest level is represented by the deep
core. The deep core encompasses fundamental ontological and normative beliefs
that refer to policy-making in general. It is akin to a religious conviction. At the
medium level, the policy core covers policy positions and strategies in a policy
area or a policy subsystem. It includes value priorities, the perception of policy
problems and their causes, and strategies to realise values of the deep core within
the subsystem. The preference for a certain type of policy instruments is also
part of the policy core. Secondary aspects are situated at the lowest level of the
belief system. They refer only to a part of the policy subsystem and are of a rather
technical nature, like administrative rules and budgetary allocations (Sabatier
1988: 142–5, 1998: 103–4).
The advocacy coalition framework focuses on policy-making in a policy
subsystem. A policy subsystem is composed of those actors who are concerned
with policy problems of a certain subject matter. The advocacy coalition framework
argues that division and cohesion in political conflict result from diverging and
congruent policy cores of the belief system, respectively. Those actors of a policy
subsystem that share the policy core and engage in coordinated activities over
time constitute a so-called advocacy coalition. In order to constitute an advocacy
coalition, it is sufficient that actors, who share their policy core, mutually monitor
their behaviour and alter their actions in a way that they complement each other
in order to achieve the common goal. A stronger coordination that includes
communication, development and implementation of a common action plan is not
required (Zafonte and Sabatier 1998: 477–81). Sabatier (1988: 139–41) assumes
that there are usually two to four advocacy coalitions in a policy subsystem that
oppose each other in policy-making. Only in quiescent subsystems there is only a
single coalition. Furthermore, there are actors that do not belong to an advocacy
coalition. Those so-called policy brokers reduce the level of conflict by promoting
reasonable solutions to policy problems. Political conflict within the policy
subsystem or the policy area is shaped by opposing advocacy coalitions.
An advocacy coalition’s belief system determines the direction of its activities.
However, whether an advocacy coalition is capable of transposing its belief
system into public policies depends on the resources and constraints provided by
external structures. External structures may put an advocacy coalition in a position
where it is either more powerful or less powerful than other advocacy coalitions.
Sabatier and Jenkins-Smith (Sabatier and Jenkins-Smith 1999: 148–9) list a
number of external factors that affect policy-making within the subsystem. They
identify relative stable parameters and external events. Relative stable parameters
are basic attributes of the policy area, the basic distribution of natural resources,
fundamental cultural values and the basic legal structure. External events are
represented by changes in socio-economic conditions, changes in public opinion,

changes in systemic governing coalitions, and policy decisions and impacts from
other subsystems. In a revised version of the framework, they also add the degree
of consensus that is needed for a major policy chance to the external structures.
The degree of consensus is synonymous with decision rules as defined by the
actor-centred institutionalism (cf. above).
The distinction between external parameters that are relatively stable over time
and external events that are subject to change and fluctuations results from the
purpose of the advocacy coalition framework. Since the framework focuses on the
explanation of policy change over a decade or more, those factors are highlighted
that change over time. Stable factors may not explain policy change. In addition
to policy change, the advocacy coalition framework points to policy-oriented
learning. Policy-oriented learning is defined as a relatively enduring alteration of
thought or behavioural intention that results from new information and experience.
Policy-oriented learning is conceived as instrumental, that is, political actors learn
in order to better achieve their policy goals (Sabatier 1988: 131–7, 149–51).
Sabatier and collaborators make an effort in order to elaborate on political actors,
their beliefs, their interaction and the way they learn. Nevertheless, the main factor
that explains the adoption of a policy output is a structural one. The advocacy
coalition framework takes the notion of perturbation from systems theory (Druwe
and Görlitz 1992: 155). Intentional actions of political actors are secondary to the
explanation of the policy process:
The basic argument of the ACF [advocacy coalition framework] is that while
policy-oriented learning is an important aspect of policy change, and can often
alter secondary aspects of a coalition’s belief system, changes in the policy
core aspects of a governmental program are usually the results of perturbations
in non-cognitive factors external to the subsystem, such as macro-economic
conditions or the rise of a new systemic governing coalition. (Jenkins-Smith and
Sabatier 1994: 183)
Structure and Agency
Both the actor-centred institutionalism and the advocacy coalition framework take
political actors into consideration, but rely on structures, namely institutions and
perturbations in external factors, respectively, when they explain the adoption
of policy outputs. It is argued at several points and occasions that structures do
not act but that people and organisations are responsible for agency. Societal
structures, like technologies, resource distribution between societal groups, or
state constitutions do not emerge and evolve directly from previous structures.
People and organisations advocate their belief and interest, struggle for power,
discuss policy alternatives, take decisions and implement policy objectives. Thus,
social phenomena result from the interaction between people and organisations,
but the interaction is constrained by structural conditions and historical
contingencies. Regardless of the commitment to integrate individual actors into

the analysis of political processes, the principle task of political science, and
social sciences in general, is to explain social phenomena. Cognitive processes
and origins of motivation are not the object of explanation. Nevertheless, in
order to explain phenomena at the macro-level of societal structures actors at
the micro-level of individual people have to be taken into account in order to
acknowledge the fact that only actors are capable of acting but not structures
(Marx 1979 [1852], Coleman 1990: 1–23, Scharpf 1997: 19–49, Bunge 1999:
45–67, Esser 1999: 83–118, Weber 2006 [1904]).
Policy analysis has to operate with simplified assumptions about individual actors
because the inclusion of individual actors into the explanation of policy outputs
creates both conceptual and methodical problems. Conceptually, an explanation
is incomplete if it is restricted to the structural level, but too complex if it overly
focuses on actors. Methodically, the real motivation and perception of actors cannot
be reconstructed. Both types of problems result in considering individual actors
only to a limited extent. The methodical problem is discussed below in section 2.3.
The conceptual problem is addressed by the ‘method of decreasing abstraction’,
proposed by Lindenberg (1991: 46–57). In order to enable theory-guided analysis
on empirical foundation, he starts by identifying structural explanatory factors
and then successively taking individual characteristics of actors into account. The
successive expansion of explanatory factors has to be stopped when the explanation
is sufficiently complex yet as parsimonious as possible. Reasons for individuals’
disposition, mood or interaction orientation need not be identified. In any case, the
explanation of social phenomena is based on an abstraction that simplify individual
behaviour. Mayntz and Scharpf (1995a: 66) agree with the method of decreasing
abstraction and succinctly summarise it in an institutionalist manner by stating that
social phenomena need not be explained from an actor-centred approach if they can
be explained by institutional arrangements. In a similar vein, Sabatier and Jenkins-
Smith (Sabatier 1988: 134, Jenkins-Smith and Sabatier 1994: 183) consider cognitive
characteristics of political actors, but regard perturbations in external structures as
main explanatory factors of policy change.
Mayntz and Scharpf reduce the complexity of the explanatory framework in
three ways. First, they do not consider structures in general as explanatory factors
but primarily look at institutions, because institutions have the special feature that
they constitute mutual reliability between actors and thus enable societal actions
that go beyond personal relations. Institutions are structures of a particular nature.
Whereas institutions are considered systematically, as described above, non-
institutional structures, like the distribution of natural resources or socio-economic
conditions, are not specified and only taken into account if policy outputs cannot
be explained by institutions alone (Mayntz and Scharpf 1995a: 47). Second, the
characteristics of actors are considered parsimoniously. Actors’ capabilities are
not systematically taken into account because they are highly contingent on the
one hand and superseded by institutional assignments on the other. Moreover,
actors’ motivations are conceptualised in a modular way. It is assumed that actors
are primarily motivated by their self-interest. Their identity and norm orientation
are only included in the explanation, if the assumption of self-interest does not
apply to the observation (Scharpf 1997: 51, 63–4). Third, corporate actors, i.e.
organisations, and not individual people are regarded as the main actors in the
policy-making process. Individual members who represent an organisation
are equated with this organisation. The capability of acting can be ascribed to
a corporate actor if common intentions are formulated within the organisation,
and members of the organisation are controlled and obliged to share these
intentions. These two prerequisites are demanding. Nevertheless, processes within
organisations and individual actors are only taken into account, when institutions
and the specific situation do not explain the observed behaviour of an organisation
(Mayntz and Scharpf 1995a: 50).
Compared with actor-centred institutionalism, the advocacy coalition framework
reduces the complexity of structures that account for the adoption of policy outputs
to a lesser extent. It lists nine types of structures that affect policy-making in the
subsystem (Sabatier and Jenkins-Smith 1999: 149). Structures are not restricted to
institutions in the first place, as in actor-centred institutionalism. When the focus is
put on policy change, the complexity of the explanation is reduced by considering
only those external events that change over time. As far as actors’ motivations are
concerned, the advocacy coalition framework proceeds similarly to actor-centred
institutionalism, but in another direction. The advocacy coalition framework focuses
on normative beliefs of actors. In order to explain policy-making in subsystems only
a part of the belief system, namely the policy core, is considered as salient. The
deep core and secondary aspects of the belief system take second place. Finally, also
self-interest of actors is taken into account, if it results in enhancing the explanatory
strength (Sabatier and Jenkins-Smith 1999: 130–2). As actor-centred institutionalism,
also the advocacy coalition framework abstracts from individuals by aggregating
individual actors into larger entities. The advocacy coalition framework even reduces
the complexity of the actor constellation further than actor-centred institutionalism
by also aggregating organisations into larger entities. Few advocacy coalitions that
shape the actor constellation encompass the multitude of people and organisations
involved in policy-making in a subsystem. The capability of acting is ascribed to
these advocacy coalitions (Sabatier 1988: 139–40).
As argued above, it is often neither possible nor necessary to include the
micro level of individual actors in the explanation of societal macro phenomena.
Nevertheless, in order to causally reconstruct social phenomena, a social
mechanism has to be identified (Mayntz 2004). A social mechanism describes a
process that links causes and effects. It states step-by-step how initial conditions
result in a certain output or outcome. A social mechanism identifies a causally
linked sequence of events. In order to explain a phenomenon at a certain level,
a social mechanism has to consider characteristics of lower levels as well.
However, for the explanation of societal macro-phenomena, characteristics of
individual actors need not be taken into account for the reasons mentioned above.
Furthermore, a focus on individual actors neglects the importance of structural
features. ‘Structures exert their effect through the actions of individuals, but
assuming a general action orientation of individuals [for instance rational
choice], it is the nature of the structural arrangements within which they act
that determines the effect’ (Mayntz 2004: 252). Assumed actor orientations
and inferred policy preferences of organisations shape the actor constellation
in policy areas. The actor constellation in social systems constitutes a lower
level to explain social phenomena at the macro-level by identifying a social
mechanism (Mayntz 2004: 251–2).
A social mechanisms is concealed and cannot be observed. It can only be
conjectured by using theory. Hypotheses derived from theory and revised on
the basis of empirical data may describe a social mechanism (Bunge 2004). In
order to conjecture a social mechanism, actor-centred institutionalism is used
as a theoretical framework that structures and combines explanatory factors of
different theoretical provenance. In this study, elements of the advocacy coalition
framework are added to the actor-centred institutionalism. In particular, the notion
that conflict within the policy area is shaped by normative beliefs complements the
notion of interest conflict. Furthermore, in addition to institutions, the politicisation
of policy problems and external events are considered as structural factors that
affect the choice of policy instruments. The integration of factors identified by
the existing research as relevant to the explanation of policy instruments into a
theoretical framework is the subject of the following section.
1.4 Factors Explaining Policy Instruments
Various factors are mentioned in order to explain the choice of policy instruments.
Early studies focused on characteristics of policy instruments, arguing that policy
instruments are substitutable. As a consequence, there are several policy instruments
at the disposal of public authorities, who chose the one they regarded as most
appropriate. Metaphorically speaking, public actors have a toolbox containing policy
instruments, from which they take the respective tool, i.e. policy instrument, in
order to achieve their policy objective or solve a policy problem. Subsequent studies
argue that this notion is too simplistic. They do not reject the notion that different
policy instruments possess different characteristics but argue that the context in
which policy instruments are chosen have to be taken into account. There are still
several policy instruments at the disposal of political actors, but not all of them can
actually be chosen. Institutional arrangements, political conflict, competing interests
and power relations in an actor constellation may favour the adoption of certain
policy instruments at the expense of other instruments. In the existing literature on
policy instruments several explanatory factors are enumerated and, depending on
the theoretical perspective, different factors are highlighted (Howlett 2005).
By using a theoretical framework, the various variables discussed in the political
science literature can be arranged in a structured manner. Factors explaining the
choice of policy instruments can be summarised in four groups of explanatory
factors: characteristics of policy instruments, the actor constellation, the mode
of interaction and situational structures. Situational structures are represented by

institutions, the politicisation of policy instruments and external events. The general
relation between these factors is shown in Figure 1.1 by specifying the direction
of cause and effect. Figure 1.1 adapts the diagram of actor-centred institutionalism
(Mayntz and Scharpf 1995a: 45, Scharpf 1997: 44) to the explanation of policy
instruments.
Situational structures
Institutions
Politicisation of Policy problems
External events
Actor Constellations Modes of Interaction Policy Instruments

Characteristics of
Policy Instruments
Figure 1.1 Explanation of Policy Instruments
The factors identified are of different scope. The scope ranges between situational
structures and the mode of interaction. On the one hand, situational structures
represent a bundle of factors. Structural conditions that affect the situation of
decision-making in a policy area comprise institutions, the politicisation of a
policy problem and external events. Institutions result in a varying number of veto
points or veto players, policy problems contain a different level of politicisation,
and external events point to policy problems and put pressure on decision-making.
On the other hand, as far as European environmental policy and European social
policy are concerned, the mode of interaction is held constant. In both policy areas
the mode of interaction is negotiation. Characteristics of policy instruments that
influence actors’ preference for a policy instrument are the degree of coercion
inherent in a policy instrument, the effectiveness ascribed to a policy instrument
and the interest or belief of political actors that is associated with a certain type of
policy instrument. The actor constellation describes the structure of the political
conflict within a policy area that is shaped by both interests and beliefs.
Actors choose a certain policy instrument in order to achieve a policy goal.
They have a certain position within the actor constellation, interact with other
actors in a specific way and anticipate the effects that stem from characteristics
of the policy instruments. Situational structures create both opportunities and
constraints political actors face. Institutions allow that actors are outvoted or that
single actors may block a decision. The politicisation of policy problems hinders
decision-making. External events create the opportunity to promote certain policy
goals and policy instruments. The remaining sections of this chapter discuss the
explanatory factors and their effects on the choice of policy instruments in detail.
The discussion also considers general approaches and concepts of policy analysis
and political science that contribute to the explanation of policy instruments.
1.4.1 Characteristics of Policy Instruments
Characteristics of policy instruments affect the actor constellation and the political
process that leads to the choice of policy instruments. The notion that policy
outputs have repercussions upon the political process is widespread in political
science (e.g., Easton 1965: 108–12, Windhoff-Héritier 1987: 64–6, Scharpf 1997:
44, deLeon 1999: 20–3). Lowi links the type of a policy to the level of conflict in
the arena in which political decisions are taken. He puts his theoretical argument in
a nutshell by stating that ‘policies determine politics’ (Lowi 1972: 299, emphasis
omitted). Lowi’s statement is generally acknowledged in political science, when
the relation between policies and politics is not regarded as deterministic but
in the way that policies affect politics. Political actors anticipate the effects of
a certain policy and behave accordingly. Thus, policies are both starting-point
for the political process and subject to decision-making. They refer to problems,
courses of action and policy objectives (Benz 1997). In this study, policies are
analysed by focussing on policy instruments. Several authors have pointed to the
level of coercion inherent in policy instruments. Further studies indicated that the
effectiveness ascribed to a certain policy instrument influences its choice. Finally,
scholars argue that policy instruments are not politically neutral but reflect interests
and beliefs of political actors.
Coercion
Coercion is identified as a main characteristic of policy instruments relevant to

the latter’s choice. Both governance instruments and legal instruments vary in the
degree of coercion they exert on the addressees of political steering. The degree
of coercion is synonymous with the level of obligation ranging from voluntary
instruments on the one hand to compulsory instruments on the other. As far as
governance instruments are concerned, command and control instruments entail
a high degree of coercion. Economic instruments are less coercive. Suasive
instruments exert only a low degree of coercion, if at all. Nevertheless, there
are differences within the types of governance instruments. For example, within
economic instruments, taxation is almost as coercive as command and control
instruments, whereas subsidies are more similar to voluntary instruments
(Windhoff-Héritier 1980: 46–7, Howlett and Ramesh 1995: 81–2). As far as legal
instruments are concerned, the identification of different degrees of coercion is
more clear-cut because the presence and the absence of a legally binding force
defines the difference between hard law and soft law. Hence, hard law exerts a
high degree of coercion on member states due to its obligatory nature, whereas
soft law entails a low degree of coercion because it does not legally bind member
states to implement adopted policy goals (Knill and Lenschow 2004: 219–22,
Senden 2004: 111–12, Citi and Rhodes 2007: 11–15).
Lowi (1972: 299–300) conceives coercion as the main characteristic of
policies. He identifies four different types of policies on the basis of the type of
coercion that can be exerted on the addressees of political steering: distributive
policy, regulatory policy, redistributive policy and constituent policy. The types of
policy result in different impacts on society in the short run. They affect the actor
constellation by shaping the relations between political actors and between societal
groups, restricting and favouring the interests of different actors and allocating
values. Distributive policies are not restricted by limited resources. They allocate
values to certain individual actors. What one actor gets is not perceived as a loss
by another actor. In contrast, both regulatory policies and redistributive policies
result in actors who will be indulged and actors who will be deprived. Losers and
recipients of a policy are directly confronted. While regulatory policies aim to
influence individual actors by establishing general rules, redistributive policies
aim to change the allocation of material values between social classes. Each
policy type provokes a certain level of conflict among the actors in a policy arena.
While distributive policies result in a consensual arena, redistributive policies
create conflicts among political actors. Regulatory policies induce an arena
that is characterised by cleavages between changing coalitions. In the long run
all policies can be regarded either as regulatory or redistributive. They can be
regarded as regulatory because the usage of resources by public actors changes
the action alternatives of other actors at least in respect of these resources, or as
redistributive because usually the amount of taxes people pay differs from the
amount of public services they receive (Lowi 1964). Later, Lowi (1972) added
constituent policy to the classification. However, constituent policy is not relevant
to the research question of this study.
Political scientists frequently refer to Lowi’s classification. It has been criticised,
adapted and applied at various occasions. It is criticised for its ambiguity, which
largely stems from the notion that political actors perceive the costs and benefits they
expect from a certain type of policy differently. It is argued that costs and benefits
have to be conceptualised more elaborately. It is further argued that the same policy
may be perceived differently by different groups of actors and that the perception
of policies may change due to changed conditions under which political decisions
are taken. Moreover, types of policies may be purposefully redefined in order to
either increase or lower the level of conflict in the political process. Finally, it is
argued that newly adopted policies are more susceptible to different perceptions
and redefinitions than already existing policies due to a lack of experience and
information (Wilson 1973: 328–37, Greenberg et al. 1977: 1534–8). Despite this
criticism, Lowi’s classification of policy types is applied in various policy areas and
at various levels of governance (e.g., Beyme 1990: 19, Pollack 1994: 108–13, Pappi,
König and Knoke 1995: 51–2, Tömmel 2000: 167–9).
As indicated by the argumentation above, different policies exert different
degrees of coercion on different addressees of political steering. Woodside (1986:
786–92) argues that policy instruments are not only chosen on the basis of their
inherent coercion. Furthermore, it is important to note to whom policy instruments
are directed and how an issue is regulated. Thus, political actors will apply coercive
policy instruments to societal groups from which they do not expect support. Vice
versa, when groups occupy a powerful position in society and are capable of
threatening to offer resistance or withdraw support, political actors will prefer less
coercive policy instruments. Moreover, the degree of coercion on the addressees
of political steering varies according to the concrete standard of regulation, for
example the hierarchical regulation of emission standards exerts a low degree
of coercion on plants that already comply with these standards, whereas more
polluting plants face a higher degree of coercion.
Effectiveness
Coercive instruments may on the one hand force reluctant addressees of political
steering to comply, but on the other, may provoke resistance of powerful actors
that prevent effective implementation because they are forced to act against their
interests. In contrast, voluntary instruments may on the on hand motivate actors to
pursue the adopted procedures and standards, but on the other, may go unheard if
actors do not have an interest in compliance. Whether a policy instrument succeeds
in reaching a policy goal is synonymous with its effectiveness. A policy instrument
is effective, if it achieves the policy goal that was intended. However, depending
on further factors, the effectiveness is also regarded as a characteristic of policy
instruments. Specific instruments are considered either more or less effective
than others. The effectiveness of policy instruments has been subject to various
theoretical reflections and empirical studies.
Economic theorists, mainly from a neoclassical background, argue that market-
based instruments are more suitable for achieving policy goals than command
and control instruments. From an economic perspective, the necessity of political
steering results from market failure. Market failure describes the circumstances
in which values are not allocated efficiently by the market because product
prices do not reflect the real costs involved in production. Thus, in relation to
the quantity that is socially desirable, the respective good is produced either too
much or too little. Market-based instruments achieve policy goals by getting the
prices right, to borrow a widely used succinct formulation. Taxes increase the
prices of products and thus reduce the quantity produced of these goods. Taxes on
fuels consider the costs of environmental pollution, and taxes on cigarettes include
the costs of the health system into the price and aim to lower its consumption.
In contrast, subsidies reduce the prices of products and thus contribute to an
increased production of these goods. Subsidies for renewable energies foster the
development of environment-friendly technologies (Färber 1993, Kirchgässner

1994: 468–82, European Environment Agency 2006: 5–17).
Based on systems theory, several scholars (Teubner and Willke 1984, Voigt
1986, Willke 1992: 335–72, Münch 1996: 45–72) argued that direct intervention
into societal processes by means of law is not effective. Law is not an effective policy
instrument because modern societies are too complex for purposeful legislation.
Rather, the expected scope of political steering has to be reduced and effective
political steering has to rely on indirect effects of changing external conditions, the
involvement of the actors concerned, and processes of negotiation, cooperation
and persuasion. Twenty years later, this debate about the limited effectiveness
of law as a policy instrument is revisited by the debate about governance at the
European level, including discussions about the usage of expert knowledge, the
incorporation of societal actors, the coordination of various competences and the
settlement of conflicting objectives (Joerges 2007: 7–8).
In its white paper on European governance, the Commission (2001a) argues
that network-based governance instruments have to be added to hierarchical
instruments in order to effectively achieve policy goals. In order to enhance
effectiveness, policy instruments should make flexible provisions by giving more
leeway to implementing authorities, foster benchmarking and exchange of best
practice, and involve the actors concerned. Promoting the consultation between
actors should enable self-regulation by the addressees of political steering. Also,
co-regulation of public authorities and the actors concerned may enhance the
effectiveness of achieving objectives. However, Schout and Jordan (2005) argue
that the white paper and contributions to the debate triggered by the white paper
overrate the effectiveness of network-based governance instruments. Network-
based instruments are less effective, when the group of steering addressees is
heterogeneous and trust among the actors is not highly developed. Moreover,
network-based governance instruments rely on sufficient capacities of public
administrations, especially staff, which engage in coordination, information
exchange and problem-solving negotiations. Schout and Jordan conclude that, in
order to be effective, suasive governance instruments require more hierarchical
coordination and control than is assumed by the white paper and several contributions
to the governance debate. In a similar vein, Héritier (2003: 113–14) argues that
suasive instruments and soft law are not effective, when policy problems are at
stake that are highly politicised and result in a high degree of conflict between the
actors involved. In these cases policy problems can only be effectively solved,
if soft law and suasive instruments are complemented by command and control
instruments and hard law.
Both the shortcomings of hierarchical policy instruments and the need to
combine network-based and hierarchical instruments are already addressed in the
national context by the implementation research in the 1970s and early 1980s.
Based on empirical case studies, various authors show that implementing authorities
often lack the resources to effectively intervene in society by hierarchical policy
instruments. Moreover, an effective implementation of a policy output may not be
the first preference of these authorities. Even if an implementing authority aims

at an effective implementation, to a certain extent, it relies on the cooperation
with the addressees of political steering. The effectiveness of implementation
increases when the addressees of political steering are motivated to comply. Their
motivation may be enhanced by network-based instruments. However, political
steering by hierarchical policy instruments is necessary when the addressees of
political steering resist implementation because compliance creates costs (Mayntz
1980: 12–14, Pülzl and Treib 2007: 90–3).
Although the previous argumentations recognise that the effectiveness of
policy instruments is affected by the circumstances in which they are applied,
they conceive the effectiveness as an inherent characteristic of policy instruments.
In contrast to this argumentation, the effectiveness of a policy instrument is
also conceived as a result of the structural context of implementation. Several
scholars who study the implementation of European policy outputs in the member
states argue that the effectiveness of policy instruments depends on the degree
of compatibility between European provisions and the political arrangements in
the member states (Knill and Lenschow 1998, Börzel 2000, Knill and Lenschow
2000). Policy instruments are conceived as part of a broader political setting that
is embedded in national institutions. There is no certain type of policy instrument
that is in general either more or less effective than another instrument type. Rather,
the effectiveness of a policy instrument results from the relation between European
and national policies. Policy goals are implemented effectively when there is a high
degree of compatibility between European and national policy standards, problem-
solving approaches and policy instruments. This argumentation is criticised and
modified by various authors (Haverland 2000, Treib 2004, Falkner et al. 2005).
These authors question that the degree of compatibility constitutes a main factor
that explains the effectiveness of implementing European policy outputs. They
focus on characteristics of the political process in the member states in order to
explain why European policy goals are implemented effectively or not.
Interests and Beliefs
Choosing a policy instrument that effectively implements a policy goal or

effectively solves a policy problem is not just a technical exercise. Rather, the
definition of policy goals and policy problems is disputed by political actors.
Political parties, interest groups and other political actors have different goals and
consider different issues as constituting a policy problem. Thus, political actors
only prefer effective policy instruments if they agree with the policy goal that
should be achieved and regard the respective issue as a policy problem that should
be solved. Both the effectiveness and, as shown above, the coercion of policy
instruments favour certain groups of actors while others are put at a disadvantage.
Furthermore, the use of certain policy instruments does not only indirectly result
in benefits and losses. Policy instruments themselves are rooted in the interests and
beliefs of political actors. The choice of a policy instrument is a political decision

(Salamon 1981, Hall 1993: 278–81, Sabatier 1993: 17, 30–3, Peters 2002).
Although frequently discussed as opposed conceptions of political science,
approaches that focus on rational self-interests and approaches that highlight
actors’ normative beliefs are not mutually exclusive but complement each other.
The political process consists of both struggling for the distribution of values in
society and searching for effective solutions to policy problems. Both dimensions
are subject to conflict among political actors. By determining who gets what and
how much of restricted resources, the distribution of values in society is in the
interest of certain societal actors while other actors do not benefit. Moreover,
policy problems and their effective solution are not determined unambiguously.
An actor’s belief defines the policy problem and which solutions are regarded
as appropriate and effective. Thus, the political process is characterised by the
dispute between both interests and beliefs. Political actors are motivated by their
interests and their beliefs (Braun 1998).
Policy instruments are rooted in both national interests and ideological beliefs.
Ringeling (2002, 2005) argues that policy instruments reflect political ideologies
and national interests, while the latter is shaped by the former. He borrows from the
classification of Esping-Andersen (1990), who identifies three regimes of welfare
capitalism that are described as social democratic, conservative and liberal. As
Ringeling then argues, both nation states and political parties prefer specific policy
instruments and seek to adopt these instruments during the political process. The
ideological traditions differ in respect of their respective conception of the role of
the state. The role of the state, in particular the kind and scope of state intervention,
is reflected by policy instruments.
Initially rejecting the state as an instrument of the ruling class, social democrats
later were in favour of direct state intervention after suffrage was extended.
Social democrats pushed ahead public ownership and planning. Still they prefer
hierarchical intervention by command and control instruments and are distrustful
of market-based instruments. In contrast, the conservative or Christian democratic
tradition rejects state intervention, if public tasks can also be fulfilled by non-
state actors themselves. The typical arrangement of the conservative tradition is
corporatism, where the state moderates and private actors engage in self-regulation.
Thus, conservatives prefer policy instruments based on networks, but also other
instruments that facilitate societal self-regulation like public funds to private
organisations. Finally, liberals originally preferred legislation in order to legally bind
state actors and to protect societal actors from direct state intervention. The liberal
rejection of hierarchical state intervention still applies. However, contemporarily,
they prefer market-based instruments and network-based instruments that rely
on the voluntary compliance of the addressees of political steering. As briefly
illustrated, ideological preferences for policy instruments may change as a result
of altered political and societal conditions. Furthermore, ideologies that prevail in
nation states may change due to changes in government. The United Kingdom,
for example, was shaped by a liberal tradition. The liberal tradition was toned
down when the Labour party took over government in the 1920s for the first time.
When the Beveridge report was implemented after the Second World War, the
United Kingdom showed the characteristics of a social democratic welfare state.
The pendulum swung back to liberalism when Margaret Thatcher became British
Prime Minister in 1979 (Ringeling 2002, 2005).
1.4.2 Situational Structures
Besides characteristics of policy instruments, situational structures also affect the

actor constellation in a policy area. Structures are typical patterns of behaviour,
distribution, functions and relations within an entity. They describe the relationship
between parts of a whole. In a political system structures describe the relationship
between actors, the distribution of characteristics, resources and values among
actors, and the functional processes of preserving and reproducing the political
system. Structures abstract from concrete individual actors and their cognition and
motivation. Structures are situational if they influence the opportunities of political
actors in situations of purposeful actions and the way these actions are transformed
into results at the level of the political system. Situational structures affect the
power relation between actors within the actor constellation by influencing the
formation of coalitions, the resources that are at the disposal of the respective
coalition, and the support for certain interests or beliefs. Furthermore, they influence
which interests and beliefs are transformed into policy outputs (Schneider 1997).
Situational structures affect the choice of policy instruments by shaping the actor
constellation and thus creating and restricting the opportunity for political actors
to include certain policy instruments into policy outputs. Situational structures
are institutions, policy problems characterised by their level of politicisation and
external events.
Institutions
Institutions are rule systems that both restrict and enable the behaviour of actors.
In concrete terms, in this study institutions are represented by boundary rules and
decision rules. Boundary rules define who is entitled to participate in decision-
making and decision rules define how these decisions are taken (cf. section 1.3).
Boundary rules and decision rules are combined in the conceptions of veto points
and veto players. Both conceptions are similar. They theorise about the effect of
boundary rules and decision rules on the adoption of policy outputs. Immergut
(1992: 26–8) conceptualises veto points as the opportunity for political actors to
prevent decisions. She states that the adoption of policy outputs is the result of
a sequence of decisions in several arenas in a political system. These arenas are
linked by institutions and characteristics of the party system, which both provide
the opportunity to prevent a decision and thus represent veto points. The more
veto points a political system contains, the more likely it is that decisions are
blocked. Nevertheless, there is no deterministic relation between the number of
veto points and the adoption of policy outputs because there is no necessity for
actors to always make use of veto points. If political actors agree on a subject
matter, they will not prevent a decision regardless of the opportunity of using veto
points. Similarly, Tsebelis (1995) conceptualises veto players in order to explain
the capacity of a political system to produce policy change. Veto players are actors
whose approval is required in order to adopt policy outputs. As in respect of veto
points, the ideological distance between veto players is essential to the adoption
of policy outputs. The greater the number of veto players and the greater the
ideological distance between the veto players, the more likely the political status
quo is preserved because decision-making is blocked.
In the EU, until 1987 each member state represented a veto player because,
under the Luxembourg Compromise, a member state could block a decision if it
considered important national issues to be at stake. In 1987, the Single European Act
introduced the cooperation procedure to some areas of EU legislation and provided
for decisions by qualified majority voting. Then, the three main legislative actors
of the EU, the Commission, the European Parliament and the Council of Ministers,
constituted veto players. The power relation between these actors changed when
the co-decision procedure was introduced by the Treaty of Maastricht in 1993.
In the present co-decision procedure, the Commission is no longer a veto player,
but still has the power of an agenda-setter. As far as the ideological distance
between the legislative actors is concerned, the Council, the Commission and the
Parliament form a triangle in a two-dimensional space that represents the major
cleavages in EU policy-making. On the one hand, actors disagree in respect of
regional integration. While the Commission and the European Parliament favour
European integration, the Council puts more emphasis on preserving national
sovereignty. On the other hand, EU policy-making reflects the left-right cleavage
as it is traditionally found in the nation states. In the left-right dimension, the
Commission is supposed to be closer to the national governments because they
appoint the commissioners. The ideological alignment of the Council and of the
Parliament depends on the results of the elections to the national governments and
to the European Parliament, respectively (Tsebelis 2002: 248–82).
Tsebelis’ argumentation resembles the argument of the joint-decision trap
developed by Scharpf (1988, 2006a) on the basis of German federalism and applied
to the European polity. Scharpf argues that the lack of problem-solving capacity
and stagnation in a political system are the result of its institutional structure. The
joint-decision trap describes a multi-level polity in which decisions are taken at the
higher level and unanimous agreement of the lower levels is required. As far as the
EU is concerned, blockages of decision-making and inefficient compromises at the
lowest common denominator result from the institutional requirement that member
states have to agree on decisions unanimously. Introducing majority voting would
remedy the effects of the joint-decision trap. However, the introduction of majority
voting is again hampered by the unanimity rule. Member states would have to
give up their veto position and thus dispense parts of their national sovereignty.
Peters (1997) does not reject the argument of the joint-decision trap but argues
that it applies only to a limited realm of European policy-making. He argues that

the joint-decision trap refers to decisions in which vital national interests are at
stake and the negotiation process resembles international diplomacy. However, he
continues, most decision-making processes in the EU occur within policy areas on
a more mundane basis involving various actors struggling on substantive issues.
Veto points create the opportunity for political actors to prevent the adoption
of policy outputs they do not agree with. These policy outputs contain substantive
issues but also prescribe the policy instrument that should be applied. In the first
place, political actors will block a decision if they do not agree with the subject
matter of the policy output. More specifically, in respect of decisions about policy
instruments, two situations in which political actors make use of veto points can be
deduced from the discussion about characteristics of policy instruments in section
1.4.1. First, political actors will prevent the adoption of a certain policy instrument
if this instrument does not represent their interests or beliefs. Second, if political
actors do not agree with the subject matter of a policy output but do not have
enough veto power to block the decision as a whole, they will seek to adopt policy
instruments which they regard as less effective and which exert a low degree of
coercion on the addressees of political steering. Vice versa, if political actors
agree with the subject matter of a policy output, they advocate policy instruments
which they regard as effective and which exert a high degree of coercion on the
addresses of political steering. Whether veto points are used depends on the level
of conflict in the policy arena. In turn, the level of conflict mainly results from the
politicisation of policy problems.
Politicisation of Policy Problems
Policy problems emerge when an actor desires a certain object or state, and may
in principle obtain that object or state, but cannot reach it by acting alone because
other actors are either the cause of the problem or control resources that are needed
to solve the problem. Thus, policy problems are a result of the interdependence of
actors. The definition of a policy problem neither involves the method of its solution
nor its relevance to the political debate. Policy problems may not only be solved
by the hierarchical intervention by public actors but also by market mechanisms or
private self-regulation in networks. Whether a policy problem becomes subject to
the political debate depends on the interests and resources of the actors involved.
There are three groups of policy problems: problems of coordination, problems
of redistribution and problems of negative externalities and common goods. The
politicisation of policy problems reflect the level of conflict entailed in the nature
of a policy problem. Coordination problems do not cause considerable political
conflict because all actors involved profit from common actions and common rules.
Agreeing, for example, on driving on the left side of the road does not discriminate
against certain drivers but creates a benefit for all drivers, since everybody would
be driving on the same side. Technical standards that make products compatible and
property rights that reduce distrust and transaction costs also belong to solutions to
policy problems of this type (Scharpf 1997: 69–72).
Coordination problems are not politicised. Non-politicised policy problems
are characterised by the cooperation between actors who pursue problem-solving.
Since they seek to reach joint benefits, the level of conflict is low. In contrast, both
problems of redistribution and problems of negative externalities and common
goods are highly politicised. Policy problems are politicised when they are subject
to the contest between societal interests and political beliefs. In the EU, politicised
policy problems are permeated by national interests and party political beliefs.
The actors involved bargain in order to realise their interests and beliefs. In this
situation the level of conflict is high because some actors gain while other actors
lose (Elgström and Jönsson 2000: 691–2). Problems of redistribution result in a
high level of conflict in the policy arena because the redistribution of values creates
societal groups that benefit at the expense of other societal groups that lose. As a
consequence, associations that represent the respective group oppose each other in
the policy process. Redistributive problems emerge either when the solution of a
policy problem requires redistribution or when the existing distribution of values
in society is at stake. The question of a fair redistribution between societal groups
is subject to the conflicting ideological beliefs of the political actors involved
(Lowi 1964: 691, 703–13).
Problems of negative externalities and common goods result from individualistic
and competitive actors who take advantage of a specific situation. Common goods
are characterised by free access and rival consumption. Nobody can be excluded
from consuming that good, and if an actor consumes the good, its consumption is
limited for other actors. There are three similar concepts that address the problem
of common goods: the tragedy of the commons, the prisoner’s dilemma and the
logic of collective action. Essential to any of these concepts is the so-called free-
rider problem: Since nobody can be excluded from the consumption of the good,
rational self-interested actors will consume the good but will not contribute to the
costs of providing the good, because they also profit from consumption even if
they do not share the costs. Furthermore, rivalry of consumption creates negative
externalities: Individual actions of consumption affect other actors by restricting
their opportunity to use this good. Due to the free access, the restricted availability
of the good is not reflected in its price. Thus, rational self-interested actors overly
consume common goods, while other actors are put at a disadvantage due to
this over consumption. Joint benefits are not achieved. Problems of negative
externalities and common goods can only be solved in line with collective benefits
if several conditions are met that result in stable institutions which regulate the
provision and the use of common goods (Ostrom 1990).
Peters (2005b) stresses the argument that the nature of a policy problem affects
the choice of policy instruments. He presents a list of problem characteristics that
are relevant to instrument choice, but admits that the analysis of the link between
problems and instruments is still preliminary. Broadly, the characteristics of policy
problems can be divided into two groups. On the one hand, there are problem
characteristics that affect the technical solubility. On the other hand, there are problem
characteristics that affect the political solubility. Using Scharpf’s classification of
policy problems, technical characteristics are relevant to coordination problems.
Technical characteristics are also relevant to problems of redistribution and problems
of negative externalities and common goods, but in these cases they are overlaid
by political characteristics. As argued above, the main political characteristic of
policy problems is their politicisation, which results from redistribution, negative
externalities and common goods. By indicating the level of conflict, policy problems
are translated into the actor constellation in a policy area (Scharpf 1997: 71–2). If a
policy problem is not politicised, political actors will agree on the policy instrument
that they regard as most effective to reach the common goal. Technical aspects
are subject to debate, and the actor constellation is characterised by a low level of
political conflict. In contrast, when policy problems are politicised, political actors
will pursue policy instruments which exert a low degree of coercion on their clientele,
policy instruments which they regard as effective in achieving their policy goals, and
policy instruments which represent their interests and beliefs. The actor constellation
is characterised by opposing coalitions that have various resources at their disposal
and advocate competing interests and beliefs. Thus, the actor constellation has a
high level of conflict.
External Events
In addition to institutions and the politicisation of policy problems, external

events constitute a situational structure that directly affects the actor constellation
and indirectly the choice of policy instruments. This argument is put forward
by both theoretical considerations and empirical studies. From a systems theory
perspective, Druwe and Görlitz (1992: 155) argue that changes within a system are
triggered by perturbations stemming from outside the system. Perturbations are
unusual changes in the structure of a system’s environment that induce a stimulus
on the system. However, whether perturbations result in changes within the system
depends on system internal factors. Sabatier and Jenkins-Smith (1999: 123,
149) take up the notion of perturbations and argue that changes in the essential
characteristics of policy beliefs and policy outputs, including policy instruments,
require a perturbation in factors external to the system. While institutions and
policy problems are relatively stable, changes primarily stem from external
events. As external events relevant to policy formulation they list changes in
socio-economic conditions, public opinion, government coalitions and impacts
from other systems. Referring to empirical studies, Holzinger and Knill (2003a: 9,
16–18) further mention technological progress as an external event that affects the
choice of policy instruments. The digitalisation of television, for example, enables
an increased competition between various suppliers of TV programmes and thus
fosters the application of market-based policy instruments.
Nevertheless, the effects of external events on the adoption of policy outputs
and policy instruments are not as systematically conceptualised as the effect of
institutions and policy problems. Applications of Sabatier and Jenkins-Smith’s

advocacy coalition framework consider external events inductively. Changes in
government, terrorist activities, oil-price shocks, droughts or increases in taxes
are regarded as relevant to policy-making in the respective policy area under
study, but deductive statements about the link between external events and policy
outputs are not made (e.g., Mawhinney 1993: 68–9, Munro 1993: 113–15). This
procedure corresponds to the argument stated by Mayntz and Scharpf (1995a: 47),
that refraining from systematically conceptualising the effects of non-institutional
structures on the adoption of policy outputs has two advantages. On the one hand,
it reduces the complexity of the theoretical argument and thus facilitates empirical
research. On the other hand, it enables a greater receptiveness when looking for
explanatory factors.
1.4.3 Actor Constellations
Actor constellations describe the relations between actors who are engaged
in policy-making in respect of a certain policy problem. An actor constellation
represents a relational structure of interdependent actors. It describes the
distribution of resources, powers, interests and ideological alignments as well
as the formation of coalitions (cf. section 1.3). The values and distribution of
interests and beliefs among political actors constitute cleavage structures which
separate conflicting political parties and societal groups. The kind and scope of
political conflict within an actor constellation is represented by the presence or
absence of cleavages. Mair (2007) argues that policy-making in the EU is largely
depoliticised, policy outputs are adopted in a more or less deliberate process, and
conflict between government and opposition as it is characteristic of political
processes in nation states is absent. Thus, cleavages are weak and the level of
conflict is low. As far as the choice of policy instruments is concerned, political
actors will choose the instrument they regard as being most effective in solving the
policy problem at stake. Nevertheless, Mair (2007: 9–10) admits that there may be
two dimensions of conflict and competition in EU policy-making that correspond
to the national cleavage structures which emerged during state formation and are
frozen into national party systems, as analysed by Lipset and Rokkan (1967). In EU
policy-making there is a cleavage on integration on the one hand and a cleavage
on ideology on the other. The integration cleavage refers to the scope of European
integration. It addresses the questions of which competences should be located at
the European level and to which extent European rules should penetrate policy-
making in the member states. The ideology cleavage refers to the distribution of
values and resources in policy areas. It is synonymous with the cleavage between
left-wing and right-wing parties in the nation states.
There are several studies which analyse conflict in European policy-making
but identify different relationships between the two cleavages (see Steenbergen
and Marks 2004, Treib 2005). Tsebelis and Garrett (2000), for example, argue
that in order to explain law-making processes in the EU, it is most apposite to
assume a scenario in which the integration cleavage and the ideology cleavage are
congruent, and leftist actors in the Council of Ministers, the Commission and the
European Parliament support EU legislation while rightist actors oppose further
regulation at the European level. In contrast, Hix and Lord (1997: 49–53) argue that
European integration and political ideology are two cross-cutting cleavages of the
party system. On the one hand, the main political parties are internally divided over
the question of pursuing further integration, although the mean position of greens,
social democrats, Christian democrats, conservatives and liberals is similarly in
favour of European integration. Because the coherence of these parties is weak in
respect of the integration cleavage but strong in respect of the ideology cleavage,
these parties phrase integration issues in ideological terms. On the other hand,
both at the left and at the right of the party system, there are regionalist parties
that favour European integration and anti-European parties that oppose European
integration. Hooghe, Marks and Wilson (2002) also assume a two-dimensional
political space that is stretched out by the integration and ideology cleavages.
However, they identify that both cleavages are related insofar as centrist parties,
including most conservatives, Christian democrats, liberals and social democrats,
support European integration, whereas extreme left-wing and extreme right-wing
parties at the periphery of the party system oppose European integration.
Both Marks (2004) and Treib (2005) compare the different models of cleavage
structures but do not find an overall or unambiguous support for any of the models.
Nevertheless, both authors argue that actors’ positions on integration and ideology
are related at the lower level of single policy issues insofar as political actors
favour further European integration, if they ideologically agree with the policy
issue at stake. Left-wing actors, for example, favour European regulation in
employment policy, whereas right-wing actors support EU-wide harmonisation
that results in market integration. This argument can also be applied to the choice
of policy instruments. Legal instruments are subject to the integration cleavage,
while governance instruments represent the ideology cleavage. Political actors will
pursue hard law when they share the content of a policy proposal, including the
governance instrument. When legislation cannot be passed because of veto players
who prevent the adoption, the actors in favour of the regulation will prefer soft law
to the absence of any European measure. Vice versa, when political actors disagree
with the problem-solving approach and the governance instrument of a policy
proposal and do not have veto power to block the decision, they will advocate
policy outputs in the form of soft law. The manner in which conflict about the
choice of policy instruments is resolved depends on the mode of interaction.
1.4.4 Modes of Interaction
Scharpf (2001, 2006b: 7–14, 2006a: 847–53) adapts the modes of interaction,
as described in section 1.3, to the European level. He identifies mainly three
modes of interaction in EU policy-making: the intergovernmental mode, the
joint-decision mode and the supranational-centralised mode. The latter is most
clearly represented by the authority of the European Central Bank in the area of
monetary policy. When pursuing its primary goal of maintaining price stability,
the European Central Bank autonomously makes provisions that are directly
applicable in the member states. In European environmental policy and European
social policy, coordination in policy-making is described by the joint-decision
mode and the intergovernmental mode. Joint-decision making applies to policies
of the first pillar of the EU where, on the basis of the EC Treaty, the Commission
initiates legislation that has to be adopted by the Council of Ministers and the
European Parliament. Legislative proposals are passed either by unanimity or by
qualified majority. Intergovernmental agreement mainly refers to policies of the
second pillar of common foreign and security policy and to the third pillar of
justice and home affairs. Nevertheless, it also occurs in the first pillar, when the
Council of Ministers has to decide by unanimity. In intergovernmental agreement,
member states are the main actors and decisions have to be taken by unanimity or
by consensus.
The actors involved and the decision rules are main characteristics that
describe the mode of interaction. However, the distinction between joint-decision
making and intergovernmental agreement is not clear-cut. Legislative proposals
that are initiated by the Commission and require a unanimous decision in
the Council of Ministers may be regarded either as joint-decision making due
to the Commission’s legislative initiative, or as intergovernmental agreement
because of the opportunity for member states to veto the decision. Nevertheless,
both joint-decision making and intergovernmental agreement are described as
negotiation (Scharpf 2006a: 847–51). Thus, the mode of interaction in European
environmental policy and European social policy can be conceived as negotiation
that is shaped by boundary rules and decision rules. Boundary rules define the
actors involved and their functions. Decision rules comprise the ways of reaching
policy outputs. Both types of rules depend on provisions made in the Treaties.
Decoupling boundary rules and decision rules from the definition of the mode
of interaction follows the conception of actor-centred institutionalism (cf. section
1.3) and avoids the problem of the blurred distinction between joint-decision
making and intergovernmental agreement in European environmental policy and
European social policy.
Negotiations represent a mode of interaction where political actors are not
able to achieve their objectives unilaterally but have to reach an agreement with
other actors. Negotiations range from the coercive determination of hierarchical
direction to the voluntary action of unilateral mutual adjustment. In negotiations,
various interests are accommodated and transformed into common rules or norms
(Scharpf 1997: 143–4, Bulmer and Padgett 2005: 104). At the European level,
negotiations describe the process by which member states agree on policy outputs
that are adopted by the EU. Whether a negotiated agreement is reached depends
on the decision rule and the interaction orientation of political actors. The decision
rules applied in EU policy-making are unanimity and qualified majority voting.
Within negotiations, political actors may pursue a bargaining orientation or a

problem-solving orientation (Bulmer and Padgett 2005: 109–10).
Both terms, bargaining and problem-solving, are used ambiguously. On the one
hand, bargaining and problem-solving are regarded as the two values of interaction
orientation that are relevant to negotiations. Bargaining describes the motivation
of actors that pursue their self-interest, whereas problem-solving represents the
actors’ orientation that focuses on the common interest (Elgström and Jönsson
2000: 685). In this case, bargaining is synonymous with an individualistic
interaction orientation, and problem-solving corresponds to the interaction
orientation of solidarity. On the other hand, problem-solving is conceived as a type
of negotiation which is characterised by a high salience of producing social values
and a low salience of their distribution. A problem-solving negotiation is facilitated
by solidarity but does not necessarily rely on this interaction orientation (Scharpf
1997: 126, 130–2). By showing that the interaction orientation of political actors
can only be inferred (cf. sections 2.3), the distinction between actors’ motivation
and their behaviour in negotiations becomes obsolete. Thus, problem-solving
describes a negotiation in which political actors seek to create values of a common
interest. In contrast, in bargaining negotiations, political actors seek to distribute
values in favour of their self-interest.
All negotiations entail both problem-solving and bargaining. On the one hand,
actors involved in a negotiation must have a minimum of common interests.
Otherwise negotiation would be useless. On the other hand, when there are no
diverging self-interests, negotiations are not necessary because common goals can
be achieved by cooperation. In EU policy-making, both bargaining and problem-
solving occur simultaneously. Whether bargaining or problem-solving prevails
depends on contextual factors (Elgström and Jönsson 2000: 690). Contextual
factors that affect the choice of policy instruments in the EU has been discussed in
this and the previous sections. Before empirically analysing the choice of policy
instruments in European environmental policy and European social policy on the
basis of the theoretical framework developed in this chapter, the following chapter
shall discuss conceptual and methodical issues of comparing policy areas.
Chapter 2
Comparing Policy Areas
This study focuses on policy areas as a whole. Hence, by comparing policy areas,
this study abstracts from processes that result in the adoption of single policy
outputs. Analysing general structural patterns of policy areas provides some
pitfalls. Therefore, the delineation of policy areas, the case selection and the
methodical procedure applied in this study are discussed at some length in this
chapter. Any number of studies that analyse policy-making within policy areas
refer to the work of Lowi (Freeman 1986, Windhoff-Héritier 1987). Lowi (1964,
1972, cf. section 1.4.1 and section 1.4.2) argues that the policy type and, related to
it, the kind of a policy problem affect the level of conflict in the arena of political
contest. Furthermore, Lowi (1964: 686–91) argues that for analytical purposes the
delineation of policy areas has to be abstracted from nominal categories. Policies
should not be conceived as educational policy, environmental policy or transport
policy but as policy types, namely distributive, regulatory and redistributive policy.
The conception of policy types enables abstraction from idiosyncratic processes
in a single policy area, and thus identifies general patterns of policy-making in
different nominal policy areas.
At first glance, Lowi’s argumentation renders a comparison of policy areas
unnecessary. However, the concept of policy types and the notion of nominal
policy areas are not mutually exclusive. Rather, they constitute different stages of
the research process. At first, the nominal category defines a policy area as the unit
of analysis. Subsequently, concepts establish classes of policy areas by identifying
common characteristics in respect of answering the research question. Policy
areas that belong to the same type are similar and thus comparable across nominal
categories, political systems and time. Finally, concepts are succeeded by theories,
which infer cause and effect of factors specific to a policy area (Rose 1991: 447–9,
Sartori 1991: 245–7). Lowi’s argumentation is relevant to the second (cf. section
2.2) and the third stage (cf. section 1.4.1) of explaining policy instruments in
policy areas, but the concept of policy types does not contribute to the delineation
of policy areas. As a result of the discussion of Lowi’s argument, the notion has
crystallised that characteristics specific to a certain policy area affect the political
process and the adoption of policy outputs. Consequently, particular patterns of
policy areas become a focus of analysing political processes and public policies
(Heinelt 1993: 307–8). In order to identify such particular patterns of policy areas,
studies must engage in comparing policy areas.
Comparative studies are a method of control by identifying both similarities and
differences between cases in respect of characteristics that are regarded as relevant
to answer the research question. Characteristics are controlled when they are held
constant over the cases that are analysed (Sartori 1991: 244–7). Comparative
studies may compare observations in a political system or a policy area at different
points in time (diachronic comparison), or observations at one point in time in a
policy area in different political systems, or in different policy areas of the same
political system (synchronic comparison) (Bartolini 1993). Each of these forms
of comparison focus on different explanatory factors by holding different factors
constant. By comparing policy areas of a political system one at a time, overall
properties of the political system are held constant and characteristics that change
over time are not recognised. Thus, the cases that are compared are similar at least
in respect of time and the political system. If two or more policy areas are similar
beyond the time and the political system, a comparative analysis may identify
particular patterns of the policy area. Hence, comparing European environmental
policy and European social policy provides a way of identifying factors specific to
the respective policy area that explain the choice of policy instruments.
In respect of applying the comparative method in order to explain the choice
of policy instruments by identifying specific characteristics of policy areas, two
possible misunderstandings should be avoided. First, comparing policy areas is
not a replacement of theoretical reflection. Rather, the comparative method can
only be applied in conjunction with a theory. The comparative method by itself
does not provide any criteria for assessing which characteristics of a case are
relevant to the explanation of a certain social phenomenon. In order to infer cause
and effect of factors, a theory is necessary that identifies the relevant explanatory
variables and the way they affect social phenomena (Skocpol 1979: 39, Bunge
1996: 49–53, 71–2). Second, comparing policy areas does not result in using
concepts and explanatory factors that differ from those applied when political
systems or points in time are compared. Rather, factors relevant to the overall
political system have values specific to a certain policy area. Particular patterns of
the policy area mediate the effects of overall characteristics of the political system.
Characteristics of policy instruments, institutions, policy problems, external
events, actor constellations and modes of interaction may have different effects
and different values in various policy areas (Heinelt 1993, John and Cole 2000).
In empirical political science, comparative studies applying the logic of the
most similar system design or the most different system design constitute an
appropriate method to infer cause and effect of empirical phenomena (Scharpf
1997: 23). The most similar system design consists of cases that resemble another
in respect of as many potential explanatory variables as possible, and differ only
in the values of one or few independent variables. If these independent variables
co-vary with the dependent variable, they can be regarded as possible cause of the
observed outcome. In contrast, the most different system design consists of cases
that only have one or few features in common. If only one or few explanatory
variables and the outcome variable have constant values in all cases, the constant
explanatory variable or variables may possibly cause the outcome (Przeworski
and Teune 1970: 32–9). The most different system design and the most similar
system design are two different strategies to solve the general problem of political
Comparing Policy Areas 57
science that consists of the fact that there are many variables but only few cases.
On the one hand, the most different system design seeks to maximise the number
of cases and apply statistical analysis. On the other hand, the most similar system
design seeks to decrease the number of variables (Lijphart 1975: 163–4).
As far as the most different system design is concerned, cases are selected at the
subsystem or even the individual level. If systemic features vary unsystematically,
they can be regarded as not relevant for the explanation, and cases can be derived
from a large population. As long as the cases derived from different systems show
the same relationship between independent and dependent variables, structural
variables can be neglected. While the most different system design focuses on the
elimination of irrelevant systemic factors, the most similar system design aims at
identifying explanatory factors at the systemic level by maximising the variance of
one or few independent variables while other features remain similar. The number
of independent variables is reduced when the variance of control variables, that
is, variables which may be alternatively considered to cause the outcome, is
minimised (Przeworski and Teune 1970: 32–9).
By comparing policy areas, the variance of characteristics specific to a policy
area is increased and general characteristics of the political system are held
constant. The design of comparing policy areas within a political system is chosen
in order to identify characteristics specific to a policy area that are able to explain
the observed policy output. The aim of this study is to identify factors at the level
of the policy area that explain the choice of policy instruments in the respective
policy area. Within this study, characteristics specific to a policy area constitute
systemic factors that are on the one hand incorporated into the political system
and on the other hand affected by sub-systemic characteristics. Hence, in order
to explain the choice of policy instruments in European environmental policy
and European social policy, the most similar system design is applied because it
enables to identify explanatory factors at the systemic level of a policy area.
Studies that compare policy areas operate at a medium level of abstraction. The
level of abstraction of a concept is defined by the collection of properties that the
concept includes in order to classify empirical phenomena, and by the extent of
empirical phenomena to which the concept applies. The level of abstraction is high
if a concept includes only few properties but encompasses a wide range of cases.
Vice versa, the level of abstraction is low if a concept includes many properties but
applies only to few empirical phenomena. There is a trade-off between the accuracy
of description and the range of explanation (Sartori 1970: 1040–5). The concept of
a policy area is on the one hand less abstract than the concept of a political system
and on the other hand more abstract than the concept of a policy output. Thus,
compared to studies focussing on political systems, studies that compare policy
areas within a political system reveal more distinctive features of the process of
policy-making but refer only to segments of the political system. Compared to
studies analysing the formulation, adoption and implementation of single policy
outputs, studies that compare policy areas provide less detailed information but
apply to general patterns of the policy process in a wider range. In order to show
the level of abstraction and to define the cases of this study, ways of delineating
policy areas are discussed in the following section. Subsequently, section 2.2
gives reasons why European environmental policy and European social policy are
chosen as cases to be compared in this study. Finally, section 2.3 discusses the data
on which this study is based, the method applied to collect and analyse the data,
and the inferences that can be drawn from the data.
2.1 Delineation of Policy Areas
The production and distribution of social values and the struggle for political power
takes place within policy areas. Within a policy area, political alternatives are
discussed, decisions adopted and policy outputs implemented. There are several
concepts similar to the concept of policy areas, like government programmes
(Rose 1984: 6–9), policy subsystems (Sabatier and Jenkins-Smith 1999: 135–7),
policy regimes (Wilson 2000: 257–8) and risk regulation regimes (Hood, Rothstein
and Baldwin 2001: 9). Although emphasising different aspects of policy-making,
each of these concepts supports the notion that policy-making occurs in a segment
of the political system delineated by its content and its function. Nevertheless,
the conception of policy areas is still the most widespread one in policy analysis
that is approved by authors from various theoretical backgrounds (Burstein 1991:
329–30, Druwe and Görlitz 1992: 144, Knoke 2004: 82–3). Hence, the delineation
of policy areas depends on the theoretical perspective. In detail, policy areas are
conceived as social systems and policy networks. Furthermore, policy areas are
delineated by organisations and political institutions. However, as the following
discussion shall show, there are several overlaps between the ways of delineating
policy areas. By combining these ways of delineation, a policy area is defined as a
segment of the political system that is comprised by organisations concerned with
a set of substantive issues and a particular structure considerably shaped by the
interrelation between these organisations.
Social Systems
The notion of social systems originates in systems theory and functionalism.

Easton (1965) applies a perspective of systems theory to the policy process.
According to this perspective, society is divided into social systems. Social
systems are constituted by the function they fulfil for the existence of society. The
political system is one of these social systems. The political system is a system
of behaviour. It is composed of interactions among people. However, despite the
focus on actors, system boundaries are not defined by the perception of the actors
involved but by analytical consideration. That feature is chosen as the defining
property of a system that is regarded as most relevant for describing the peculiarity
of the system in contrast to its environment. The environment of the political
system consists of other systems of society. This distinction of a system and its
environment is central to systems theory. Since a system and its environment are
defined from an analytical perspective, concepts that delineate a social system are
neither true nor false, but more or less useful. Easton identifies the authoritative
allocation of values as the defining property of the political system. He defines
the political system as a ‘set of interactions, abstracted from the totality of social
behavior, through which values are authoritatively allocated for a society’ (Easton
1965: 57).
The political system is the most inclusive entity in which the policy process
takes place (Easton 1965: 56). Although not discussed explicitly by Easton, a
policy area can be regarded as a segment of the political system where decisions
are taken and policy outputs are implemented that authoritatively allocate values
in another particular social system. Thus environmental policy makes provisions
that bindingly allocate values in the ecological system, for example by restricting
the exploitation of natural resources, regulating land use or guaranteeing access to
clean water. Social policy authoritatively effects the social structure, for example
by redistributing material means between social groups, regulating industrial
relations or combating poverty (Easton 1965: 50, 70–5).
Actor-centred approaches contradict systems theory in many respects.
Nevertheless, also actor-centred approaches conceive policy areas as social
systems because they approve the notion of social systems as a characteristic
of modern societies (Braun 1993). Bunge rejects the functionalist presumptions
of systems theory but also takes up the notion of social systems. Like Easton
(1965: 26–7) – although in different wording and different classification – he
distinguishes between concrete systems that exist in the physical world, symbolic
systems that represent the physical world, and conceptual systems that are of
analytical nature. However, in contrast to Easton, Bunge does not commence with
conceptual systems but with concrete systems. Bunge argues that every real object
is a component of a system and is itself a system. Society is composed of social
systems, namely the biological system, the cultural system, the economic system
and the political system. A social system is a concrete system composed of actors
who face a common environment and interact directly or indirectly in an at least
slightly cooperative manner. The political system encompasses those interactions
that seek to manage social activities in the society. It is shaped by explicit goals,
plans and rules (Bunge 1996: 20–2, 266–73). Despite not sharing the functionalist
presumptions, Bunge’s notion of social systems results in a definition of policy
areas that is similar to that of Easton’s systems theory approach. A policy area can
be defined as a segment of the political system that is composed of the interactions
of actors who seek to achieve policy goals that refer to a certain domain of social
problems and activities.
Policy Networks
Similar to the notion of social systems, the notion of networks refers to the
interrelation between actors. Furthermore, both social systems and policy networks
have a certain degree of independence from their environment. If a policy area is
conceived as a social system, a policy network describes the actor constellation

within this social system (Pappi 1993: 91–2). Approaches of policy networks focus
on relational patterns of interaction among political actors. They identify actors that
are indispensable to decision-making and those that have less influence, actors that
have great power and those that have small power, and actors that have a central
position in the network and those that are at the periphery. In technical terms,
networks consist of nodes and relations between these nodes. As far as policy
networks are concerned, the nodes are represented by political actors. Relations
between political actors emerge when they exchange information, depend on
resources at another actor’s disposal or trust each other in long-term coordination
(Kenis and Schneider 1991). Thus, actors and their interrelations delineate a policy
area conceived as a policy network. The actors of a policy network engage in the
same substantive and functional concerns. Despite conflicting interests, diverging
beliefs and competing coalitions within a policy network, all network actors share
a common view on which policy problems have to be tackled within the policy
area (Pappi 1993: 91–2).
There are two ways of identifying whether actors can be grouped together into
a policy network. On the one hand, as in systems theory, characteristics of actors,
their relations and their activities can be identified according to a theoretically
derived criterion that serves an analytical purpose. On the other hand, a group
of actors is regarded as policy network, if the actors involved regard the group
as belonging together on the basis of a certain characteristic, relation or activity.
The two ways of identifying network actors are represented by two approaches
that consider certain characteristics of actors. The positional approach uses formal
properties like the occupancy of a position or the membership in an organisation
to delineate a policy network. In contrast, the reputational approach looks at the
judgement of actors in respect of reputation and importance of other actors in
order to specify the boundaries of a policy network. Both approaches are not
mutually exclusive but can be combined (Laumann, Marsden and Prensky 1983:
20–3). Nevertheless, the recognition of an actor by another actor, expressed by
the reputational approach, is essential to the notion of policy networks. From a
policy network perspective, a policy area is a system ‘identified by specifying a
substantively defined criterion of mutual relevance or common orientation among
a set of consequential actors concerned with formulating, advocating, and selecting
courses of action [that is policy options] that are intended to resolve the delimited
substantive problems in question’ (Knoke and Laumann 1982: 256).
Organisations
Approaches of policy networks regard organisations as the main actors in a policy

area (Knoke and Laumann 1982: 256–8). The dominance of organisations as main
actors in modern societies is the result of historical processes that have endured
for centuries (Coleman 1974, Perrow 1996). Janning (1998: 221–4, 322–3) also
focuses on organisations, but criticises the conception of policy areas as policy
networks because theories of interaction and network analysis overemphasise

contact, resource exchange and relations between political actors and neglect
processes that constitute and reproduce societal systems. However, functionalist
approaches, in contrast, account for the stability and reproduction of social order
and the differentiation of society into subsystems, but disregards the formation
of society by collective action. Janning as well as Mayntz take a position in
between policy network approaches and functionalist approaches. They consider
organisations as the main parts that comprise a policy area. As far as the emergence
of policy areas is concerned, the process of the development of organisations is
complemented by a process of functional differentiation of society.
A policy area can be regarded as a subsystem of society that results from
functional differentiation. Mayntz (1988: 17–23) defines a functional subsystem
as an interrelationship of actions that is recognised and consolidated within
society and fulfils a specific function. In contrast to systems theory, this function
does not stem from the necessity of certain outputs in order to guarantee the
existence and reproduction of society but from the meaning that is ascribed to
actions and interactions by society. The function of a social subsystem refers to
specific services that producers render to recipients. Analytically, three levels of
differentiation can be identified. Single actions and interactions that take place in
a specific situation and are acknowledged by society constitute the lowest level.
The medium level encompasses actors who engage in functional roles. These roles
guarantee a continuous performance of the respective function, and are mainly
synonymous with occupations. Conglomerations of actors are situated at the
highest level. Although clubs, coalitions or social movements also represent an
aggregation of actors, societal subsystems are mainly constituted by organisations.
Organisations shape functional subsystems and give them a characteristic structure
[Gebildecharakter]. This highest level of differentiation is characteristic of
functional subsystems. Thus, a policy area is an interrelationship of organisations
that fulfil a specific function.
Janning combines Mayntz’ conception of organisations as main actors in
functionally differentiated subsystems with Bourdieu’s conception of fields in
order to create a theoretical perspective that reconstructs the policy process as a
complex network of relations. The notion of fields is borrowed from physics, where
fields denote relations between forces, e.g. the magnetic field or the gravitation
field. By assigning the notion of fields to social science, a field can be regarded
as the environment of actors that structures the relation between individual
actors and the relation between individual actors and society. The emergence of
a field is the result of the struggle for the production and the usage of capital.
In this sense, capital is not restricted to economic capital but also encompasses
cultural, social and symbolic capital. A field is the location of the competition for
power and status (Janning 1998: 191–204, 220–5, 321–7). Applied to the policy
process, a field is conceptualised as a political field of organisation [politisches
Organisationsfeld]. It is constituted by those organisations that are involved in the
formulation of policy outputs and their implementation. Both the organisations
and the roles within the organisations are functionally differentiated in order to
generate political decisions. A political field of organisation is delineated by the
specific types of organisations that are used for the allocation of services, the
utilisation of resources and the production of goods. Organisations contribute to
the consolidation of peculiar institutional arrangements and beliefs about social
order (Janning 1998: 21–6, 369–70).
Political Institutions
Both Mayntz and Janning argue that policy areas are shaped by organisations and
become firmly established by institutions. The distinction between policy areas
delineated by organisations and policy areas delineated by political institutions
is blurred. DiMaggio and Powell (1983: 147–9) argue that organisational
fields are institutionally defined in a process of four stages. First, interactions
among organisations increase. Second, dominant organisations develop and
coalitions of organisations emerge. Third, organisations face an increasing
load of information. Finally, organisations of a field mutually recognise other
organisations as involved in the same field. In contrast to institutions conceived
as rule systems that affect but do not include actors (Scharpf 1997: 38, cf. section
1.3), Göhler (1997) argues that political institutions are also closely connected
with actors. Thus, in addition to political institutions as norms and rule systems,
he identifies political institutions that include actors. The latter are synonymous
with organisations. Thus, parliaments, governments and, at the European level,
the Commission and the Council are conceived as political institutions. Political
institutions, both with and without actors, fulfil two functions: political steering
and integration. On the one hand, political institutions intentionally regulate the
behaviour of people and organisations. On the other hand, they establish unity
in societal diversity by providing norms and principles that give orientation to
citizens and societal actors. Both functions create an area of firmly established
patterns of interaction.
At first, the delineation of policy areas by political institutions refers to nominal
categories. Policy areas are delineated by the institutionally defined responsibility
of ministries, departments and agencies. For example, environmental policy
encompasses all issues and policy problems that are tackled by the ministry of the
environment. In this case, a policy area is characterised by a certain substantive
and functional communality of policy issues. In addition, political institutions may
define policy areas either on the basis of the addressees of the policy, like migration
policy, or on the basis of the polity level on which policy outputs are formulated,
like foreign policy or local policy. Nevertheless, in any case, a policy area does not
result simply from establishing and naming public authorities. Rather, ministries,
departments and agencies, i.e. political institutions, have been emerging and
evolving in a historical process in interdependence to the development of state
responsibility and public tasks (Windhoff-Héritier 1987: 21–2).
2.2 Case Selection
As discussed in the previous section, a policy area is defined as a segment of

the political system, composed of organisations, characterised by the structured
interrelation between these organisations, and delineated by related substantive
issues in which the organisations engage. In this study, a policy area constitutes
a case. Following an apt text book definition, a case is the unit of analysis about
which information is collected in order to make inferences and answer the research
question (de Vaus 2001: 220). European environmental policy and European social
policy are selected as cases in order to analyse the adoption of policy instruments
because of their similarity in the policy type dominant in the two policy areas.
The policy type establishes the similarity between the two policy areas in respect
of the main characteristic of a policy area that is relevant to the explanation of
the choice of policy instruments. It has been argued that the various explanations
of policy instruments can be summarised in three hypotheses, which guide the
analysis in this study. The main feature of the three hypotheses is the level and
the type of conflict in the policy area (cf. section 1.2). Based on Lowi’s argument
that the policy type affects the type and level of conflict in a political arena (cf.
section 1.4.1), the cases are similar and thus comparable, if they are dominated by
the same policy type. Both European environmental policy and European social
policy are dominated by regulatory policy.
Selecting cases due to their similarity in relevant explanatory factors is but
one way of case selection. Acknowledging the limited applicability of random
selection, King, Keohane and Verba (1994: 124–38) argue that the minimum
requirement for sensibly selecting few cases is that the dependent variable is
allowed to vary. They further argue that cases should be selected on the values
of the independent variable. Those cases should be selected in which the value
of the independent variable varies in order to control for that variable and to
prevent predetermining the result of the empirical analysis. The result of the
empirical analysis is predetermined either when cases are selected on the values
of the dependent variable after having considered the values of the independent
variable, or when the independent variable and dependent variable are considered
simultaneously.
The selection of the independent variable prevents a selection bias but does not
guarantee the comparability of the selected cases in the respective study. In order
to establish the effect of the independent variable, control variables have to be held
constant. An analysis that holds control variables constant while the independent
variable varies uses the logic of the most similar system design (cf. section 2).
The most similar system design has to be conceived as a method of analysis
and must not be confused with a way of selecting cases. The essential point of
the most similar system design is that the effect of an explanatory factor can be
inferred because it co-varies with the observable outcome while other potentially
relevant factors are held constant. Thus, this method relies on the values of both
the independent and the dependent variable. However, as argued above, ways of
case selection must not be based on the independent variable and the dependent
variable at the same time. Otherwise, the result of the empirical analysis would be
predetermined.
Similarity of Cases
The predetermination of empirical results can be avoided and at the same time the
comparability of cases can be guaranteed, if cases are selected due to their similarity
in respect of principal features that are relevant to the explanation of the observed
outcome. Sartori (1970: 1035–8, 1991: 245–7) argues that cases are comparable, if
they are similar in respect of characteristics that are relevant to the research question.
There is no general comparability of cases. Cases that are comparable in respect of a
certain characteristic may not be comparable in respect of other properties, and vice
versa. The similarity of cases is established by classifying empirical phenomena
into types. Phenomena of the same type share certain characteristics and differ from
phenomena of other types in these characteristics. Objects of one type are of the
same kind but may differ in the degree of the defining attribute. Entities of the same
type are similar and thus comparable because they share essential characteristics
but are not identical. A comparison is impossible, if two or more entities are either
identical or utterly different.
As already argued above, the dominant policy type in a policy area constitutes
a principal feature that establishes the comparability of policy areas in respect of
explaining the choice of policy instruments. The formulation and implementation
of policy outputs of the same policy type are characterised by a comparable extent
of political conflict. The level and type of conflict represents the overall property
that characterises the hypotheses put forward for the explanation of policy
instruments. Using the policy type as attribute in order to establish the similarity
of cases is based on this common property of the hypotheses that summarise the
existing research on policy instruments (cf. section 1.2), i.e. political conflict,
and the argument that ‘policies determine politics’ (Lowi 1972: 299, emphasis
omitted, cf. section 1.4.1). European environmental policy and European social
policy are dominated by the same policy type, namely regulatory policy. Thus,
they constitute similar cases in respect of analysing policy instruments. The two
policy areas are comparable at the principal level of policy type and political
conflict. The variance in the explanatory factors between the two cases is subject
to the empirical analysis based on the logic of the most similar system design.
A regulatory policy establishes a general rule in order to directly influence
the behaviour of individual and corporate actors. Due to the generality of the
rule, regulatory policies refer to the aggregated level of an economic sector or a
societal segment or sub-system. Nevertheless, they have an individual and specific
impact on the addressees of political steering. A regulatory policy allocates costs
and benefits and thus deprives some actors while other actors are indulged. As a
result, conflict between societal interests emerges (Lowi 1964: 690–1, 695–9).
The nature of regulatory policies is constituted by the establishment of a general
rule that directly coordinates and controls actors’ behaviour. This characterisation
does not determine the legal status of the rule, nor the agents and addressees of
political steering. General rules may be adopted either by hard law or by soft
law. Regulatory policies may seek to influence the behaviour of both businesses
and individuals as citizens or consumers. Finally, besides public authorities,
private organisations may also be the agent of political steering, if public tasks of
regulation are delegated to private organisations (Mayntz 1983: 51–2).
European Environmental Policy and European Social Policy
European environmental policy and European social policy are essentially

characterised by regulatory policies. More specifically, European environmental
policy and European social policy are characterised as social-regulatory policy
or social regulation (Majone 1993: 156–9, 168), regulatory policy of positive
integration (Knill and Lehmkuhl 2002: 256–8) and reregulatory policy or
reregulation via positive integration (Hix 2005: 251–60). These refinements take
account of multi-level governance in the EU and the cleavage between economic
and non-economic interests. Regulatory policy at the European level establishes
general rules in areas that have hitherto been in the authority of the member states
or have not been regulated at all. As its counterpart ‘negative integration’, the
term ‘positive integration’ describes a process of establishing public authorities
beyond the borders of nation states. While negative integration removes obstacles
to trade and economic competition, positive integration reconstructs economic
regulation at a higher level of governance. Measures of negative integration can
be classified as market-making. However, measures of positive integration may be
both market-making and market-correcting. On the one hand, they may harmonise
product standards and thus contribute to complete the market by removing non-
tariff barriers to trade. On the other hand, they may intervene in the market by
setting standards for environmental protection or working conditions. Thus, while
negative integration serves the economic interest of enhanced market competition,
positive integration encapsulates the cleavage between economic and non-
economic interests (Scharpf 1999: 45–6).
The characterisation of European environmental policy and European social
policy as social-regulatory policy or social regulation puts emphasis on the policy
goal and the purpose of the intervention in the economy. The goal of social
regulation is to improve the quality of life by correcting market failures. Although
the correction of market failures also contributes to a more efficient functioning
of the market, the primary aims of social regulation are non-economic, like public
health, consumer protection, social security and environmental protection. However,
by focussing on regulatory interventions, social regulation differs from traditional
social policy that provides health and welfare services, public assistance and social
insurance (Majone 1993: 156–9). Furthermore, social regulation is different from
economic regulation that aims to ensure the functioning of competitive markets
by regulating prices and shaping further conditions single enterprises face. The
distinction between economic regulation and social regulation is blurred, if

economic means are used to achieve social goals (May 2002: 157–8).
European environmental policy and European social policy are characterised
by a number of policy outputs that establish general rules in order to achieve
environmental and social objectives, respectively. Nevertheless, environmental
standards and social standards have also been introduced in order to prevent a
distortion of competition in the common market. However, the common market
could have been established as well, if standards of the member states had been
harmonised by reducing or repealing standards in those member states which
provide for higher standards of environmental protection and social safety than
other member states. In European environmental policy and European social
policy, measures have been passed in order to primarily achieve goals of social
regulation (Hix 2005: 251–60).
In European environmental policy, policy outputs have been adopted in order
to reduce noise, air and water pollution. A series of directives provide for the
regulation of chemical substances and waste disposal. Further measures are
taken to foster nature conservation and biodiversity and to protect citizens from
natural and technological hazards. It is required that the realisation of industrial
and infrastructure projects depends on an environmental impact assessment. Eco-
labels and eco-audits inform consumers of environment-friendly products, and
the European Environment Agency was set up in order to collect data and provide
information on the environment. In European social policy, the first legal acts
established social rights of migrant workers in order to allow a free movement of
workers within the member states. Several directives set rules for the protection
of health and safety at work and further working conditions. It is prescribed that
employees have to be consulted when company decisions are taken. Equal pay and
treatment of women and men in the workplace is embodied in European legislation
that further contains general provisions against discrimination. Soft law measures
have been taken in order to foster employment in the member states (Hix 2005:
251–60).
The definition of the two policy areas in this study follows the positional
approach and the reputational approach used in network analysis in order to
choose a set of actors. While the positional approach includes those actors who
occupy a certain formal position, the reputational approach is based on statements
given by actors who are informed, and ascribe certain characteristics to the actors
involved (Laumann, Marsden and Prensky 1983: 22–3). Since a policy area is
delineated by organisations engaged in the policy-making of a defined subject
matter, the positional approach and the reputational approach are applied to define
both the actors and the subject matter of the policy area. First, this study looks at
a formal institution, namely the EC Treaty, and lists which goals and functions
are ascribed to environmental policy and to social policy and which actors are
formally entitled to participate in policy-making in the two policy areas. Second,
the interviewees were asked which goal and function they attribute to European
environmental policy or European social policy. They were also asked to identify
which people and organisations were involved in the respective policy area (cf.
annex). Both procedures led to almost congruent findings. The aims, functions and
actors that constitute European environmental policy and European social policy,
are described in detail in Chapter 3 and Chapter 4, respectively.
2.3 Method, Data and Analysis
The analysis of policy instruments in the European environmental policy and

European social policy is based on qualitative data, which is in the form of
text. Data that is used for analysis includes transcribed interviews with experts,
primary texts of organisations involved in both policy areas, and scientific
secondary literature. Interviews with experts were transcribed and analysed by
qualitative content analysis. In this study, interviews with experts are the main
method of data collection, and qualitative content analysis is the main method
of data analysis. Within the scope of qualitative content analysis, primary texts
and secondary literature are taken into account as further sources of information.
The empirical analysis is guided by the theoretical framework that includes the
explanatory factors identified in section 1.4, which are derived from the literature
of political science. Therefore, only those texts of scientific secondary literature
are considered in the empirical analysis that have not been taken into account
when the theoretical framework was developed. Otherwise, there would be a
circular argumentation because sources of information that contributed to the
establishment of the theoretical framework of this study would also be used in
order to apply this framework in the empirical analysis.
Interviews with Experts
In the first place, data was collected by interviews with experts. People qualify
as experts if they hold a prominent position in a social interrelationship that
is relevant to the research question and have a special knowledge about this
interrelationship. In the interviews with experts, it is not the individual person with
their particular characteristics that is of interest, but the function they take up in a
social system and their knowledge about processes in this social system and about
the institutional and structural conditions under which these processes take place.
The purpose of these interviews is to reconstruct relations of social interaction and
the emergence of social phenomena. The responses of the interviewees are not
regarded as their personal view and motivation but as statements representative of
their organisation. Furthermore, information gained from interviews with various
experts contributes to identifying general structures of relation, rule, coordination
and control in a social system (Gläser and Laudel 2004: 9–12, Meuser and Nagel
2005). In other terms, interviews with experts contribute to identifying the process
of policy-making in a policy area and the structures specific to the policy area that
shape this process.
In order to analyse the general structures of European environmental

policy and European social policy as well as the policy process that results in
the choice of policy instruments, interviews with experts were conducted with
representatives of the crucial organisations in both policy areas. Organisations
were regarded as crucial, when textbooks and case studies identified them as
actors central to the choice of policy instruments. Furthermore, interviewees were
asked the following question: ‘Which people and organisations are involved in
European environmental/social policy?’ The answers to this question included all
organisations already identified by textbooks and case studies and did not add
any further organisation as crucial. I conducted twenty-eight interviews with
experts. Thirteen experts came from the field of European environmental policy
and fifteen experts came from European social policy. In both policy areas I spoke
to representatives of the European Commission, Permanent Representations of
member states, the European Parliament and the umbrella organisations of industrial
interest groups, namely the European Trade Union Confederation (ETUC) and the
Union of Industrial and Employers’ Confederations of Europe (UNICE), which
was renamed BusinessEurope in January 2007. Representatives of the European
Parliament comprise members of parliament, assistants of parliamentary groups
and officials of the parliamentary administration. In environmental policy I also
spoke to representatives of the umbrella organisation of environmental interest
groups, the European Environmental Bureau (EEB). The interviews were guided
by an interview guideline (Gläser and Laudel 2004: Chapter 4) constructed
on the basis of the theoretical reflection discussed in Chapter 1. The interview
guideline is reprinted in the annex. In order to make the answers to the interview
questions available to qualitative content analysis, I transcribed all the interviews
I conducted.
Qualitative Content Analysis
Qualitative content analysis is used to analyse the interview transcripts because it

allows a systematic analysis of qualitative data. In this case, qualitative methods
of analysis are not equated with the free interpretation of texts at the researcher’s
discretion (Gläser and Laudel 2004: 42–4). Central to qualitative content analysis
is the application of a system of categories, which is represented by codes. The
codes fulfil a technical function. They are used to mark passages that are relevant
to the respective category. The system of categories is derived from theoretical
reflection. Theoretical reflection identifies potential explanatory factors and their
values, which make up the system of categories. It states which sort of information
should be extracted from the interview and structures this information. The systems
of categories constitute a pattern to analyse the text. If an interview guideline
is used, as in this study, the categories follow the subjects and questions of the
interview guideline. When analysing the transcripts, the theoretically derived
system of categories is adapted to the statements of the interviewees. The adapted
system of categories includes all aspects mentioned in the interviews that are both
theoretically and empirically relevant to answer the research question (Mayring

2003: 43–5, Gläser and Laudel 2004: 43–4, Kuckartz 2004: 455–8).
In this study, qualitative content analysis is applied in the way proposed by
Mayring (2003). He identifies three main procedures of qualitative content
analysis: summary, structuring and explication. The aim of a summary is to reduce
the empirical material by using abstractions. By summarising single statements, a
manageable amount of text is created. Structuring aims at identifying a particular
structure by extracting specific aspects from the empirical material. A theory-based
system of categories is central to this procedure because the categories indicate
which parts of the text are recognised. Explication considers additional sources
of empirical data in order to clarify unclear formulations, annotate passages,
comment on the context, and widen the understanding of the object of analysis.
The three ways of interpretation are not mutually exclusive but complementary.
They can be regarded as a sequence of steps to analyse text, beginning with a
summary, proceeding with structuring, and ending with explication. In the end,
qualitative content analysis constitutes a theory-led summarising and structuring
of text that is completed and substantiated by further empirical data.
By applying qualitative content analysis, a particular structure of the empirical
data is identified (Mayring 2003: 82–3). Hence, it is abstracted from single answers
of interviewees in order to identify a structured pattern that is inherent in the
subject of analysis. Nevertheless, who made which statement and who put forth a
specific argument must be taken into consideration. The origin of a statement or an
argument shapes the identified structure. Since the basic findings of analysing the
interviews refer to structural characteristics, in this study most references to the
interviews are made in a general manner. Only in cases where which interviewee
made a statement or an argument is relevant to the argumentation, is the interviewee
referred to as a representative of their organisation. The interviewees are quoted
as representatives of their organisation because organisations are regarded as the
relevant political actors (cf. section 1.3), and the interviewees are qualified as
experts due to their affiliation to the respective organisation (cf. above). Besides
the theoretical justification, this procedure guarantees the confidentiality that was
promised to the interviewees.
Inferring Action Orientations
Content analysis of interviews and of documents published by organisations

and documents reflecting political debate constitutes a method to reconstruct the
process of policy-making. It allows inferring action orientations that are a main
component of identifying the actor constellation in a policy area (cf. section
1.4.3). An action orientation is composed of an actor’s cognition and motivation.
It includes their interest, belief and preference. However, as argued in section 1.3,
from a theoretical perspective, the real action orientation of individual actors need
not and often cannot be considered when explaining social phenomena. Moreover,
there is no method in social science to ascertain the real action orientation of
individual actors. Action orientations have to be inferred. The methodical problem

of identifying action orientations is aptly expounded by Scharpf. Therefore, the
essentially relevant passage from his writing is quoted at some length:
The major difficulty with actor-centred approaches is that they must, at bottom,
rely on intentional explanations that are inevitably based on subjectivities … It is
not in the real world but in the actor’s mental image of the world that the attribution
of causes and expected effects must be located; and actions are motivated not by
actors’ objective interests but by their subjective preferences. … Since subjective
action orientations cannot be directly observed, researchers will be tempted to
infer them from the courses of action that are in fact chosen – a temptation that
is dignified in economics by the concept of “revealed preferences.” … [I]f used
as a methodological precept in empirical policy research, it could produce only
tautologies instead of explanations. [Footnote: Observed actions are explained
by preferences that in turn are inferred from observed action.] Sometimes, in
retrospective research, it may be possible to reconstruct the effective action
orientations from contemporary documents or from a battery of interviews
with participants. However, the reliable reconstruction of subjectivities is an
extremely difficult and work-intensive task in empirical research [Vowe 1993];
hence we again try to get as far as possible with simplifying, and generally
institution-based, assumptions. (Scharpf 1997: 60)
Vowe (1993, 1997) points to methodical problems of identifying action orientations.

He argues that procedures to identify action orientations require prerequisites
that are too demanding in respect of the quality of empirical data, transparency
of individual cognition, and the capability to reflect of both political actors and
researchers. Nevertheless, action orientations can be approached, if the analysis is
led by procedural rules and based on theoretically derived hypotheses. Qualitative
content analysis represents such a procedure that sheds light on the interest, belief and
preference of political actors. In a further article, Vowe (1994) argues that an actor’s
action orientation cannot be reduced to interests and beliefs. Rather, a cognitive
pattern is essential to the action orientation of political actors. A cognitive pattern
has three dimensions: causal, social and temporal. A causal pattern represents causes
political actors ascribe to events and effects they attribute to political alternatives.
A social pattern is the result of a process in which actors construct interpretations
of common concerns and expectations in respect of interacting with other actors.
By a temporal pattern political actors identify sequences of the political process.
However, the conception of cognitive patterns does not mitigate the problem of
identifying action orientations. On the contrary, it increases complexity by adding
cognitive aspects to the motivation of political actors.
The cognitive dimension of political actors in respect of decision-making
and its analysis are already discussed by Axelrod (1976). He argues that political
actors decide on the basis of cognitive maps in order to cope with the complexity
of societal conditions under which decisions are taken. They represent the beliefs
of actors about causal relationships between political measures and their effects
as well as the values that should be realised by those measures. In technical
expressions, cognitive maps consist of concepts and variables and causal links
between these concepts and variables. The concepts and variables are represented
by policy alternatives, the goals that are reached by choosing a certain alternative,
and the utility that is associated with achieving the policy goal. A cognitive map
accounts for the assertions of a person in respect of a particular policy area but not
for their actual thoughts. Political actors often are not aware that they act on the
basis of a cognitive map. Like action orientation, the actual cognitive map cannot
be observed but has to be inferred from statements of the actors in documents,
interviews and surveys (Axelrod 1976: 10). Since the real cognition and thoughts
of individual people are not analysed, cognitive maps can also be attributed to
collective and corporate actors like organisations and even nation states.
The cognition of political actors also has an essential role in the advocacy
coalition framework (cf. section 1.3). The cognition is conceptualised as the belief
system of actors, which is defined as ‘a set of basic values, causal assumptions,
and problem perceptions’ (Sabatier 1993: 25). Both in the methodical reflection
(Jenkins-Smith and Sabatier 1993: 240) and in the empirical application
(Mawhinney 1993: 60) of the advocacy coalition framework, the content analysis
of texts composed by political actors is regarded as the appropriate method to infer
the belief system of political actors.
Actors and their action orientations are relevant to the explanation of policy
instruments insofar as they constitute the actor constellation of a policy area.
Interests, beliefs and resources of actors as well as their cooperation, coordination
and competition with other actors shape the specific value of an actor constellation.
This conception of political actors is not restricted by the argument that cognitive
and behavioural aspects of political actors have to be taken into account when
analysing the choice of policy instruments (Linder and Peters 1989, Schneider
and Ingram 1990). However, the postulate of including individual actors into the
analysis does not solve the problem of increasing the complexity of a theory (cf.
section 1.3), nor does it solve the methodical problem of ascertaining the action
orientation of individual actors (cf. above). In this study, actors are not neglected.
However, political actors are not conceived as individual people but as aggregated
actors, namely organisations, and their action orientations are inferred from texts
composed by these actors. In the two following chapters, the theory, concept and
method discussed in Chapter 1 and Chapter 2 are applied in order to analyse the
choice of policy instruments in European environmental policy and European
social policy. The following chapter deals with European environmental policy.
Chapter 3
European Environmental Policy
European environmental policy aims to protect the natural environment, to

improve its quality and to prevent pollution. The protection of the environment
encompasses progress towards clean air, soil and water, as well as conservation
of habitats of animals and plants. Furthermore, it includes a prudent utilisation
and exploitation of natural resources, the protection of human health and the
preservation of quality of life. This scope of functions is stated alike from both
environmental legal requirements in the EC Treaty and political actors involved
in the process of policy-making in European environmental policy. In order to
achieve the broad scope of objectives a multitude of legal acts have been adopted
at the European level. Measures of European environmental policy set both
emission and quality standards in environmental sectors like air and water. These
sectoral environmental standards are complemented by procedural provisions and
provisions of integrated environmental protection. Procedural provisions refer to
the construction and operation of factories. Provisions of integrated environmental
protection look at the environment as a whole and aim to prevent that pollution
is relocated from one environmental sector to another. Further measures lower
environmental risk and protect from dangerous substances and activities. Finally,
European environmental policy makes arrangements for waste management and
the utilisation of natural resources (Beutler et al. 2001: 678–81).
Negative Externalities, Transboundary Pollution and the Common Market
Environmental policy encompasses market-correcting measures (cf. section 2.2).

From an economic perspective, environmental policy as an area of responsibility
of public authorities is legitimised due to market failure, which results from
negative externalities. Externalities emerge when production or consumption of
a good affects other producers or consumers and these effects are not included in
the price of that good. Pollution of the natural environment is caused by industrial
production and individual consumption. Negative externalities occur, if the
costs of pollution are not reflected in the price of the good that is produced and
consumed. If effluent from a factory is dumped into a river, diminished quality of
bathing water, offensive smell or dead fish induce societal costs. If the firm is not
charged for these damages, the price of its product understates the societal costs
of production. In order to deal with negative externalities in environmental policy,
it is essential that the natural environment is characterised as a common good.
Common goods are characterised by free access and rivalry of consumption. On
the one hand, nobody can be excluded from using environmental goods. On the
other hand, consumption of an environmental good restricts further consumption

of that good, which results in a shortage of the good. Both characteristics exist
simultaneously because property right of environmental goods are not clearly
defined and cannot be enforced. Free access to environmental goods, like clean air,
water and landscape, prevents the development of a market price, which reflects
the shortage of the good. As a consequence, the market is not able to prevent
that natural resources, clean air and water are exploited and consumed more
extensively than they are provided. An excess of consumption and exploitation of
environmental goods is expressed in environmental pollution. Therefore a superior
authority is necessary, which is able to intervene in the market in order to protect
the environment (Kirchgässner 1994, Holzinger and Knill 2003b: 233–6).
In the EU, the economic perspective prevails in order to justify market-correcting
measures of environmental policy (Lee 2005: 2). However, negative externalities
of the market justify environmental policy at the national and at the European level
alike. There are mainly two reasons why environmental problems are also tackled
at the European level. First, environmental pollution is often transboundary.
Contamination of rivers is not relieved, if water flows over national borders. Tall
chimneys may ease local air pollution but disperse harmful substances to other
areas and countries. Transboundary measures are also necessary in the realm of
nature conservation. The protection of natural habitats and migratory species, like
birds, crosses the territory of nation states. Some environmental problems, like
climate change, are even global in scale. In order to address global environmental
problems, the EU fosters activities of environmental protection in international
organisations. Second, different levels of environmental protection standards
between member states may result in distortion of competition and decrease in
environmental protection standards. In member states with low environmental
standards, enterprises are able to produce at lower costs than enterprises in
member states with high environmental standards and therefore gain a competitive
advantage within the common market. As a consequence, governments of other
member states may in turn lower their legal requirements for environmental
protection in order to attract enterprises to produce and invest in their country
(Lee 2005: 9–12). This process that results in a downward spiral of environmental
standards is described as a so-called race to the bottom. In contrast, different levels
of regulatory standards may also result in a so-called race to the top. A race to the
top occurs when environmental standards spiral upwards because high regulatory
standards in one member state force other member states to follow suit (Vogel
1995, Scharpf 1999: Chapter 3).
Objectives, Strategies and Principles
European environmental policy aims to prevent a race to the bottom and establish a high
and even level of environmental protection in the EU. Since 1973, objectives, strategies
and priority areas of European environmental policy are stated in Environmental
Action Programmes. At the Paris summit in 1972, the heads of state and government
European Environmental Policy 75
called on the political institutions of the EU to develop an Action Programme on

the environment, which was adopted in the following year. The Action Programmes
did not entail legally binding provisions but political declarations and conceptual
reflection. From the first to the fourth, Environmental Action Programmes rejected
the notion that economic growth was an end in itself and focused on environmental
protection in order to prevent market distortion and preserve quality of life. The
focus changed in the Fifth Environmental Action Programme in two respects. First,
general strategic approaches and principles of coordination and political steering
replaced recommendations for tackling concrete environmental problems. Second,
environmental preservation became an independent goal. It became detached from
issues of the common market and quality of life and emphasis is put on sustainable
development. This notion continues in the Sixth Environmental Action Programme,
which, in 2002, was the first Action Programme that was adopted in the form of a
legally binding decision of the European Parliament and the Council (Weale et al.
2000: 56–62, Knill 2003: 48–52).
The strategic approaches advocated in the Fifth and the Sixth Environment
Action Programme refer to general aspects of political steering and participation
of the actors concerned. In order to meet environmental objectives, they advocate
that environmental legislation should be further developed and implementation
and enforcement of existing legislation should be improved. Moreover, a blend of
policy instruments should be applied, especially market-based instruments should
be fostered and the collaboration with private actors like enterprises, consumers and
organisations of civil society should be improved. Also public bodies, especially
in the financial sector and the area of land use, should take environmental concerns
into account. Furthermore, the Action Programmes are committed to principles of
EU environmental action that are also based on Article 174 (2) of the EC Treaty:
the polluter-pays principle, the precautionary principle, the prevention principle
and the principle of rectification of pollution at source. Lawyers are in dispute
whether these principles constitute general guidelines of European environmental
policy or binding rules of law. Anyway, these principles are general in nature and
lack further specification in the Treaty. Concrete environmental measures cannot
be deduced unambiguously from these principles (Krämer 2003: 13–26). Further
principles of European environmental policy are sustainable development and
integration of environmental concerns into other policy areas.
Although objectives, justifications and principles of European environmental
policy can be clearly identified, there are areas that overlap with other policy areas.
This overlap is not least reflected by the legal basis of environmental provisions.
Generally, any relevant Article of the EC Treaty may provide a legal basis for an
environmental measure. If environmental measures affect the common market,
they can be based on Article 95 of the EC Treaty. Further policy areas also provide
a legal basis for environmental measures, namely agriculture (Art. 34 TEC),
transport (Art. 71, 80 TEC) and indirect taxes (Art. 93 TEC). In contrast, the legal
basis for independent environmental provisions (Art. 175 TEC) also mentions
town and country planning and energy supply (Beutler et al. 2001: 670–1, Krämer
2003: 5–7). Furthermore, two concepts, which have been already mentioned, stated
in the EC Treaty manifest the overlap between European environmental policy
and other policy areas: sustainable development (Art. 2 TEC) and environmental
policy integration (Art. 6 TEC).
Sustainable development refers to a way of meeting the needs of the present
generation without restricting future generations to meet their needs as well.
Sustainable development rests on three pillars. It recognises that economic
growth, social welfare and environmental protection are interlinked and mutually
reinforcing. According to this perspective, environmental protection and social
equity are necessary to ensure future economic prosperity. In return, economic
growth respects the environment and provides means to maintain social welfare.
Environmental protection alleviates social inequalities that emerge due to an uneven
dispersion of the effects of nuisances and pollution. Measures of environmental
protection are required to be cost-effective and, hence, do not put an excessive
burden on industry. All in all, this perspective reconciles economic, social and
environmental concerns (Commission of the European Communities 2001c). The
concept of sustainable development gains its attraction from the reconciliation
of economic, social and environmental concerns, three areas that may otherwise
be regarded as competing. Therefore, on the one hand, the notion of sustainable
development facilitates political consensus by enabling political actors to pursue
socially accepted values at rather low financial and political cost. On the other hand,
the notion of sustainable development addresses the tension between economic
growth, social welfare and environmental protection and creates the opportunity
to balance development in the three areas and contribute to a situation from which
actors with different interests benefit (Lee 2005: 24–35).
Environmental policy integration (EPI) constitutes a central principle to
implement sustainable development. EPI is about considering environmental issues
in other policy areas. In contrast to the ‘more nebulous concept of SD [sustainable
development]’ (European Environment Agency 2005a: 10), EPI provides means
to achieve sustainable development in practice by ensuring that environmental
objectives are considered and implemented in other sectoral policies. There are
various means of integration. EPI enhances coordination between organisations
of different policy areas. It fosters cross-sectoral policy strategies and supports
consultation and information exchange between members of environmental
organisations and members of organisations of other policy areas. Sectoral
departments are supposed to add environmental units to their organisational
structure. Environmental concerns are also integrated into internal administrative
processes in public administrations and private companies. Monitoring processes
in policy areas like agriculture, energy or transport recognise environmental issues
when they establish indicators to monitor the development of sectoral policies.
Finally, budgeting, financing and funding are contingent on compliance with
environmental objectives (European Environment Agency 2005b). As sustainable
development, also EPI reconciles environmental protection, social equity and
economic growth. Thus, it enables general consensus among actors who otherwise
do not share common interests. However, albeit advocating procedures that are
based on deliberation, mutual learning and consensus seeking, EPI does not
remove short-term costs that create redistributive effects and conflict between
actors. There are economic limits to the integration of environmental protection
into other policy areas (Lenschow 2002: 30–4).
The following section 3.1 displays the development of policy instruments
in European environmental policy. It is shown that command and control
instruments represent the main type of governance instruments. Legal instruments
are dominated by hard law, mainly directives. Section 3.2 describes the actor
constellations in the policy area. European environmental policy is characterised
by a horizontal cleavage between environmental protection and the economic
growth and a vertical cleavage between the European level and the national level.
Both cleavages are reflected by the preferences for policy instruments of the
organisations constituting the policy area. The opportunity of these organisations
to transpose their preferences into European policy outputs is shaped by
institutions, described in section 3.3. Co-decision is the main legislative procedure
in European environmental policy. It provides several veto points and constitutes
the Commission, the European Parliament and the Council of Ministers as veto
players. Whether the veto players make use of their opportunity to prevent the
adoption of European legislation depends on the politicisation of the respective
environmental policy problem. In section 3.4, the politicisation of policy problems
is discussed. Cost and conflict involved in policy problems result in a high level
of politicisation. In contrast, the level of politicisation is low, if actors agree on the
suitability of policy instruments for solving policy problems. Section 3.5 deals with
external events. Environmental disasters, decisions by international organisations
and developments in other policy areas create conditions that both encourage and
hinder the adoption of a certain type of policy instruments. Finally, section 3.6
points to the close connection between the characteristics of policy instruments
and the cleavage structure of the policy area. By showing this relationship, the
stages of policy formulation and policy implementation are connected.
Policy instruments of European environmental policy are those instruments that

are applied in order to achieve the objectives of European environmental policy.
Environmental policy instruments aim to prevent pollution and to protect and
improve the quality of the natural environment. All types of policy instruments
described in section 1.1 are at the disposal of political actors in environmental
policy. However, as the interviews with experts and empirical studies reveal
alike, European environmental policy is dominated by command and control
governance instruments and legal instruments of hard law, mainly directives.
Both types of policy instruments have an affinity with each other. Command and
control instruments as well as hard law exert a great degree of coercion on the
addressees of political steering who do not share the political objective pursued
by the policy output. In contrast, suasive instruments adopted by soft law rely on
voluntary compliance by both the addresses in the member states and the member
states themselves. In recent years, there have been efforts to provide the ultimate
addressees of political steering with more incentives and persuasion and to give
member states more leeway in implementing policy outputs. These efforts were to
a large extent subject to the political debate. However, only to a minor extent, they
resulted in the adoption of economic and suasive instruments and in an increase
of soft law. Although command and control instruments and hard law frequently
coincide, the adoption of economic and suasive instruments in the form of hard law
shows that governance instruments and legal instruments can be freely combined.
Table 3.1 shows examples of policy instruments in European environmental policy.
The occurrence of governance instruments and legal instruments are described in
the remainder of this section.
Table 3.1 Examples of Policy Instruments in European Environmental

Policy
Bathing Water Emission Trading Eco-Label
Directive Directive Regulation
Hard Law Waste Incineration LIFE EMAS Regulation
Legal Directive
Instruments Voluntary
Agreement on
Soft Law
Minimum Recycling
Rates for Paper
In order to coordinate and control the ultimate addressees of political steering

in the member states the EU makes wide use of governance instruments of the
command and control type. Any number of European legal acts were adopted
that apply command and control instruments in various environmental issue areas
by setting technology-oriented emission standard, ambient quality standards and
input standard for dangerous substances (Rehbinder and Stewart 1985: 214–26).
Although the Commission has increasingly advocated economic and suasive
instruments in the Environmental Action Programmes, command and control
instruments are still predominant in European environmental policy (Holzinger,
Knill and Schäfer 2003, Rittberger and Richardson 2003, Holzinger, Knill and
Schäfer 2006). In the Third Environmental Action Programme, which referred to
the period between 1982 and 1986, economic instruments were proposed for the
first time in European environmental policy. The subsequent action programmes
put further emphasis on economic and suasive instruments. However, despite

increasing emphasis on economic and suasive instruments and decreasing attention
on command and control instruments, the latter were still regarded as relevant to
tackle environmental problems. Holzinger, Knill and Schäfer as well as Rittberger
and Richardson observe that programmatic ideas shifted but have not resulted in a
considerable change in policy instruments adopted at the EU level.
On the basis of ‘The Manual of Environmental Policy’ edited by Nigel Haigh,
Holzinger, Knill and Schäfer (2003: 116–20, 2006: 410–13) analyse EU legal acts
in environmental policy from 1967 to 2000. Although they identify an increase in
economic and suasive instruments in relation to command and control instruments,
command and control instruments still made up almost 80 per cent of all European
environmental measures in 2000, when the Fifth Environmental Action Programme
ended. Suasive and economic instruments are responsible for the remaining share.
There are more suasive than economic measures. Rittberger and Richardson (2003:
586–97) look at legislative proposals of the Commission in three environmental
issue areas, namely water, waste and atmospheric pollution, between 1994 and
2000. They use the Celex-database as data source and arrive at the same observation
as Holzinger, Knill and Schäfer. In the issue area of water, command and control
instruments are predominant. Most proposals provide for water quality standards
and emission limits for dangerous substances. Some proposals leave member states
room to use other policy instruments, and only the proposal for the water framework
directive (COM/97/49) explicitly refers to economic instruments. A similar use of
governance instruments applies to the issue areas of waste and atmospheric pollution.
Although economic and suasive instruments figure more prominently, command and
control instruments are again predominant.
Nevertheless, there had been isolated examples of using economic instruments
like the directive on the disposal of waste oils (75/439/EEC). The directive
prescribes the process of collecting and disposing of waste oils but allows
member states to subsidise the collection, combustion and regeneration and
to finance the subsidy by levying a charge on waste oil. Further directives like
the packaging and packaging waste directive (94/62/EC), the water framework
directive (2000/60/EC) and the directive on energy products taxation (2003/96/
EC) provide for the application of market-based instruments. However, the trading
scheme for greenhouse gas emissions establishes by the emission trading directive
(2003/87/EC) represents the first economic governance instrument introduced at
the European level. The introduction of environmental taxes at the EU level had
been discussed from time to time in the political debate but was abandoned due
to the resistance of member states. A further economic instrument is established
in the EU by the environmental liability directive (2004/35/EC), which realises
the polluter-pays-principle by making the polluter responsible for restoring and
compensating environmental damages. Finally, there are EU subsidies and project
funding in order to enhance environmental protection. The programme of the
Financial Instrument for the Environment (LIFE) supports nature conservation
and environmental policy integration and the Cohesion Fund does not only support
infrastructure in the poorer member states but also environmental projects in these
countries (European Environment Agency 2006).
As economic instruments, suasive instruments are rare in relation to command
and control instruments in European environmental policy. Suasive governance
instruments are voluntary agreements, eco-labels and environmental management
systems. In voluntary agreements the addressees of political steering agree on
aiming at certain targets or pursuing certain procedural guidelines in order to
prevent pollution and protect the environment. Economic associations, NGOs
and other organised groups may engage in self-regulation and co-regulation.
In self-regulation the societal actors regulate their activities autonomously.
The resulting agreement may be acknowledged by an exchange of letters by
the Commission or by a recommendation. There are voluntary agreements by
industry on the reduction of carbon dioxide emissions of new passenger cars,
on the production and disposal of PVC and on minimum recycling rates for
paper. In contrast, co-regulation involves legislative actors, particularly the
Commission, and the result is adopted in a legislative act. Also eco-labels and
environmental management systems are subject to EU legislation. The later
revised regulation (EEC) no. 880/92 introduced the Community eco-label
award scheme that promotes environmental-friendly products by providing
information to consumers. The regulation (EEC) no. 761/2001 replaced an
earlier regulation from 1993 that provided for an eco-management and audit
scheme (EMAS). Organisations may voluntarily participate in EMAS. In order
to register for EMAS, they have to adhere to the environmental management
system for internal processes, products and services, and regularly carry out
environmental audits. If the EMAS registration is validated, the organisation is
allowed to use the EMAS logo in order to inform the public of its environmental
friendly production and products (Jordan, Wurzel and Zito 2005: 481–9).
Legal Instruments
Any number of the governance instruments described above is adopted by

legislation. Directives are the most frequently used legal instrument in European
environmental policy. Hard law is the dominant form of coordinating and controlling
environmental policy of the member states, whereas soft law is applied rarely in
relation to regulations and directives. Nevertheless, in recent years elements of
soft law has increasingly included in legislation and the Commission has made
less proposals for new directives and regulations (Pallemaerts 1999). Furthermore,
recommendations, resolutions and opinions influence the political debate about
how to achieve political goals. However, there has been substantial legislative
activity in European environmental policy. Depending on the data source, the
inclusion of different kinds of legal acts and the definition of environmental
policy, up to around 500 environmental policy measures are identified at the
European level. However, the large number also involves decisions that refer
to single member states or citizens, amendments and specifications of existing
legislation, and measures from other policy areas, like agriculture or transport, that
also affect the natural environment. If these policy outputs are subtracted from the
overall number, the number of major environmental legal acts is roughly halved.
Albeit the figures of major legal acts presented in the literature still vary to a great
extent, they all show a general pattern. The environmental acquis has increased
continuously since the establishment of European environmental policy, but in
recent years the adoption of amendments of existing legislations has increased to a
larger extent than the adoption of new regulations and directives (Jordan, Brouwer
and Noble 1999: 381–4).
The lasting dominance of hard law in European environmental policy is also
confirmed by counting the environmental policy outputs recorded in the Celex-
database and the Eur-Lex-database. Both Celex and Eur-Lex use the same database
and the same classification but the procedure involves methodical problems. The
databases may not cover all policy outputs of environmental policy on the one
hand, but may mistakenly include policy outputs of other policy areas on the
other. Furthermore, it has to be kept in mind that the number of policy outputs
is not synonymous with their scope of regulation and their relevance to political
steering in the policy area. Despite these limitations, the quantitative relation
between hard law and soft law covered by Celex and Eur-Lex shows a clear
pattern of legal instruments in European environmental policy. From 1970 to
2006, 168 directives and regulations had been adopted continuously. Legal acts
adopted by the Commission alone are excluded because they do not represent
policy measures of their own but specify application rules or amend existing
legislation in order to take account of scientific or technical progress (Krämer
2003: 49–50). Further 111 directives and regulations had been passed that amend
or geographically expand existing legal acts. In contrast, 75 non-binding policy
outputs of soft law had been passed by the Council and the Commission, namely
conclusions, declarations, recommendations and resolutions. The definition of
policy outputs that entered into the counting does not favour hard law and the
data has to be interpreted cautiously due to methodical problems. However,
the policy outputs recorded by Celex and Eur-Lex show that hard law is the
dominant legal instrument in European environmental policy, whereas soft law
plays a minor role. Developments in recent years has not changed the overall
pattern as is indicated by Figure 3.1 that displays the ratio of hard law to soft law
in European environmental policy.
3.2 Cleavage Structure of Actor Constellations
Policy instruments of European environmental policy are adopted by actors who

have to interact with other actors in order to tackle environmental problems and pass
measures that aim at protecting the natural environment and preventing pollution.
A number of organisations engage in policy-making at the European level in order
to struggle for shaping environmental policy outputs. These organisations constitute
the policy area and the structured relations between these organisations characterise
Figure 3.1 Ratio of Hard Law to Soft Law in European Environmental

Policy
Source: Celex/Eur-Lex
European environmental policy (cf. section 2.1). The pattern of interrelationship

between these organisations is synonymous with the actor constellation in the
policy area. Moreover, diverging interests and beliefs of political actors and their
preferences for a certain type of policy instruments produce the cleavage structure of
actor constellations in European environmental policy (cf. section 1.4.3).
The organisations that constitute European environmental policy are identified
by the interviewees and authors of empirical studies alike. Both the interviewees
and the authors of empirical studies (Holzinger 1994: 84–135, Weale et al.
2000: 86–107, Wurzel 2002: 59–74, Bailey 2003: 18–26) identify the following
organisations as actors relevant to adopting policy instruments of European
environmental policy: the European Commission, the European Parliament, the
Council of the European Union and interest groups. Relevant interest groups are
environmental NGOs organised at the European level under the umbrella of the EEB
and employers’ associations represented in the EU by the umbrella organisation
UNICE/BusinessEurope. Furthermore, the EC Treaty provides the Economic and
Social Committee and the Committee of the Regions with a consultative role in the
legislative process. However, the main relevance of the two organisations to policy-
making in European environmental policy was not reported in the interviews. In
environmental policy, the Economic and Social Committee and the Committee of
the Regions ‘have not yet reached the point of having any significant influence on
the content of Community directives and regulations’ (Krämer 2003: 44).
The organisations involved in the adoption of policy instruments in European
environmental policy are highly aggregated entities. They comprise organisations
that fulfil different functions, pursue different ideological beliefs, and are rooted in
different nation states. The Directorate General (DG) Environment is one of several
functionally divided DGs that make up the European Commission. The European
Parliament is constituted by different political parties that represent the spectrum
of ideological beliefs. The Council encompasses the national governments of
the member states. The EEB and UNICE/BusinessEurope represent national
environmental NGOs and national employers’ associations, respectively. The
cleavage structure of European environmental policy is revealed both at the level
of the highly aggregated organisations and at the lower level of their member
organisations. However, despite the internal diversity, the organisations involved
in environmental policy-making agree on a common policy position, respectively,
on the use of policy instruments, as the description of the organisations’ preferences
shall show below.
Environmental Protection vs. Economic Growth and European Level vs. National
Level
Two cleavages shape the actor constellation in European environmental policy. There
is a horizontal cleavage between environmental protection and economic growth and
a vertical cleavage between the European level and the national level. The horizontal
cleavage between the policy goals of environmental protection and economic
growth runs between organisations that seek to protect the natural environment on
the one hand and organisations that seek to ensure the competitiveness of industry
on the other. The two ends of the spectrum of interests and beliefs are constituted
by environmental NGOs and employers’ associations, respectively. Environmental
groups also acknowledge the production of wealth by businesses but argue that
economic growth must not have negative effects on the natural environment
(European Environmental Bureau 2007b). Vice versa, industrial groups also
approve of environmental protection but argue that environmental protection must
not threaten the competitiveness of enterprises (UNICE 2001). The horizontal
cleavage corresponds to the cleavage between left-wing and right-wing political
parties. While left-wing parties demand environmental protection, right-wing parties
support industry.
Lenschow and Zito (1998: 415–17) identify three so-called policy frames
that address the relationship between market harmonisation and environmental
protection during the evolution of European environmental policy. Policy frames
are cognitive patterns that structure the complex reality political actors face.
Policy frames define policy problems, show linkages between societal phenomena,
and determine and justify the scope and means of political steering. The three
frames that have shaped European environmental policy are named conditional
environmental policy, classic environmental policy and sustainability. Initially,
European environmental policy was dominated by the conditional environmental
policy frame. In accordance with this frame, regulatory measures are only intended
to remove barriers to trade. Environmental goals are regarded as subordinate
to the objective of market harmonisation. Command and control legislation is

the preferred policy instrument because it provides for a uniform application
of market-making rules across the member states. In the mid-1980s the classic
environmental policy frame emerged. It acknowledges environmental protection as
an independent policy goal. Environmental and economic objectives are regarded
as equally important. If environmental and economic interests are in conflict, a
compromise has to be reached. Market failures justify public intervention into the
economy in order to prevent environmental pollution.
Finally, since the 1990s the sustainability frame has gained momentum.
Environmental protection and economic growth are no longer regarded as separate
goals but as mutually dependent. It is argued that environmental protection
constitutes a precondition for long-term economic development and that, vice
versa, economic growth provides resources for environmental protection. The
market is accepted as a form of coordination and control, if societal costs of
environmental pollution are internalised into market prices of products (Lenschow
and Zito 1998: 417). All organisations of the policy area in principle agree that both
environmental protection and economic growth are desirable policy goals. They
approve of the concept of sustainable development (Commission of the European
Communities 2001c, 2001b, UNICE 2001, European Parliament/Council 2002,
European Environmental Bureau 2006a). Nevertheless, the organisations disagree
both in respect of the level of environmental protection and the policy instruments
that should be used. The two aspects are independent from each other. Each policy
instrument can be applied in order to implement either a high or a low level of
environmental protection. The level of environmental protection is relevant to the
analysis of policy instruments insofar as it affects costs and benefits for both the
agents and the addressees of political steering.
As far as the vertical cleavage between the European level and the national
level is concerned, there are only few environmental issues that are in principle
contested between the EU organisations and the nation states. A prominent example
is taxation. Taxes on carbon and energy were widely debated in policy-making at
the European level although taxation intervenes in national competences of the
member states and thus provoked a high level of conflict (Zito 2000: 88–118).
The issue of environmental taxation has been set on the political agenda from
time to time. The Commission (1997b, 2001d) issued two communications on tax
coordination and tax policy in the EU. In 2003 the Council directive 2003/96/EC
was adopted, which restructured the framework for taxes on energy. The directive
sets minimum rates of taxation for fuel and electricity but gives member states
much leeway to arrange their national eco-taxes. Due to the required unanimous
decision in the Council, the directive does not put considerable pressure on national
tax levels (Oberthür and Tänzler 2006: 300). Fiscal provisions are subject to
unanimity because they affect the core of national sovereignty (Krämer 2003: 82).
Member states have been reluctant to allow qualified majority voting for decisions
on taxation. Several interviewees confirmed that, regardless of the political
alignment, the governments of member states do not want to establish eco-taxes at
the European level, because they regard taxation as a domain of national politics.
The Commission (2001d: 20–1) complains about this lack of political will that,
in conjunction with the decision rule of unanimity, prevents European eco-taxes.
Nevertheless, the Commission (2007: 4–7) acknowledges that member states
decide on designing incentives and disincentives in their tax system.
The cleavage referring to the allocation of authority between EU organisations
and the nation states is not only reflected by the question whether a policy-problem
should be tackled at the European level or at the national level, but also by the
question to which extent the EU and the member states should be involved in a
policy issue. The second question addresses the choice of legal instruments. While
hard law legally binds member states to comply with European provisions, soft
law allows member states to deviate from European arrangements without facing
legal sanctions. Hence, directives and regulations give priority to the EU, whereas
recommendations, resolutions and thematic strategies in the form of Commission
communications give priority to the nation states. Regulations, directives, and
soft law, respectively, aim at a different degree of harmonising member states’
policies.
Representatives of member states argued in the interviews that regulations
are the appropriate legal instrument if a policy output aims at standardisation
of member states’ policies, or if concrete technical issues should be regulated.
However, in most areas of European environmental policy, directives are regarded
as the appropriate legal instrument because it applies to all member states in an
equal manner, but grants flexibility to member states, for example if minimal
standards are adopted by EU directives, member states are free to adopt higher
standards at the national level. This argumentation in favour of hard law applies to
the choice of legal instruments regardless of the governance instrument entailed in
an legal act. Member states favour hard law if they have an interest in harmonising
member states’ policies or in adopting certain policy outputs at the European level.
They do not promote European hard law if national interests are at risk, as the
example of taxation has shown.
The cleavage structure in European environmental policy does not only exist
at the level of the political institutions of the EU and the umbrella organisations of
interest groups. Also within these organisations the cleavage between pursued policy
goals and between applied policy instruments occurs, as both the interviews with
experts and empirical studies of political science reveal. Within the Commission
DG Environment pursues more environment-friendly policies while DG Enterprise
and Industry pursues policies that are more favourable to industry. Within the
European Parliament, the greens are close to the environmental NGOs while
the conservatives and Christian democrats tent to the position of the employers’
associations. The social democrats and socialists as well as the liberals take up a
middle position between environmental protection and economic competitiveness
(McElroy and Benoit 2007: 11–14). However, several interviewees described the
members of the environmental committee of the European Parliament as more
environment-friendly than their colleagues of the respective party. Since the
policy positions of the Commission and the European Parliament also depend on
the actors who constitute the organisation, the appointment of Commissioners
and parliamentary elections may change the political alignment of the respective
organisation.
The same applies to the Council of the European Union whose policy position
results from aggregating the positions of democratically elected governments
of the member states. Within the Council member states that put forward an
environment-friendly agenda, face member states that seek to foster the economic
development. Besides advocating environmental protection as an independent
policy objective, member states may call for environmental standards at the EU
level for economic reasons. Member states that already have high environmental
standards at the national level may seek to harmonise the provisions at the European
level in order to prevent competitive advantages of businesses from member states
that have lower environmental standards. The Nordic countries, the Netherlands,
Austria and Germany have been identified as those countries which promote
environmental protection in the EU. However, these countries do not constitute a
constant coalition in the Council nor do they still push for environmental standards
to the same extent. Member states agree in respect of specific issues but not in
respect of overall policy goals and former pioneers of environmental policy have
abandoned their position while other member states have caught up (Andersen and
Liefferink 1997, Börzel 2003).
Finally, the cleavage between environmental protection and economic growth
occurs within industry, as interviewees reported. On the one hand, there are
businesses that call for a minimum of political steering in environmental policy in
order to reduce production costs and enhance competitiveness. On the other hand,
there are enterprises that consider a high level of environmental protection as a
competitive advantage because they already use environment-friendly technology
in the production process or they produce environment-friendly technology. Those
enterprises have the lead in economic competition, if high environmental standards
are adopted by legislation. Thus, enterprises that use or produce environment-
friendly technology share a common interest with environmental organisations. In
contrast, UNICE is oriented towards those enterprises that are afraid of competitive
disadvantages, if the level of environmental standards is raised.
Organisations’ Preferences for Policy Instruments
Despite the differences in policy positions between member organisations, both the
horizontal and the vertical cleavage are reflected by the organisations’ preferences for
policy instruments at the general level of the political institutions of the EU and the
umbrella organisations of interest groups. The European Commission, the European
Parliament and the Council of the EU promote a mix of policy instruments, that is,
the use of different policy instruments for different purposes and the use of several
policy instruments in conjunction in order to achieve a policy goal. The European
Commission focuses on the effectiveness of policy instruments. It is argued that
existing legal acts should be implemented more effectively and that command and
control legislation should be complemented by economic and suasive instruments
and by soft law in order to make European provisions more effective. The European
Parliament acknowledges the limits of command and control legislation but
emphasises that suasive instruments and soft law must neither restrict the scope of
legislative action nor constitute an alternative to legislation. The Council also agrees
with using a mix of policy instruments in order to effectively reach policy goals.
However, in contrast to the Parliament, the Council does not necessarily support
European legislation but stresses the political nature of decision-making in the EU,
which may result in either hard law or soft law.
The EEB and UNICE/BusinessEurope take opposite positions. The EEB prefers
command and control instruments and hard law in order to establish environmental
standards that are legally binding. In contrast, UNICE favours suasive instruments
and soft law in order to reduce regulatory constraints on industry. Under certain
conditions, both the EEB and UNICE support economic instruments. However,
the EEB argues that economic instruments should be applied in conjunction with
a legal framework and, thus, welcomes eco-taxes. In contrast, UNICE supports
economic instruments, only if they do not constrain industry. Hence, UNICE
opposes eco-taxes. The organisations’ preferences for policy instruments are
described in more detail in the remainder of this section.
The preferences of the European Commission for a certain type of policy
instruments in environmental policy are embedded in general reflections on
European governance and better regulation. They are in accordance with the
principle of subsidiarity (Commission of the European Communities 2001a,
2002a). In the Sixth Environment Action Programme, the Commission (2001b)
states the plea for using the whole range of policy instruments. The effectiveness
of command and control legislation should be enhanced by using infringement
procedures to remove inadequate implementation in the member states and by
providing information to expose the implementation performance of member states
and to exchange experiences and best-practice on the implementation of European
legislation. However, besides setting minimum standards for environmental
protection, both economic instruments and suasive instruments should additionally
be applied in order to effectively implement environmental objectives.
The Commission (2007) argues, that economic instruments have the advantage
of being cost-effective and flexible. Economic instruments are supposed to reduce
the costs of environmental protection. They lower compliance costs by granting
flexibility to enterprises in meeting environmental objectives and provide incentives
for enterprises to pursue technological innovation that improve environmental
protection. Nevertheless, economic instruments have to be embedded in a legal
framework in order to correct market-failure, which results in damaging the natural
environment. The Commission (2002b) further argues that voluntary agreements
may achieve goals of European environmental policy, if they are used together
with other policy instruments, particularly if they are applied in conjunction with
legislation. While voluntary self-regulation only encourages those enterprises that
have agreed to achieve an environmental objective, co-regulation combines the

advantages of voluntary agreements with the binding force of legislation. Voluntary
agreements are supposed to enable tailor-made solutions to policy problems
because they actively involve industry and thus reduce the costs of compliance
and accelerate the process of implementation.
The Commission combines judicial measures and information measures in order
to achieve an effective implementation of European environmental legislation. EU
regulations and directives are the heart of this procedure. However, in the Sixth
Environment Action Programme the Commission (2001b) also promotes soft law
measures to achieve environmental protection in the member states. Thematic
strategies in seven areas of environmental policy put forward long-term objectives and
overall policy approaches. While the thematic strategies on air, waste and pesticides
revise existing legislation, the other thematic strategies refer to environmental policy
problems that are not addresses by European legislation. The thematic strategies
are related to hard law insofar as they provide for simplifying existing legislation
by merging related legal acts and removing overlaps between directives. Moreover,
they may entail proposals for further legislation. Nevertheless, the thematic strategies
themselves are soft law that is adopted in the form of Commission communications
and does not have any legally binding effect on the member states (Commission of
the European Communities 2005a).
As the Commission, the European Parliament acknowledges the limits of both
command and control instruments and legislation, and considers other policy
instruments as useful alternatives and complements. However, the European
Parliament (2006d) emphasises that policy objectives laid down in the Treaties
should in principle be pursued by legislation. Co-regulation and self-regulation
may be applied in order to improve the effectiveness of legislation or to broaden
the scope of regulatory activities. Soft law and suasive instruments must not
be used in order to bypass EU institutions nor to restrict the competence of the
Commission or the Parliament. The European Parliament (2003a, 2003b) follows
the argumentation in the Sixth Environment Action Programme that environmental
policy problems cannot be solved sufficiently by solely adopting command and
control legislation because environmental pollution is the result of manifold
activities of consumption and production, which limit the capacity of hierarchical
policy instruments for effective coordination and control. A voluntary agreement
may enhance the effectiveness of achieving environmental objectives but
legislation has to remain the primary policy instrument of European environmental
policy. If voluntary agreements are adopted, the European Parliament prefers co-
regulation to self-regulation because co-regulation includes a legislative process
that guarantees transparency and involves the Commission and the Parliament in
setting the objectives. In accordance with the criteria formulated by the Commission
(2002b), the European Parliament (2003a, 2003b) demands several prerequisites
for the adoption of voluntary agreements.
The Council of the European Union (2004, 2005a) agrees with the European
Commission and the European Parliament that a mix of policy instruments is best
suited to achieve environmental policy goals, although it put more emphasis on

the political nature of legislative decisions than the Commission and less emphasis
on the need for legislation than the European Parliament. The Council supports
the efforts for better regulation in order to effectively achieve environmental
objectives. It acknowledges that impact assessments, consultations of stakeholders,
simplifications of legislation and procedures of monitoring, reporting and review
enhance the effectiveness of coordination and control by hierarchical policy
instruments. Nevertheless, these measures and procedures do not constitute a
substitute for political decision in the legislative process. Economic governance
instruments are regarded as a suitable means to protect the environment and
simultaneously ensure the competitiveness of industry in the member states. In
order to internalise negative externalities into product prices the Council promotes
fiscal incentives for consumers and producers as well as the reform of subsidies that
have a harmful effect on the natural environment. Finally, the Council considers
both suasive instruments and soft law as a contribution to better regulation.
While at the general level of the organisation the European Parliament,
the Council of the European Union and the European Commission agree in
several policy positions in respect of the application of policy instruments,
the European umbrella organisation of environmental NGOs, the EEB, on the
one hand, and the European umbrella organisation of employers’ associations,
UNICE/BusinessEurope, on the other, take up policy positions opposite to each
other. Industry groups prefer economic and suasive governance instruments
because they are supposed to relieve regulatory constraints and reduce costs of
compliance. In contrast, environmental groups doubt the effectiveness of policy
instruments that do not establish legally binding standards for environmental
protection. Environmental NGOs acknowledge implementation problems of
command and control instruments but argue that neither economic nor suasive
instruments are better suited to protect the environment. They argue that binding
standards have to be set because market mechanisms do not necessarily result
in a desirable level of environmental protection. Nevertheless, environmental
NGOs support economic instruments, if they are embedded in a robust legal
framework. They welcome eco-taxes as a means of implementing the polluter-
pays principle and encouraging environmental friendly behaviour of consumers
and producers. Also emission trading and environmental liability are considered
as suitable governance instruments, if the observance of environmental standards
and the implementation of the instruments are guaranteed. Environmental groups
are least favourable towards suasive instruments. They are indifferent to eco-
labels and EMAS and consider voluntary agreements as mere window-dressing
(Bomberg 2007: 250–4).
The European Environmental Bureau (2003) criticises the Commission
(2002b) for their approach to voluntary agreements. While co-regulation provides
a minimum of legal certainty, self-regulation does not bind the addressees of
political steering. Thus, the EEB argues that by promoting self-regulation,
the Commission abandons its right to initiate legislation, bypasses European
legislators, and leaves the pursuit of the common interest of environmental

protection to the discretion of private actors. The EEB agrees with the European
Parliament that voluntary agreements should never be used as a substitute for
legislation. If voluntary agreements are adopted, they should be combined with
legislation. The only function the EEB ascribes to voluntary agreements is to
agree on environmental standards that are higher than those prescribed by existing
hard law, if industry in a certain sector seeks to go further than current standards.
In contrast to suasive instruments, the European Environmental Bureau (2007a)
advocates the application of economic instruments. The EEB addresses the
Council to further economic instruments in order to implement the polluter-pays
principle and to internalise external costs of environmental pollution into market
prices of products. In particular, the EEB supports eco-taxes. If eco-taxes cannot
be adopted by European legislation, because that requires a unanimous vote in the
Council, the EEB supports other legal instruments to foster eco-taxes. It calls on
the Council Presidency to use the OMC in order to set targets for the development
of eco-taxes in the member states.
UNICE/BusinessEurope (UNICE 2001, 2002, BusinessEurope 2007) demands
the use of policy instruments that allow businesses a flexible implementation and
reduce the costs for industry. Hence, the employers’ association rejects command
and control instruments. They are regarded as too rigid and thus both costly for
industry and not capable of effectively achieving environmental objectives. It is
argued that by using command and control instruments, the natural environment
cannot be protected efficiently. Therefore, BusinessEurope (2007) welcomes the
discussion about economic instruments, launched by the Commission’s (2007)
green paper on market-based instruments. However, despite the commitment to
the market and the general statements in favour of market-based instruments,
the employers’ association opposes environmental taxes and criticises emission
trading. As command and control instruments, eco-taxes are supposed to be
not efficient because the tax level required to achieve a certain environmental
goal is often too high. Furthermore, eco-taxes are considered as a threat to the
competitiveness of businesses. If environmental taxes are fostered in the EU, the
competitiveness of European enterprises in the global market is at stake.
As far as the emission trading scheme of the EU is concerned BusinessEurope
(2007) also criticises the costs for industry and a lack of efficiency. It is argued that in
member states that have national CO2 taxes, emission trading poses additional costs
on businesses. Any combined use of governance instruments should be avoided.
The employers’ association stresses that only transboundary environmental policy
problems should be tackled at the European level. The problem of greenhouse
gas emissions is transboundary in nature but should better be tackled at the
global level because EU environmental standards threaten the competitiveness of
European industry. Voluntary agreements are the preferred policy instrument of
UNICE (2002) because they are supposed to have the potential to be efficient, be
implemented quickly and motivate business. The primary goal of the employers’
association is to enhance the competitiveness of industry. It is argued that any
cost put on industry weakens its competitiveness and, as a result, reduces public
revenue and increases prices for consumers. Thus, scope and intensity of political
steering should be as narrow and low as possible because ‘[e]nvironmental policy
instruments, market based or not, will, in general, not promote competitiveness’
(BusinessEurope 2007: 3).
3.3 Institutions
Diverging preferences for policy instruments between the organisations involved

in European environmental policy constitute cleavages between national and
European interests and between environmental and economic beliefs, as the
previous section has shown. Whether political actors succeed in transferring their
preferences to public policy outputs is affected by institutions. Institutions shape
the power relation between the actors of a policy area. Institutions are conceived
as boundary rules and decision rules. Boundary rules delineate the scope of issues
that are dealt with and determine the actors involved in policy-making. Decision
rules determine who is allowed to make and prevent decisions at a certain stage
in the policy-making process (cf. section 1.4.2). In European environmental
policy the EC Treaty, formerly the Treaty establishing the European Economic
Community (EEC), represents formal institutions of the policy area. At present,
the EC Treaty provides for the same scope of environmental policy at the
European level as environmental policy has in the member states. There is not a
domain of environmental policy that is exclusive to either national or Community
competence (Krämer 2003: 94–5). Both boundary rules and decision rules changed
since the signing of the Treaties of Rome in 1957. The European Commission, the
European Parliament and the Council of the EU formally take part in decision-
making. Furthermore, environmental and economic interest groups may influence
policy-making in European environmental policy. The power relation between
these actors changed over time as both boundary rules and decision rules have
been subject to change.
Extension of Competences and Qualified Majority Voting
When the EEC Treaty and the Treaty establishing the European Atomic Energy
Community (Euratom) were signed in 1957, they did not provide for any explicit
environmental measures at the European level. However, the following decades
witnessed an extension of competences and qualified majority voting. It was not
until the early 1970s that environmental protection was set on the political agenda
of the EU. In 1972, a year after the Commission had launched a communication
on environmental issues, the heads of state and government decided at the summit
in Paris to develop a common environmental policy. This decision established
environmental protection as an objective of the EEC Treaty. In the following year,
the Council adopted in a declaration the First Environmental Action Programme,
which formulated general goals and principles. Environmental pollution should
be removed and precautionary measures should be taken. However, legal acts

to protect the environment could only be adopted, if they contributed to the
completion of the internal market. Articles 100 and 235 of the EEC Treaty (now
Articles 94 and 308 of the EC Treaty) provided a legal basis for those measures.
In 1987, the Single European Act introduced an explicit legal basis in the EEC
Treaty for legislation of environmental policy. Thus, the EEC Treaty allowed for
legal acts that pursue environmental protection as a policy goal independent from
the functioning of the internal market (Glaesner 1988).
Prior to the Single European Act, legal acts of European environmental
policy could only be adopted, if they were relevant to the completion of the
internal marked and were passed by unanimity in the Council of Ministers. The
Single European Act changed the decision rule in the Council of Ministers from
unanimity to qualified majority voting for those legislative decisions that affect
the internal market. Moreover, it extended the participation of the European
Parliament in the decision-making process. If the Parliament changes or rejects a
Council position in second reading and the Commission supports the Parliament
decision, the Council may overrule the Parliament decision only by unanimity
while it could accept it by qualified majority. However, legal acts, which pursue
environmental protection as an independent objective and were thus based on
the newly introduced Articles 130r to 130t of the EEC Treaty, still required a
unanimous vote in the Council of Ministers and provided only a consultative role
of the European Parliament. In 1993, the Treaty of Maastricht introduced qualified
majority voting in the Council also for decisions of primarily environmental
concern. The Treaty of Amsterdam, which came into force in 1999, strengthened
the role of the European Parliament by establishing the co-decision procedure.
The co-decision procedure provides for qualified majority voting in the Council
and gives veto power to the European Parliament. In all legislative procedures
the Commission has the monopoly on initiating legal action (Knill 2003: 30–1,
35–6, 119–22).
Co-Decision Procedure
The distinction between environmental measures that contribute to the completion

of the internal market and policy outputs that primarily improve the quality of
the environment is blurred. This had been a legal problem. However, the blurred
distinction between the two types of legal acts became less important because
the introduction of the co-decision procedure eliminated the main differences
between the legislative procedures associated with the two types of environmental
measures. ‘The co-decision procedure is the normal procedure for decisions in
environmental matters.’ (Krämer 2003: 72) It is based on Article 175 (1) of the EC
Treaty since the EC Treaty had been consolidated and renumbered by the Treaty
of Amsterdam (Krämer 2003: 72–88).
The co-decision procedure starts with a legislative proposal of the Commission,
which is submitted to the European Parliament and the Council. The Council
may amend the Commission’s proposal only by unanimity. After the European
Parliament gave its opinion, the Council may adopt the legal act by qualified
majority voting, if it approves the Parliament’s amendments contained in its opinion
or if the Parliament does not suggest any amendments. Otherwise, the Council
establishes a common position. If the Parliament approves the common position
or does not decide in a second reading, the legal act is adopted. The legislative
proposal has failed, if the absolute majority of the Members of Parliament rejects
the common position. In the second reading, the absolute majority of Members of
Parliament may also propose amendments to the Council’s common position. If
the Commission accepts the Parliament’s amendments, the Council may adopt the
legal act by qualified majority voting. However, if the Commission makes further
amendments, the Council have to vote unanimously in order to pass the proposal.
If the Council does not agree to all amendments, a Conciliation Committee is
established. If the Conciliation Committee does not reach a compromise, the
legislative proposal is rejected. However, if the Conciliation Committee succeeds
in formulating a joint text, this texts requires the approval of an absolute majority
in the Parliament and an qualified majority in the Council in order to be adopted as
a legal act (Krämer 2003: 71–2).
Legal acts of European environmental policy are mainly based on Article 175
(1) of the EC Treaty but may also have another legal basis (cf. section 3). The
legal basis of a legislative act determines the decision-making procedure, and
particularly the role of the European Parliament. Article 175 (2) of the EC Treaty
provides five exceptions of applying the co-decision procedure in environmental
policy. The European Parliament has only a consultative role and the Council
has to decide unanimously, if policy outputs refer to fiscal provisions, town and
country planning, the quantitative management and availability of water resources,
land use not including waste management, or the choice of energy sources
and the general structure of energy supply in the member states. Furthermore,
environmental measures may be based on a legal basis related to another policy
area. As far as agricultural matters are concerned, the European Parliament is only
consulted and the Council decides by qualified majority voting. The Council also
applies qualified majority voting to decisions on commercial matters in which
the European Parliament does not participate at all. However, if environmental
measures are primarily concerned with transport or the internal market, the co-
decision procedure is also applied (Krämer 2003: 80–91).
The co-decision procedure provides for several veto points. The Commission,
the European Parliament and the Council of Ministers represent veto players (cf.
section 1.4.2). If the Commission does not initiate a legal act, a legislative process
does not commence. The European Parliament may prevent the adoption of a legal
act by an absolute majority of its members. Also a number of member states may
block a legal act. The characterisation as veto players changes, if other decision-
making procedures are applied. The European Parliament does not represent a veto
player, if it has only a consultative role or does not participate in the legislative
process. In contrast, each member state constitutes a veto player, if decisions in
the Council require unanimity. Hence, the number of veto players is lowest, if
environmental measures are based on legal provision that refer to agricultural
or commercial matters because, the Parliament does not participate in decision-
making and the Council decides by qualified majority voting. Nevertheless, as
shown above, in most cases of environmental policy legislation, the Commission,
the European Parliament and a coalition of member states may use veto points in
order to block a legal act.
In addition to the these formal veto players constituted by the legislative
procedure laid down in the EC Treaty, interest groups are informally involved
in policy-making. Their main influence occurs, when the Commission drafts a
legislative proposal. The Commission exchanges information with interest
groups and uses expertise provided by interest groups. To a certain degree, the
Commission relies on this expertise. Thus, interest groups have the opportunity
to guide the Commission’s proposal in a certain direction. Providing expertise is
particularly influential insofar as supposedly minor technical questions may turn
out to have more far reaching implications than initially expected. Based on the
observation of multiple veto players and the involvement of interest groups in the
decision-making process, Weale (1996) argues that policy-making in European
environmental policy is characterised by, what he calls, a system of concurrent
majorities, that is, a number of actors have to approve a policy measure in order
to adopt a policy output. The system of concurrent majorities encompasses
both vertical relations between the EU and the member states and horizontal
relations between the organisations at the European level. Weale (1996: 607)
concludes that European environmental policy outputs are the aggregated result
of accommodating national interests and ideological beliefs under the condition
of multiple veto points.
3.4 Politicisation of Environmental Policy Problems
Whether opposing national interests and ideological beliefs become decisive and
whether political actors use veto points in order to prevent policy decisions depend
to a large extent on the politicisation of environmental policy problems. Policy
problems are the result of the interdependence of political actors. A problem
becomes a policy problem, if an actor is not capable of reaching their objective
by themselves. There is a high politicisation of policy problems, if actors depend
on each other but pursue opposing national interests and ideological beliefs when
struggling for political power and searching for solutions to policy problems. Vice
versa, there is a low politicisation of policy problems, if political actors, who may
otherwise have different interests and beliefs, agree about the nature of a policy
problem and the way of its solution. Highly politicised policy problems are a
source of political conflict. Environmental policy problems become politicised,
if they involve both actors who gain and actors who loose from either changing
or conserving the state of regulation. In contrast, the level of conflict is low, if the
politicisation of policy problems is low because the actors involved benefit from
reaching a common policy output (cf. section 1.4.2).
The politicisation of policy problems in European environmental policy
essentially depends on two characteristics: the nature of environmental protection
as a common good (cf. section 1.4.2 and section 3) and the dominance of regulatory
policy in European environmental policy (cf. section 2.2). Both characteristics
create costs and relative (dis-)advantages for various actors and thus result in
conflict. Due to the nature of environmental protection as a common good, actors
who damage the natural environment by, for example, emitting pollutants into air
or water, also benefit from a clean environment. These actors would have to bear
the costs of environmental protection if regulatory policies establish emission limit
values. Thus, within a jurisdiction, there is a cleavage between those consumers
and producers who pollute the environment and would have to bear the costs
of regulatory policies on the one hand and the public who benefits as a whole
from a clean environment on the other. Moreover, if environmental pollution is
transboundary, like the emission of greenhouse gases or the pollution of rivers,
the cleavage emerges between countries, if there are different national standards
of environmental protection. The country with lower environmental standards
is supposed to benefit on the expense of the country with higher environmental
standards by overly exploiting environmental resources. Again, regulatory policies
of positive integration mandatory in both countries create costs for those actors
who have to reduce environmental pollution. Moreover, relative (dis-)advantage
does not only result from different environmental standards. Further developed
industries using new technologies are supposed to comply more easily with
environmental standards. These industries also gain a competitive advantage, if
high environmental standards are obligatory in all jurisdictions of the common
market (Héritier 1999: 51–2).
Finally, conflict may emerge as a result of the distribution of competence and
the regulatory approach both reflected by policy instruments. While European
legislation gives power to political institutions of the EU, soft law leaves the
main competence within member states. Command and control instruments
and, to a lesser extent, economic instruments confront producers and consumers
with environmental standards they have to meet, while suasive instruments do
not put material costs on the addressees of political steering. Thus, depending on
the policy instrument applied, the same emission limit value or environmental
quality standard result in a different distribution of competence and costs among
the actors involved. Regulatory policies of positive integration also create costs
for member states, if national regulatory approaches have to be adapted in order
to comply with European provisions. A prominent example of different regulatory
approaches was recognised in clean air policy. In this issue area, the regulatory
approach of setting emission limits by command and control instruments based on
the so-called best available technology in order to prevent air pollution at source is
contrasted with the regulatory approach of establishing procedural rules in order to
control the effects on ambient air quality. Germany is mentioned as an example of
the source-based approach, while the United Kingdom is mentioned as an example

of the effect-based approach (Héritier 1999: 52).
However, the comparison between the two regulatory approaches may
overestimate the potential for conflict. Already in the 1970s, most member states
pursued a source-based approach of environmental regulation. Only the United
Kingdom had a predominantly effect-based regulatory approach. Ireland and
France partly used quality standards in environmental policy. As a consequence
of European environmental regulation, the United Kingdom, Ireland and
France moved towards a more source-based approach. Vice versa, in European
environmental policy also quality standards for air and water were adopted. Quality
standards provided by European directives disrupted the source-based approach in
countries that used to rely on emission limits, like Germany or Sweden. As far
as policy instruments are concerned, a convergence took place as well. Although
member states introduced economic instruments and suasive instruments, in the
2000s environmental policy in the member states rely mainly on command and
control legislation (Jordan and Liefferink 2004: 224–6, Liefferink and Jordan
2004: 36–8).
Cost and Conflict
Several interviewees who represent the European Commission, member states

and the administration of the European Parliament reported that the higher the
costs are member states face due to European regulation, the higher the level of
conflict is when the policy outputs are negotiated. In particular, conflict emerges, if
other nation states or other businesses do not have to comply with those regulatory
standards that cause the costs of environmental protection. In this context, several
interviewees, including representatives of member states, pointed to the binding
nature of legislation. They argued that legislation is necessary, if policy objectives
create costs for member states and have to be implemented against their resistance.
Costs and political conflict result from the political salience of an issue in the
member states as well as from expenditure and regulatory activity a European
measure requires in the member states. Costs may arise both for member states and
for industry in the member states, as two directives mentioned in the interviews
illustrate. The environmental liability directive (2004/35/EC) causes regulatory
costs for the member states because it intervenes in existing national civil law,
whereas the directive on packaging and packaging waste (94/62/EC) creates costs
for industry that has to comply with recovery and recycling rates.
A case in point is the regulatory framework for the registration, evaluation
and authorisation of chemicals (REACH). REACH was established by the
regulation (EC) no. 1907/2006. In addition, directive 2006/121/EC adapted
existing rules of classifying, packaging and labelling hazardous substances as
well as their notification to the competent authority in the respective member state
to the REACH system. Altogether, the REACH system replaces more than 40
regulations and directives of the EU. Registration is the key element of REACH.
Any chemical, which is manufactured in the member states or imported to the

European common market in quantities of more than one tonne per annum, has to
be registered in a central database. The process of registration is managed by the
European Chemicals Agency, which was also set up by the REACH regulation.
When registering chemical substances, producers and importers are obliged to
provide information on the properties and uses of the substances as well as on the
precautionary measures to be taken when using them. The previous distinction
between substances already on the market and substances newly placed on the
market is abandoned. The European Chemical Agency is also engaged in the
process of evaluation in order to make sure that industry fulfils its obligation.
Some substances are excluded from the regulation, like polymers, certain
naturally occurring substances and substances with negligible risk. However, the
regulation lists substances of a very high concern that require authorisation by
the Commission. The Commission grants authorisation for particular uses, if the
manufacturer or importer is able to assure, that the risk arising from the respective
substance may be managed appropriately. At any stage of the REACH system, the
burden of proving that chemicals are safe rests on industry.
When REACH was negotiated, conflict emerged that reflected the cleavage
between economic growth and environmental protection. Actors representing
industry interests opposed chemical regulation, whereas actors representing
environment interests supported the regulation of chemical substances (Pesendorfer
2006, Lindgren and Persson 2008). Pesendorfer (2006) argues that policy-making
was shaped by two advocacy coalitions (cf. section 1.3). On the one hand, a coalition
that pursued the interests of industry was composed of the chemical industry, DG
Enterprise, business-friendly members of the European Parliament and member
states with a large chemical industry, namely France, Germany, Ireland, Italy and
the United Kingdom. The business-friendly policy of these member states was
primarily advocated by the national ministries of economic affairs. On the other
hand, there was a coalition that pursued environmental objectives. It consisted
of environmental NGOs, DG Environment, environment-friendly members of the
European Parliament and environment ministries and agencies of member states
that advocated a high level of environmental protection, namely Austria, Denmark,
Finland, Sweden and the Netherlands. In particular, Sweden had already adopted
an ambitious national regulation of hazardous substances and advocated such
activities also at the European level.
The conflict between the two advocacy coalitions revolved around the
interpretation of the precautionary principle. The industry coalition argued that the
precautionary principle must not be overstretched because this would create high
costs for industry that again endanger economic competitiveness. A high level of
chemical regulation would not solve environmental problems but result in a shift of
production from Europe to other regions. As a consequence, the industry coalition
favoured suasive instruments and soft law in order to reduce the regulatory burden
on industry. In contrast, the environment coalition argued that the precautionary
principle should be strengthened in chemical regulation. Chemicals should not be
allowed to be placed on the market unless data is provided that prove the respective
chemicals to be safe. The environment coalition considered the argument of costs
for industry as exaggerated. Instead, they argued that a high level of chemical
regulation would enhance competitiveness and increase innovation by creating
new markets for companies that employ cleaner production processes or produce
cleaner products (Pesendorfer 2006).
In a case study based on an electronic online survey including 651 actors,
who had been involved in the policy formulation of REACH, Lindgren and
Persson (2008) confirm that the political conflict was shaped by interests and
beliefs, which were opposed in respect of the level of regulation considered
appropriate. However, they refine Pesendorfer’s finding by arguing that the
actor constellation is more diverse than the opposition of environmentalists and
industrialists suggests. In between the two opposing advocacy coalitions, there
are actors representing consumer interests and actors representing workers’
interests. Consumers, on the one hand, are concerned about the environment,
but, on the other hand, also favour economic competition in order to lower
product prices and enhance the quality of products. In a similar vein, workers,
on the one hand, welcome the regulation of hazardous substances in the working
environment, but, on the other hand, worry about competitive disadvantages that
result in a reduction of employment.
At other occasions, the argument that environmental regulation may result
in a competitive disadvantage is also raised in respect of the global level. A
representative of UNICE argued in the interview that policy instruments for
environmental protection should be applied at the global level because of world-
wide trade relations. Environmental regulation at the European level is supposed
to result in competitive disadvantages for European industry. European enterprises
should not lag behind in the global market as a consequence of complying
with environmental standards that are higher than in countries outside the EU.
Moreover, many environmental problems are regarded as global problems and
should therefore be tackled at the global level. In particular, this argument applies
to the regulation to combat climate change. American businesses do not face the
same limitations as European businesses do since the government of the USA did
not sign the Kyoto Protocol. When in 1997 the national governments negotiated
the protocol on climate change at the Kyoto summit, obligation and inclusion of
nation states was on the agenda. Besides other objectives, the government of the
USA demanded that developing countries also have to participate in emission
reductions to a meaningful extent. The failure of the US negotiating team to
achieve this objective constituted a main argument for the Senate not to ratify the
Kyoto Protocol. The EU claimed an international leadership in combating climate
change but also sought to protect the competitiveness of European industry. As a
consequence, the EU preferred emission cuts mandatory to countries (Damro and
Méndes 2005: 258–61).
Conflict between political actors also emerges despite a general agreement on
policy goals. Members of European political institutions as well as environmental
and business organisations acknowledge clean air as a general environmental

objective. However, the agreement vanishes, if decisions have to be made on how
these objectives should be achieved. The combustion plant directive was recast by
a new directive (2001/80/EC) for the purpose of clarification. When the original
directive on the limitations of emissions of certain pollutants into the air from
large combustion plants (88/609/EEC) was negotiated, there was a high level of
conflict among the member states. The directive aims to reduce emissions of sulphur
dioxide, nitrogen oxides and particulate matter from combustion plants whose rated
thermal inputs are equal to or greater than 50 MW. A main source of conflict was the
interest of the respective national industry. Germany, Denmark and the Netherlands
supported the original proposal of the directive. In these countries large combustion
plants emitted less than 70 per cent of sulphur dioxide emissions. France and
Belgium were also able to meet the emission targets due to their reliance on nuclear
energy. In contrast, United Kingdom and Italy were large emitters. Thus, industry
feared a competitive disadvantage form the reduction targets. Spain, Portugal,
Greece and Ireland were worried that emission limits may hamper the development
of their national economies. Further conflict stemmed from disagreement with the
certainty of the scientific approach on which the proposed provisions were based. In
particular, the United Kingdom questioned the assumption that large cuts in sulphur
dioxide emissions contributes to effectively and efficiently solving the problem of
acidification. Finally, different national regulatory approaches collided. The collision
is symbolised by the German regulatory approach on the one hand and the British on
the other. While Germany favoured uniform emission limits in order to reduce air
pollution, the United Kingdom preferred environmental quality standards (Weale et
al. 2000: 386–94).
There are also policy problems that are characterised by a low level of
politicisation. In this case, conflict between political actors involved in negotiating
a policy output is low. There are issues whose value is widely acknowledged. This
may not only refer to general objectives of environmental protection but also to
more specific issues. Representatives of member states reported that conflict was
low, when the directive on energy end-use efficiency and energy services (2006/32/
EC) was negotiated. The aim of the directive is to improve energy end-use efficiency
and to enhance the potential of cost-effective energy savings in the member states.
Furthermore, the directive aims to reduce member states’ dependence on energy
imports and to boost innovativeness and competitiveness of European businesses.
A consensus between political actors has emerged that resource efficiency and
eco-innovations create new opportunities in international markets and enhance the
competitiveness of European enterprises (Krämer 2006: 488).
As derived from the interviews with experts, a policy measure is supposed to
be widely supported, if their benefit for the environment is unquestioned and costs
to implement the measure are low. If the benefit is questioned or the costs are high,
the adoption of policy measures in the form of soft law reduces the level of conflict
because it lessens the effects of the measures. Furthermore, the level of conflict is
low, if common positions already exist. The further development of existing common
standards does not result in major conflict, nor do member states question a common
position that has already been pursued by the EU in international negotiations of
environmental policy. Finally, interviewees reported that conflict is low, if issues are
technical in nature and possible policy solutions can be assessed in respect of their
problem-solving capacity. Technical questions, for example, are values in emission
registers and information required for regulation.
Suitability of Policy Instruments for Solving Policy Problems
The argument that conflict is low due to the technical nature of a policy issue is
also raised in respect of policy instruments. Regardless of general preferences for
certain policy instruments (cf. section 3.2), interviewees from various organisations
argued that the policy instruments available in European environmental policy
figuratively constitute a toolbox. Depending on the nature of the policy problem, a
different policy instrument is regarded as suitable for solving the policy problem.
Hence, choosing means to achieve ends depends on the suitability of policy
instruments for solving policy problems. From this perspective, the choice of
policy instruments follows the substantive political debate about policy objectives
and regulatory approaches. If a policy objective and a regulatory approach are
approved or a compromise is reached in the political debate, the choice of the
policy instrument is not subject to political struggle but a mere technical action.
As officials of the European Parliament reported, argumentation about the choice
of policy instruments has not been part of parliamentary debates. The decision
on which policy instrument is applied is already made by the Commission in its
proposal and not questioned in the following legislative process. A certain policy
instrument is considered to fulfil a specific function.
Command and control legislation is widely used, if environmental policy
problems are measurable and accessible to scientific analysis like in the issue areas
of air pollution control, waste management and water protection. In each of the
three issue areas, any number of European legal acts has been adopted (Knill and
Liefferink 2007: 48–51). European directives lay down air quality standards for
several substances. Limit values are established for arsenic, benzene, cadmium,
carbon monoxide, dust, lead, mercury, nickel, nitrogen oxides, ozone, polycyclic
aromatic hydrocarbons and sulphur dioxide. Emission limits are stipulated for
large combustions plants, waste incineration, passenger cars and further types of
vehicles. Pollutants contained in fuels are regulated and national emission ceilings
for ammonia, nitrogen oxide, sulphur dioxide and volatile organic compounds
are stipulated. In the issue area of waste management, several directives establish
measurable quantities of limit values and quality standards in order to protect the
environment from different kinds of waste. The use of sewage sludge in agriculture,
for example, is regulated by laying down both limit values and quality standards
for heavy metals. The waste incineration directive stipulates air emission limit
values and emission limit values for discharges of waste water from the cleaning
of exhaust gases. Limit values concern heavy metals, dioxins and furans, carbon
monoxide, dust, total organic carbon, hydrogen chloride, hydrogen fluoride, sulphur
dioxide, nitrogen monoxide and nitrogen dioxide. In order to reduce the amount
of hazardous substances dumped in the environment, the directive 2006/66/EC
sets minimum percentages for the recycling of spent batteries and accumulators
and prohibits batteries and accumulators containing more than a certain quantity
of mercury and cadmium.
As far as water protection is concerned, a number of directives define
parameters, provide limit values, and lay down methods of measurement and
the frequency of sampling in order to guarantee the quality of different kinds
of water, like groundwater, surface water and bathing water. The directive on
bathing water (76/169/EEC) establishes chemical, microbiological and physical
parameters for assessing the quality of bathing water and lays down mandatory
limit values. Furthermore, the directive stipulates the method of analysing the
quality of bathing water and a minimum frequency of samples. The directive was
replaced by a new directive (2006/7/EC). The new directive greatly reduces the
number of parameters but still stipulates quality values, the way of assessing the
quality of water and the frequency of sampling intervals. A revision of the original
bathing water directive became necessary in order to ensure consistency with other
European policy outputs referring to water protection, to simplify the regulatory
process, to enhance participation of the public and to take scientific developments
into account. However, scientific evidence was subject to disputes. Already in
1994, the Commission put forth a proposal for revising the original bathing water
directive. As Wurzel (2002: 243–51) points out, scientific dispute was the main
factor accounting for the slowness of the revision process. A number of scientific
studies initiated by nation states, the EU and the World Health Organisation
(WHO) disagreed about main issues relevant to the regulation of bathing water.
They disagreed about whether sewage contaminated water constitutes a health
risk to bathers, about the suitability of indicator organisms used for identifying
health risks and environmental pollution, about the reliability and comparability
of sampling methods and analytical methods, and about monitoring, remedial and
precautionary actions, which may be taken in order to ensure compliance with the
bathing water standards.
Sadeleer (2006: 140–6) argues, in connection with the precautionary
principle, that environmental policy is one of the policy areas that most heavily
rely on scientific evidence. Scientific methods of analysis and measurement
identify environmental problems. Environmental problems are perceived and
described through scientific lenses. Nevertheless, environmental problems also
involve scientific uncertainty. In order to meet scientific uncertainty, European
environmental law provides the precautionary principle. The precautionary
principle states that preventive measures may be taken, if there is a risk of damage
to human health or the natural environment even if there is no scientific certainty
about the cause and the occurrence of the damage. The precautionary principle
gives precedence to human health and the natural environment over economic
interests and, thus, gives reasons for a high level of environmental protection.
The precautionary principle endorses a broad interpretation of a number of

environmental obligations. However, due to scientific uncertainty, this broad
interpretation allows academic debate and political contest. A case in point is waste
management. The question whether waste is regarded as a tradable commodity or
as an environmental matter has been subject to an extensive academic debate. The
answer to the question also reflects the tension between economic market integration
and environmental protection and, thus, divides political actors. On the one hand,
there are actors who consider waste disposal and recycling as a business and focus
on market distorting effects of national regulations of waste and packaging waste.
On the other hand, there are actors who regard waste as an environmental issue
and point to waste accumulation and resulting environmental problems in respect of
landfill and incineration (Zito 2000: 126, Sadeleer 2006: 145).
Although solutions to environmental problems are frequently based on
scientific evidence, political conflict may emerge because scientific evidence
is uncertain. Moreover, scientific evidence does not remove the costs of
environmental protection nor does it justify a policy objective. Actors may
contest an environmental measure because they do not agree with the scientific
evidence, but they may also question the scientific evidence because they have
to bear the costs of the environmental measure. When the directive on packaging
and packaging waste (94/62/EC) was negotiated, a coalition of member states
in the Council of Ministers opposed several provisions in the proposal of the
directive. These member states worried about disadvantages for their national
economy and questioned the scientific justification of the level of the proposed
recovery and recycling targets (Bailey 2003: 57–66). Furthermore, even if a
policy instrument is commonly regarded as suitable for achieving a certain
policy objective, actors may reject the policy instrument because they oppose the
objective that is supposed to be achieved by this instrument. Thus, environmental
policy problems and policy instruments may be subject to political conflict
despite their relation to scientific evidence.
Cost and Conflict of a policy measure and the suitability of a policy instrument
for solving a policy problem may overlap. Several European directives establish
water quality standards, which are accessible to scientific analysis and measurement.
However, the water framework directive (2000/60/EC) was adopted at the end of
a contentious legislative process. Conflict emerged because the directive affects
the regulation of resource use in the member states, which is an economically
sensitive issue. The directive also contains the common implementation strategy
that represents an element of soft law within the directive. It aims to avoid diverging
interpretations of the legal text and to enhance the coordination between the
European Commission and the member states in order to prevent implementation
failures. The common implementation strategy constitutes a policy instrument that
is suitable for enhancing the effectiveness of implementing the water framework
directive (Homeyer 2007: 50–2, 55–7).
In order to enhance the effectiveness of implementation, soft law is suggested
as a possible way, if it is not prevented by the politicisation of a policy problem.
Soft law may back the implementation of existing legislation by providing

information and guidance. In particular, thematic strategies may supplement
current legislation. Thematic strategies are also regarded as suitable in areas that
lack experience of tackling environmental problems, in order to develop concepts
of problem-solving. Subsequently, a thematic strategy may result in the adoption of
directives or regulations. The Sixth Environment Action Programme (Commission
of the European Communities 2001b) provides for the adoption of seven thematic
strategies. On 21 September 2005 the Commission adopted the first of seven
thematic strategies, which covers air pollution (COM(2005) 446 final). Despite
existing legislation and significant improvements, air pollution is still regarded as
a major environmental policy problem, which results in damaging human health
and the natural environment. The thematic strategy on air pollution sets targets for
emission reduction that should be reached by 2020. It sets the targets to reduce
sulphur dioxide emissions by 82 per cent, nitrogen oxide emissions by 60 per
cent, volatile organic compounds by 51 per cent, ammonia by 27 per cent and fine
particulate matter by 59 per cent compared to their emission levels in the year
2000. Besides setting reduction targets, the thematic strategy aim to revise and
simplify the existing legislation on air quality and to integrate the concern of air
pollution into other policy areas, like agriculture, energy and transport.
Both the European Environmental Bureau (2006b) and the European Parliament
(2006e) welcome the thematic strategy insofar as it acknowledges air pollution
as a major policy problem and provides measures for protecting ambient air.
However, both organisations criticise that the thematic strategy does not specify
the means by which the objectives put forward by the Sixth Environmental Action
Programme can be reached. They further criticise, that the reduction targets are not
ambitious enough in order to effectively prevent air pollution. Finally, they regret
that the thematic strategy does not require further legal provisions. In summary,
the European Environmental Bureau and the European Parliament question the
suitability of the thematic strategy for preventing air pollution. Skjaerseth (2000:
65–7) argues that target values put forward by suasive instruments and soft law
may effectively solve environmental problems only if the addressees of political
steering do not have to bear the costs of achieving the target values and there is a
low level of conflict within the policy area.
3.5 External Events
As institutions and the politicisation of policy problems, discussed in the two

previous sections, external events affect the actor constellation in a policy
area. They create favourable conditions to adopt certain policy instruments but
hinder the adoption of others. External events occur on the outside of European
environmental policy but affect policy-making within the policy area. For
both theoretical and empirical reasons, external events are not systematically
conceptualised (cf. section 1.4.2). However, the analysis of the interviews with
experts of European environmental policy reveals three kinds of external events
that affect the choice of policy instruments in European environmental policy:

environmental disasters, decisions by international organisations and developments
in other policy areas, particularly in economic policy. A number of environmental
disasters are caused by industrial accidents. Hazardous substances escaping from
factories and warehouses, waste reaching habitats and rivers, and oil released
from shipwrecked tankers result in environmental damage and endanger human
health, flora and fauna. Environmental disasters are also represented by natural
phenomena, like floods, whose effects are aggravated by human activities. As
several interviewees from various organisations reported, environmental disasters
increase the likelihood that command and control legislation is adopted instead
of suasive governance instruments and soft law. Environmental disasters point
to a shortcoming or a lack of political steering. They are highly visible and
receive public attention. As a consequence, environmental issues are set on the
political agenda and pressure is put on political actors to engage in regulatory
activities. Vogel (2003: 568–71) argues that environmental disasters are a main
factor responsible for comprehensive and stringent environmental standards in the
EU and its member states. Environmental disasters highlight regulatory failures
and increase public support for more coercive policy instruments that adhere to
the precautionary principle and aim to reduce the risks associated with industrial
processes and new technologies.
Compared to environmental disasters, the effects of decisions by international
organisations and of developments in other policy areas on the adoption of policy
instruments are more ambiguous. There are several instances where international
conventions and reports from international organisations influenced policy-making
in the EU. However, only the Kyoto Protocol affected the adoption of a certain policy
instrument. As a result of the Kyoto Protocol, the economic governance instrument
of an emission trading system was established in the EU in order to combat climate
change. Developments in other policy areas also influenced policy-making in
European environmental policy. While developments in energy policy and social
policy affected other aspects than the adoption of policy instruments, developments
in economic policy had an impact on the instrument choice. In particular, the Lisbon
strategy furthers suasive governance instruments and soft law.
Environmental Disasters
On the occasion of the thirtieth anniversary, radio stations and newspaper, namely
Deutschlandfunk and the Süddeutsche Zeitung, reported on the disaster of Seveso.
On 10 July 1976, in the chemical plant ICMESA a pressure-relief valve broke and
kilogramme quantities of tetrachlorodibenzoparadioxin (TCDD) escaped from the
reactor into ambient air. TCDD is one of the substances most dangerous to human
beings and was later known as Seveso-dioxin. A dense vapour cloud containing the
dioxin spread over the Lombardic town Seveso and the surrounding municipalities.
Trees lost their leafs, soil was contaminated, animals died, and humans were poisoned.
In particular, children suffered from severe skin diseases. The responsible concern
managers reacted by hushing the accident up and playing it down. The Seveso
disaster prompted European legislation. In order to prevent such accidents, in 1982,
the Council of the EU adopted the directive on major-accident hazards of certain
industrial activities (82/501/EEC), the so-called Seveso directive. The directive
was amended twice and replaced by the so-called Seveso II directive (96/82/EC) in
1996. The original directive was amended and replaced as a consequence of further
environmental disasters also outside Europe. In 1984, a leak of methyl isocyanate
in a factory in Bhopal, India, caused more than 2000 deaths. In 1986, a fire in a
warehouse of Sandoz in Basel, Switzerland, released hazardous substances into
the river Rhine and caused the death of thousands of fish. The fourth recital of the
Seveso II directive mentions industrial accidents as a cause for legislation.
The Seveso II directive simplified the original directive and broadened
its scope. It lists dangerous substances and applies to all establishments where
these substances are present or may be produced by an accident. The directive
sets obligations for both operators and member states. Operators have to set
forth a policy about how to prevent a major accident and to take all measures
necessary for it. They have to notify the national competent authorities about the
establishment and its environment, the responsibility within the organisation, and
the dangerous substances used and stored. Each operator has to produce a safety
report that demonstrates that adequate safety measures are taken. The safety report
must be reviewed at certain occasions and at least every five years. Furthermore,
each operator has to draw up an internal emergency plan and provide the necessary
information, if an accident occurs. Member states have to make sure that operators
comply with the obligations codified by the directive. National authorities have to
inspect operators and prohibit the operating of the establishment, if operators do
not comply with the provisions. Furthermore, member states have to integrate the
objective of preventing major accidents into their land-use policies. In the event of
an accident, member states have to make sure that emergency measures are taken
and provide information on the accident and on safety measures to the public, the
European Commission and other nation states affected by the accident.
The Seveso II directive was amended by a directive (2003/105/EC) again in
response to environmental disasters and industrial accidents, as the recitals of the
latter directive indicate. The explosion at a fireworks factory in Enschede and at
a chemical fertiliser plant in Toulouse showed the danger of storing of hazardous
substances. Both in Aznacóllar, Spain, and in Baia Mare, Romania, the dam of a
tailings pond broke and damaged the natural environment. Tailings are mining
waste composed of materials that have to be removed in order obtain mineral
resources. It is a common method to dispose of mining waste by discharging the
tailings into an artificial pond, which is thus called tailings pond. Besides inert
materials, mining waste may contain dangerous substances like heavy metals.
In 1998, the dam of a tailings pond of a mine in Aznacóllar broke and released
three million square metres of sludge and four million square metres of acidic
water into the adjacent environment. The dam burst caused a pollution of the river
Guadiamar and the national park Coto Doñana. Two years later, a dam burst at a
mine in Baia Mare and discharged mud and wastewater into the river system. A
wave of 30 to 40 kilometres length contaminated by cyanide destroyed flora and
fauna of the central river Tisza. Four weeks later and 2,000 kilometres downstream
at the Danube delta, the cyanide plume was still measurable (Commission of the
European Communities 2000a: 4–6).
Both the Commission (2000a) and the European Parliament (2001) considered
the mining accidents in Aznacóllar and in Baia Mare as evidence that existing
European environmental legislation has to be improved and further legislative
activity is necessary in order to prevent such accidents. Further mining accidents
outside Europe are mentioned in order to support the argumentation. The European
Parliament explicitly argued that command and control legislation is necessary
in order to make sure that mining companies take sufficient precautions against
industrial accidents. It is further argued that soft law and suasive instruments
may only complement legislation but may not substitute legislation in the area of
mining. In 2006, the European Parliament and the Council adopted the directive on
the management of waste from extractive industries (2006/21/EC), which realises
a main demand set out in the communication of the Commission (2000a).
The directive aims at preventing or reducing adverse effects on the natural
environment and on human health resulting from waste management from the
extractive industries. The directive lays down that operators of an extractive
industry waste facility need a permit in order to run their business. In order to obtain
a permit, operators have to comply with provisions that are supposed to guarantee a
safe operation that prevents pollution and a prevention of environmental damages
after the closure of the facility. In particular, the directive applies to facilities that
may cause a major accident, if a failure or an incorrect operation occurs. Those
facilities have to guarantee a safe and transparent production process, prevent
major accidents and provide for the event of an accident. Moreover, they have to
provide a financial guarantee in order to ensure that they are able to comply with
the directive and to restore the site to a satisfactory state. The responsibility of the
operator for the state of the site does not end after the facility is closed down. It
only expires, if the competent authority gives its approval. The competent authority
in the respective member state issues the permits and monitors compliance by
requiring records from the operators and conducting inspections.
Industrial accidents triggered the adoption of European legislation in order to
prevent and reduce further damage to the environment resulting from such accidents.
Moreover, industrial accidents raised the question of who should bear the cost of
cleaning up environmental pollution and restoring the ecological balance after the
natural environment has been damaged. The question is answered by the polluter-
pays principle, which is part of European environmental policy. The polluter-pays
principle states that the costs of environmental damages should not be paid by
society, i.e. the taxpayers, but by the polluter, i.e. the actor whose operation caused
the damage. In order to implement the polluter-pays principle the Commission put
forth a liability scheme in its white paper on environmental liability (Commission
of the European Communities 2000b). Environmental liability makes economic
actors liable for negative consequences of their activities on the environment. Thus,
it internalises the costs of environmental pollution into the costs of products and
production and prevents that single actors exploit the environment while society
has to bear the costs. Environmental liability reduces the problems stemming from
the common good nature of the environment. However, environmental liability
is only effective, if the polluter can be identified, the damage is quantifiable, and
a causal link between the polluter and the damage can be shown. Since polluters
have to pay for the damage they cause, environmental liability is supposed to
foster the awareness of prevention and precaution. Thus, environmental liability
implements key principles of European environmental policy, namely the polluter-
pays principle, the prevention principle and the precautionary principle.
When setting forth environmental liability in its white paper, the Commission
(2000b: 2) begins by referring to industrial accidents that show the necessity of
making economic actors responsible for their activities. As examples representing
environmental damages caused by human activity, the Commission mentions the
dam burst in Aznacóllar and the shipwreck of the oil tanker Erika. In December
1999 the tanker Erika chartered by the oil and gas company TotalFina broke in
two and released thousands of tons of oil into the Atlantic. The tanker was already
old and not capable of withstanding severe weather conditions. The released oil
contaminated more than 400 kilometres of the French coast. 45,000 sea birds were
found dead, their feathers stuck together with oil (European Environment Agency
2003: 35). Affected by industrial accidents, the Commission (2000b: 26, 30) prefers
European legislation to soft law and suasive governance instruments in order to
implement the liability scheme effectively. The Commission acknowledges that
a Community recommendation and voluntary agreements create fewer costs for
operators than European legislation, but argues that a Community directive is
of more benefit to the environment because it is more effective in implementing
principles of European environmental policy, particularly the polluter-pays
principle, and in restoring the natural environment.
In 2002 the Commission put forth a proposal for a directive on environmental
liability with regard to the prevention and remedying of environmental damage
(COM(2002) 17 final) arguing again for the necessity of a liability scheme in the
light of industrial accidents. Two years later, the European Parliament and the
Council adopted the directive (2004/35/EC). The directive applies to occupational
activities that endanger or actually damage the natural environment consisting of
land, water, protected species and natural habitats. The directive provides a strict
fault-based liability scheme. The strict liability scheme applies to a number of mainly
agricultural and industrial activities that are dangerous or potentially dangerous to
the environment. They are listed in annex III of the directive. Operators engaging
in these activities are liable for environmental damage even if they are not at fault.
In contrast, operators of activities not listed in annex III are held responsible, only
if they are at fault of negligent. The competent authority in the respective member
state has to make sure that the operator take preventive measures and undertake
restoration in the case of an environmental damage. Alternatively, the competent
authority may take these measures itself and charge the respective operator. After
an environmental damage occurred, contaminated land has to be restored so that
a threat to human health is ruled out. Water, protected species and natural habitats
have to be put into the condition previous to the damage.
Environmental disasters that provoke European regulation are not only
represented by industrial accidents but also by natural phenomena. The large
number of flooding triggered further policy measures at the European level. For
the period between 1998 and 2002, the European Environment Agency (2003:
6) counted about 100 major damaging floods in the countries of the European
Economic Area and Switzerland. These floods caused some 700 fatalities. About
half a million people were displaced and the insured economic losses amounted
to at least 25 billion euros. Natural phenomena cannot be prevented. The root
causes of floods, rainfall and sea levels, cannot be controlled. However, there are
human activities that increase the likelihood of natural phenomena and aggravate
their negative impacts, if they occur. The risk of flood damages increases, if rivers
are straightened, forests in the upper catchment are felled, natural flood plains are
suppressed, inadequate drainage is used, and houses are built on flood areas. Since
human activities that take place upstream have effects on downstream areas, flood
protection requires a transboundary cooperation and coordination along the whole
length of a river. Several policy measures has been taken at the European level.
The Structural Funds, particularly the European Regional Development Fund,
provide financial means in order to support infrastructure for flood protection and
cross-border cooperation between member states. After the flooding in central
Europe in August 2002 along the Danube and Elbe rivers, the European Union
Solidarity Fund was established in order to grant rapid financial assistance to the
affected areas (Commission of the European Communities 2004).
The flooding in central Europe caused the death of 52 people and left
thousands homeless. The damage is estimated at 14 billion euros. In the wake of
the flooding, the issue of precautionary and sustainable flood protection was put on
the agenda of the Council of Ministers in Luxemburg on 17 October 2002. After
several initiatives, meetings and workshops, in January 2006, the Commission put
forth a proposal for a directive on the assessment and management of flood risks
(COM(2006) 15 final) pointing to the severe damages resulting from flooding. In
2007, the directive (2007/60/EC) was adopted in the co-decision procedure. The
Council agreed by a unanimous vote. The directive completes the water framework
directive (2000/60/EC) that contains only some provisions related to floods. The
new directive aims to reduce the adverse consequences of floods on the natural
environment, human health, cultural heritage and economic activity. It requires
member states to draw up flood risk maps that cover all areas of potential flooding
and indicate the probability of flooding for these areas. Moreover, member states
have to establish flood risk management plans for each river basin district. These
plans have to set out measures to prevent flooding, protect from floods, and prepare
for the event of a flood. They include issues like water management, land use and
nature conservation (European Parliament 2006a: 1–3).
Decisions by International Organisations
As environmental disasters, also decisions by international organisations further

the adoption of policy instruments in the EU. However, while international
conventions and reports by international organisations influence policy-making in
the EU, their impact on the choice of policy instruments is more ambiguous than
in the case of environmental disasters. The outstanding exception is represented
by the Kyoto Protocol that resulted in the adoption of an emission trading
scheme in the EU in order to combat climate change. The transboundary nature
of environmental policy problems is a main reason for adopting international
conventions, drawing up reports by international organisations and establishing
international regimes. The seventh recital of the Seveso II directive (see above)
refers to the convention on the transboundary effects of industrial accidents of
the United Nations Economic Commission for Europe (UNECE). The convention
was adopted in 1992 in order to protect human beings and the natural environment
against environmental disasters. It aims to prevent industrial accidents, to reduce
their frequency and severity and to mitigate their effects. The convention provides
for the cooperation between nation states and the implementation of policy
measures in order to achieve the stated objectives.
Another example where United Nations organisations had an influence on
policy-making in European environmental policy is given by a joint report of the
United Nations Environment Programme (UNEP) and the United Nations Office
for the Coordination of Humanitarian Affairs (OCHA) on the mining accident
in Baia Mare. In reaction to several mining accidents throughout the world and,
particularly, to the mining accident in Baia Mare (see above), the European
Commission draw up a communication in order to encourage activities that
prevent further accidents related to mining activities. The starting-point of the
Commissions’ communication is the description of the accident in Baia Mare. The
description relies to a large extent on the joint report of UNEP and OCHA. This
report is written by a number of experts who investigated the dam construction,
emergency and early warning systems, implications for drinking water and surface
water quality, as well as impacts on sediment and soil. Furthermore, they assessed
the methods used by national authorities to measure and analyse contamination
and contacted various people and organisations concerned (Commission of the
European Communities 2000a: 3, 7–8).
Further instances where international organisations affected environmental
policy-making in the EU were mentioned by single interviewees. In particular,
the OECD affected environmental policy-making in the EU by developing
policy ideas like the polluter-pays principle and the precautionary principle (cf.
section 3 and section 3.4), which subsequently were adopted in the EU. Faced
with the scientific uncertainty of cause and effect of environmental policy
problems, international organisations provide information and knowledge as
well as justification for regulatory measures. However, as Kellow and Zito
(2002) further argue, international organisations constitute one of several arenas
in which political actors may pursue their interests and policy beliefs. Decisions
by international organisations do not only influence European policy-making,
they may be themselves influenced by nation states, business organisations and
environmental groups.
Among the instances in which decisions in international arenas affected the
choice of policy instruments in the EU, the adoption of an emission trading scheme
is an outstanding case. Interviewees representing various organisations consistently
reported that the introduction of an emission trading scheme in the EU is a consequence
of the Kyoto Protocol to the United Nations Framework Convention on Climate
Change, which was adopted in 1997. The Kyoto Protocol provides for a reduction
of greenhouse gas emissions that are considered the main cause of global warming.
Under the Kyoto Protocol, developed countries have to reduce their greenhouse gas
emissions by a collective average of 5 per cent compared to the level of 1990 by
2008 to 2012. Emission trading constitutes the main governance instrument in order
to combat climate change. The Kyoto Protocol entered into force in 2005. In 2002, it
was approved by the member states on behalf of the European Community (EC) by
a Council decision (2002/358/EC). In the following year, the directive establishing
a scheme for greenhouse gas emission allowance trading within the Community
(2003/87/EC) was adopted in order to fulfil the commitments of the EU and its
member states under the Kyoto Protocol.
The directive establishes an EU-wide emission trading system of the so-called
cap-and-trade type, as it is provided by the Kyoto Protocol. In order to commence
the trading system, an absolute quantity of emissions allowances (cap) is allocated
to installations. Each installation gets a quantity of emissions that it is allowed to
emit. If an installation exceeds its allowed emission quantity, the operator has to buy
allowances from other installations that fall below their emission limit and whose
operator may sell emission allowances (trade). The EC directive allocates quantities
of carbon dioxide emission allowances to installations of several industrial sectors.
At least 95 per cent of the initial emission allowances are grandfathered, as it is called,
that is, firms get allowances for free. Besides obtaining emission allowances by trade,
the directive to a certain extent also allows that a firm stores surplus allowances for
later use or already uses future allowances that have to be saved in the future. The
emission trading scheme is monitored by national authorities. If enterprises do not
comply with the trading scheme, they have to pay a penalty of 40 euros per tonne of
carbon dioxide during the first three-year period of the trading scheme and 100 euros
afterwards. From an economic perspective, the trading system contributes to savings
because it encourages emission reduction where it may be carried out at lowest cost
(European Environment Agency 2006: 18–20).
Oberthür and Tänzler (2006) show that the Kyoto Protocol affected the
adoption of emission trading by EU member states as a governance instrument to
combat climate change. They argue that the adoption of the EU emission trading
scheme was to a large extent a result of policy diffusion (cf. section 1.2.3) from the
international to the European level produced by two mechanisms. First, the Kyoto
Protocol sets emission limits for six greenhouse gases and, thus, put pressure
on nation states to take actions in order to comply with these targets. However,
the Protocol does not specify the way by which nation states should achieve the
policy goal. Nation states are not obliged to establish an emission trading scheme.
Hence, there is a certain but unspecific pull to comply with the Kyoto Protocol.
Second, the Kyoto Protocol provides a special incentive for its implementation. It
provides geographical flexibility by allowing emission reduction where it may be
achieved at lowest cost while the overall emission allowances are capped. Thus,
it is supposed to provide a cost-effective instrument to combat climate change.
In the international negotiations on combating climate change, emission trading
as a governance instrument was introduced by the USA. Initially, the EU and its
member states did not support emission trading. Nevertheless, after the adoption
of the Kyoto Protocol, emission trading was taken up by several member states
and was finally adopted at the European level. The unspecific compliance pull and
the special implementation incentive provided by the Kyoto Protocol facilitated
the introduction of an emission trading scheme in the EU.
Developments in Other Policy Areas
Among the decisions by international organisations the Kyoto Protocol is the

outstanding occurrence where an external event affected the adoption of a policy
instrument in European environmental policy. The impact of other decisions by
international organisations is more ambiguous. The ambiguity also applies to the
effects of developments in other policy areas on the adoption of policy instruments
in environmental policy despite the interaction of environmental policy with other
policy areas. The principle of sustainable development simultaneously refers
to environmental policy, economic policy and social policy, and environmental
policy integration aims to weaken the functional differentiation of policy areas in
order to effectively protect the natural environment (cf. section 3). More concrete
examples are given by energy policy and employment policy. Both an increase in
oil and gas prices and an increase in unemployment foster innovative environment-
friendly technologies. In the former case, political support for renewable energy
technologies increases because they may reduce the dependence on energy imports
and contribute to guarantee the energy supply. In the latter case an investment
in innovative technologies is considered as creating jobs because it results in
a competitive advantage and an increase in exports. However, the interactions
between environmental policy and other policy areas refer to a large extent to
other aspects of policy-making but not to the adoption of policy instruments.
As far as the adoption of policy instruments is concerned, environmental policy
is affected by developments in economic policy. Several interviewees pointed out
that economic conditions may impede environmental regulation. If economic
growth and competitiveness are on top of the political agenda, policy measures that
relieve businesses of legal requirements gain support. As a consequence, suasive
governance instruments and soft law are favoured at the expense of hierarchical
policy instruments. Economic and political actors consider constraints on
economic activities in other countries, when they discuss environmental regulation

in the EU. A less strict and less comprehensive regulation in the USA provides
an argument against increasing the regulatory burden on European enterprises
in order to not threaten their competitiveness. However, considering regulation
in other countries does not necessarily result in abandoning strict environmental
regulation. Vogel (2003) shows that from the 1960s to the mid-1980s the USA
had higher environmental standards than the EU and its member states. The more
stringent American standards for car emissions, for example, provided a benchmark
for environmental legislation in the EU and its member states. However, since
the 1990s environmental policy in the EU has become more stringent and more
precautionary than in the USA.
A number of interviewees from various organisations reported that, currently,
environmental policy is under constraint due to concerns about employment,
economic growth and competitiveness. They argue that poor economic conditions
favour business interests of less regulatory activities. A case in point is the Lisbon
strategy. At the Lisbon European Council in 2000, the heads of state and government
agreed on the Lisbon strategy. It draws on earlier initiatives that recommend
supply-side oriented economic measures to member states and includes several
policy measures under the heading of OMC. The OMC sets guidelines, timetables
and ambitious targets for the economic and societal development in the EU. In
order to implement the targets, the OMC relies on legally non-binding policy
instruments, like benchmarking, monitoring and peer review. There are several
OMCs addressing different policy issues (Hodson and Maher 2001: 723–7). The
Lisbon strategy plays a prominent role in the current political rhetoric of the EU. It
applies to several policy areas but originally lacked an environmental dimension.
Although an environmental dimension was added by the Gothenburg European
Council in 2001, environmental concerns are given less weight than economic and
social ones. The environmental dimension in the Lisbon strategy is weak because,
in contrast to the economic and social dimension, it is not supported by an OMC
nor are there guidelines for environmental policy (Homeyer 2007: 47–50). The
Lisbon strategy promotes suasive governance instruments and soft law. As far
as environmental policy is concerned, it puts less emphasis on environmental
concerns and stresses employment, economic growth and competitiveness.
Thus, the Lisbon strategy furthers soft environmental regulation if any, although
statements frequently point to the importance of environmental policy.
3.6 Characteristics of Policy Instruments and the Cleavage Structure of the

Policy Area
The previous sections of this chapter described the use of policy instruments
in European environmental policy and discussed the factors that affect the
choice of a particular policy instrument. This final section of the chapter on
European environmental policy points to the close connection between the
characteristics of policy instruments and the cleavage structure of the policy
area. Policy instruments in European environmental policy are applied in order

to implement policy outputs that aim to protect the natural environment and
human health, prevent environmental pollution, and improve the quality of air,
soil, water and habitats. Policy instruments are means of implementing ends
adopted in political decision-making. Policy outputs contain both political
ends and policy instruments. When policy outputs are negotiated and adopted,
political actors already consider their implementation. Characteristics of policy
instruments connect the stages of policy formulation and policy implementation.
The interests and beliefs of political actors, their reflection in policy instruments,
the effectiveness ascribed to policy instruments, and the degree of coercion they
exert on the addressees of political steering merge and constitute the cleavage
structure in environmental policy-making. Both governance instruments and
legal instruments face resistance from the addressees of political steering when
environmental objective collide with their interests and beliefs. While businesses
oppose governance instruments that restrict their economic flexibility, member
states oppose legal instruments that create administrative and economic costs at
the national level. Thus, in order to implement European environmental policy
outputs effectively, policy instruments have to exert coercion on the addressees
of political steering or provide incentives for them. The ratio of coercion to
incentive is subject to the political struggle.
Economic activities of consumption and production are the main cause
of environmental pollution. Thus, as far as the political struggle is concerned,
economic growth and environmental protection constitute competing policy goals
despite several arguments for their mutual dependence and stimulation. In the
political debate, all actors acknowledge the two policy goals and their value for
society as a whole. However, the interests and beliefs of the organisations involved
are associated with the respective policy goal to different degrees. The interest
of business organisations focuses on economic growth and competitiveness.
Employers’ associations argue that high environmental protection standards
threaten the economic basis of businesses. They reject command and control
legislation because they consider it as an obstacle to economic activities and thus
as, at least, not suitable for enhancing economic growth and competitiveness. As
far as environmental goals are concerned, UNICE/BusinessEurope argues that
environmental policy measures have to be efficient. In contrast to the argument
for effective policy instruments, the argument for efficient policy instruments
includes the costs for enterprises. The argumentation for economic growth
and competitiveness goes hand in hand with the demand for a reduction of the
regulatory burden on industry. If regulatory measures are necessary, business
organisations prefer suasive instruments and soft law because they do not
exert a high degree of coercion on enterprises. In contrast, the primary aim of
environmental organisations is the protection of the natural environment. They
prefer command and control instruments and hard law because they consider
them as effective policy instruments. Environmental organisations do not seek to
impose costs on businesses but they argue that enterprises will not refrain from
seeking economic profit in order to comply with environmental targets, if they are
not obliged to do so.
The European Commission, the European Parliament and the Council of
Ministers favour the use of a mix of governance instruments. They recognise
shortcomings of command and control instruments but argue that hierarchical
instruments must not be abandoned but have to be supplemented with economic
and network-based instruments in order to effectively solve environmental
policy problems. The problem of an effective implementation of policy outputs
ranks high on the political agenda of the EU. Attention is given to policy
implementation as it is shown by the discussion on better regulation and the
increased use of impact assessments. However, whether a policy instrument
is regarded as effective also depends on the interest and belief of the actors.
A case in point is the emission trading scheme to combat climate change. An
official of DG Environment argued in the interview that the emission trading
scheme represents an effective governance instrument to combat climate change
because it is directed towards the level of individual firms where economic
decisions are taken. Moreover, the emission trading scheme has the potential
to reconcile environmental and economic goals. While the absolute quantity of
emissions allowances ensures environmental standards, the trade of emission
allowances permits a cost-effective use of resources and, thus, creates incentives
for businesses to comply with environmental policy goals and to even further
reduce emissions. In principle, both the EEB and UNICE/BusinessEurope
acknowledge emission trading as an effective governance instrument. However,
both organisations highlight its ineffective implementation in practice. On the
one hand, the EEB criticises that at the beginning of the emission trading scheme
too many emission allowances were allocated. As a consequence, the reduction
of carbon dioxide emissions was ineffective. On the other hand, UNICE/
BusinessEurope also criticises an ineffective implementation but complains
about the regulatory burden on industry.
Representatives of the EEB, the European Parliament and member states argued
in the interviews that, despite shortcomings, command and control legislation
is the most effective policy instrument because it provides for sanctions in the
case of non-compliance. In order to make businesses comply with environmental
standards, there has to be at least the possibility to announce the adoption of
command and control legislation, if environmental goals are not achieved by other
policy instruments. Suasive instruments and soft law are considered as ineffective
because they lack the possibility of sanctions. This view is confirmed by experiences
with network-based and voluntary policy instruments that did not reach the agreed
environmental goals, like the voluntary agreement of car manufacturers to reduce
carbon dioxide emissions of new passenger cars. Although voluntary agreements
constitute the policy instrument preferred by industry and businesses agreed on the
policy goals, they did not achieve these goals. Golub (1998b: 23) concludes on the
basis of several case studies that economic actors frequently advocate suasive and
economic governance instruments in theory, but oppose their implementation in
practice because businesses seek to reduce any regulation in order to increase the
flexibility of economic activities.
Interests and beliefs of actors and characteristics of policy instruments mingle
in respect of both governance instruments and legal instruments. In the interviews,
various actors including representatives of member states raised the argument
that hard law is the most effective legal instrument because member states are
obliged to comply with EU regulations and directives. If a member state does
not comply, the European Commission may start an infringement procedure
against the member state. An infringement procedure is the most coercive
sanction at the disposal of the Commission. Hence, member states that have an
interest in harmonising European environmental standard within a specific issue
area are in favour of hard law, whereas member states that face administrative
and economic costs due to European regulatory measures prefer soft law. The
European Parliament prefers European legislation. In addition to the argument
of effective political steering, it is argued that the adoption of hard law in the co-
decision procedure enhances democratic legitimacy in comparison to soft law. In
contrast to the European Parliament, the Commission is more open to soft law. The
Commission argues that a mix of legal instruments is the most effective way to
implement European policies in the member states. However, interviewees from
various organisations reported that the current Commission is more economic-
friendly than the previous one, which is also shown by its increased acceptance of
non-binding policy instruments. This alignment finds expression in the thematic
strategies that are adopted in the form Community communications. Nevertheless,
the cleavage between the EU and the nation state is less present than the cleavage
between environment and economy because environmental regulation by EU law
already covers a broad scope. Environmental policy at the European level covers
almost all environmental issues also addressed by environmental policy in the
member states. Only few issues, like the introduction of eco-taxes, are not subject
to European legislation.
The characteristic of a policy instrument represents a factor relevant to the
choice of policy instruments that is directly connected to the respective policy
instrument. This statement does not exclude the possibility that different actors
may attribute different characteristics to the same policy instrument. In particular,
the attribution of effectiveness to a policy instrument is mediated by an actor’s
interest and belief. Political actors consider some policy instruments as favourable
to achieve their policy goals, while they regard others as restricting their goal
achievement. By inducing costs and benefits to various actors, policy instruments
affect the preferences of political actors and, thus, shape the actor constellation
in the policy area. However, whether, political actors are able to transfer their
preferred policy instrument into policy outputs depend on situational structures,
namely institutions, the politicisation of policy instruments and external events.
Situational structures create and constrain opportunities for political actors to realise
their policy goals, including their preferred policy instruments, within the actor
constellation of a policy area. Situational structures of European environmental
policy were discussed in the sections 3.3 to 3.5. Their effect on the choice of policy
instruments may be inferred, when the processes of policy-making in European
environmental policy and European social policy are compared in Chapter
5. Before comparing the choice of policy instruments in the two policy areas,
policy instruments, the actor constellation and situational structures of European
social policy as well as specific characteristics of the policy area are subject to the
following chapter.
Chapter 4
European Social Policy
European social policy aims to improve living and working conditions, prevent
discrimination, guarantee proper social protection and social security, promote
employment, and combat social exclusion. Living and working conditions
should be harmonised in the EU at a level that preserves social achievements
in the member states. The adoption of minimum social standards should ensure
that welfare state provisions are not undermined. Improved living and working
conditions include employees’ health and safety at the workplace, their legal
position as far as issues relating to labour law are concerned, and equality between
women and men in respect of labour market opportunities and treatment at work.
In addition to preventing sexual discrimination in the labour market and at the
workplace, European social policy aims at avoiding any discrimination based on
sex, age, disability, religion, belief, sexual orientation and racial or ethnic origin.
While the member states are responsible for organising and funding their systems
of social security, the EU plays a role of coordination. In particular, European
provisions guarantee that migrant workers do not lose their entitlement to social
security benefits when they move from one member state to another. Furthermore,
European social policy aims at reducing unemployment and at combating social
exclusion. Poverty is at the heart of social exclusion, which is often caused by
unemployment. However, social exclusion also includes insufficient access to
health care and education.
The political actors involved in European social policy who were interviewed
in this study agree on the aims of the policy area listed in the previous paragraph.
Also the EC Treaty makes provisions for dealing with these issues in the context of
social policy. European social policy differs from social policy in the nation states.
Social policy may be defined both in narrow and in broad terms. In a narrow sense,
social policy consists of the social security systems that protect people against the
risk of invalidity, old age, poverty, sickness and unemployment. These systems
of social security constitute the core of national welfare states. In a broad sense,
social policy also covers industrial relations, public services, families, immigration,
regional cohesion, education and vocational training. Leibfried and Pierson (1995)
define social policy in a broad sense as composed of the intervention into the
market in order to modify market outcomes and correct market failures and of
the redistribution of values between societal classes, generations and regions.
They show that the broader the definition of social policy is, the more the EU is
involved in policy-making that is defined as social policy. Vice versa, as far as
social security systems are concerned, member states are primarily responsible
and the EU plays only a minor role.
Leibfried and Pierson (1995) describe the scope of social policy at the national
level and the European level but they do not define European social policy as a
policy area. European social policy does not cover all characteristics of the broad
definition nor does it entail essential elements of redistribution. Despite a broad
scope of social policy-making at the European level, the provision of public services
and the reduction of regional disparities are usually not considered as subjects of
European social policy. Public services are provided by state-owned companies
or private businesses at the national and sub-national level. The reduction of
regional disparities is ascribed to another European policy area, namely regional
or cohesion policy. However, as the answers of the interviewees and the provisions
of the EC Treaty show, both employment policy and labour policy constitute a
part of European social policy. Employment policy aims to increase employment
by creating favourable conditions to the emergence of new jobs, by assisting
people in the labour market and by providing incentives to take up employment.
Labour policy addresses the relationship between capital and labour, i.e. industrial
relations, and intervenes in the use of capital and labour as factors of production.
European social policy is conceived as the intersection of the area of social
regulation and the area of social policy (Majone 1993). On the one hand, social
regulation encompasses regulatory policies that aim to correct market failure but
also covers policy areas like environmental policy and consumer policy. On the other
hand, social policy describes the issues and policy problems that are tackled by social
political actors at the European level but also refers to policy measures that aim to
redistribute societal values. Hence, European social policy is defined as a policy area
composed of organisations that aim for improved living and working conditions,
anti-discrimination, proper social protection and social security, employment and
social inclusion by using regulatory policy measures (cf. section 2.2).
The EC Treaty provides several legal bases for European social policy. A legal
basis of social policy may allow either the adoption of European legislation or
restrict European measure to soft law (cf. section 4.3). Title XI of the EC Treaty
allows policy measures in many of the issue areas mentioned above, including
labour policy, social inclusion and gender equality. Article 13 TEC prohibits any
kind of discrimination. Title III and Title VIII of the EC Treaty make provisions
for migrant workers and employment policy, respectively. Furthermore, policy
measures of European social policy may be based on Treaty Articles referring to
other policy areas, namely agriculture (Art. 37 TEC) and transport (Art. 71 TEC).
If the completion or the functioning of the common market is affected, policy
outputs may be adopted on the basis of Article 95 or Article 308 of the EC Treaty
(Beutler et al. 2001: 577–82).
Employment, Social Welfare and the Common Market
Legislation of social policy and economic policy may not only be based on the
same legal basis, they are also often closely connected in substantive terms. Both
the neo-liberal perspective and the social democratic perspective, using two
common and general terms to describe the political alignment, acknowledge the
close connection between both policy areas. However, whether economic policy
measures or social policy measures are given priority depends on actors’ beliefs on
causal relationships and their weighting of policy goals. The policy goals at stake
are economic growth and economic competitiveness on the one hand and social
equity and social justice on the other. From a neo-liberal perspective, economic
growth is necessary in order to create wealth, which in turn is the prerequisite for
social policy measures. Furthermore, economic growth results in benefits to people
at the top of the economic system. These benefits are supposed to be passed to less
wealthy people by a trickle-down mechanism. As far as the EU is concerned, neo-
liberals argue that the completion of the common market results in improved living
and working conditions. This perspective is contested by social democrats and
other more left-wing actors. They argue that economic growth does not necessarily
enhance social welfare nor does it create benefits for everybody. Rather, measures
to enhance economic growth and competitiveness have to be complemented
by regulatory measures of social policy in order to improve living and working
conditions. If the common market is completed without simultaneously adopting
European social policy regulation, there is the risk that existing social standards
are cut back (Beutler et al. 2001: 576–7).
The EC Treaty and secondary legislation of European social policy monopolise
neither the neo-liberal nor the social democratic perspective (Beutler et al. 2001:
577). However, Scharpf (2002: 646–51) demonstrates that European integration
resulted in a constitutional asymmetry that favours the functioning of the common
market to social protection and equality. While at the national level economic policy
and social policy have the same constitutional status, the economic dimension
dominates at the European level. European integration has been based mainly
on economic integration. Economic harmonisation, the removal of non-tariff
barriers and the monetary union put legal constraints on member states. European
legal provisions of the same scope are absent in the realm of social equity and
social justice. Furthermore, European legal constraints reduce national options
of economic interventions to supply-side strategies, like lowering of tax burden
and deregulation of employment conditions. While at the national level conflicts
between economic growth and social equity may be solved politically due to their
constitutional symmetry, in the European Treaties, economic regulation has a
position superior to social policy regulation. At the European level market-making
policies are structurally privileged to market-correcting policies (cf. section 2.2).
At the end of the 1990s the concept of so-called flexicurity emerged at the
European level. It is supposed to reconcile market-making and market-correcting
policies. The term combines economic flexibility and social security. The flexibility
and mobility of employees in the labour market should be increased in order to
enhance the competitiveness of enterprises. At the same time, social security have
to be guaranteed to employees. The flexicurity concept shifts the focus from job
security to security of employment. An essential element of the concept is the
development of employees’ capabilities. Providing education, vocational training
and incentives for learning should equip employees with the knowledge and skills
required by businesses. It is supposed that the implementation of the flexicurity
concept results in economic growth because enterprises may make flexible use
of a skilled workforce. Furthermore, employment is supposed to increase, which
results in higher living standards of individuals and provides national welfare
systems with funds contributed by those in employment in order to afford a high
level of social protection to those in need (Barnard 2006: 57–9).
Development of Social Policy Issues
The tension between market-making and market-correcting policy measures is

also reflected in the development of social policy issues at the European level
(Falkner 1998: 55–69, 78–82, Kleinman 2002: 83–94, Schulte 2004: 84–8). When
the EEC was established, the EEC Treaty focused on economic integration and
hardly provided for any market-correcting measure of social policy. Only the
Treaty establishing the European Coal and Steel Community (ECSC) and the
Euratom Treaty contained some social policy provisions that were, however,
restricted to the sectors of coal and steel and atomic energy, respectively. When
the EEC Treaty was negotiated, the French government successfully claimed that
a provision for equal pay of women and men was introduced into the EEC Treaty
(now Art. 141 TEC). Although the French government was motivated by the fear of
a competitive disadvantage for French industry, the EEC Treaty established equal
pay of women and men also as an objective of social justice. Further provisions
of social policy referred to migrant workers in the context of the free movement
of goods, services, persons and capital. Two regulations of social policy belong
to the first legal acts adopted on the basis of the EEC Treaty: regulation (EEC)
no. 1612/68 on freedom of movement for workers within the Community and
regulation (EEC) no. 1408/71 on the application of social security schemes to
employed persons and their families moving within the Community.
At the Paris summit in 1972, the heads of state and government agreed
on drawing up a Social Action Programme. Two years later, the Council of
Ministers adopted the Action Programme, which included market-correcting
policy measures and advocated full and better employment, improved living and
working conditions, and a greater participation of capital and labour. However, in
the following years, policy-making in European social policy again focused on
the functioning of the common market. The focus on the issue area of health and
safety of workers was closely related to the worry of a distortion of competition
due to lower health and safety standards in some member states. Also the Single
European Act was dominated by concerns about economic integration. As a
reaction to the emphasis placed on the common market by the Single European
Act, several actors, including trade unions, a majority of members of the European
Parliament and representatives of the Commission, demanded that market-making
measures should be accompanied by policy measures aiming at social equity and
social justice.
In 1989, the heads of state and government of all member states except the
United Kingdom adopted the Community Charter of Fundamental Social Rights.
The Charter did not have any binding legal effect but explicitly stated the necessity
of a European labour law in order to improve living and working conditions.
Following the Charter of Fundamental Social Rights, the Commission made
several proposals for European directives relating to labour policy. However, all
but two proposals were blocked in the Council, mostly by the United Kingdom.
Resistance of the United Kingdom also prevented an expansion of the EC’s social
competence by the Treaty of Maastricht. Instead, the Social Chapter was adopted,
which did not apply to Great Britain and Northern Ireland in a legally binding way.
As far as the eleven remaining member states at the time are concerned, the Social
Chapter increased the scope of European social policy and, thus, strengthened the
social dimension of the then EU against the economic one. It introduced European
competences in several issue areas of social policy. Furthermore, establishing
citizenship of the Union enhanced the social dimension because it allows all
citizens of the member states to enjoy rights embodied in the Treaties, including
the social provisions (Falkner 1998: 55–69, 78–82, Kleinman 2002: 83–94, Schulte
2004: 84–8).
In 1997, the newly elected British Labour government renounced the opt-out
from the Social Chapter. The Treaty of Amsterdam included the Social Chapter
into in the EC Treaty, established a new title on employment and introduced some
further innovations in social policy, like reinforcement of anti-discrimination
and cooperation in the area of social inclusion. The Treaty of Nice specified the
cooperative measures in the issue areas of social inclusion and modernisation of
social protection systems. Furthermore, the Community Charter of Fundamental
Rights, also adopted at the Nice summit, sets out fundamental rights and freedoms
as well as civil, political, economic and social rights of European citizens and
residents of the EU. Despite the expansion of social rights and the scope of
European social policy, the tension between market-making and market-correcting
measures remains (Barnard 2006: 22–32).
The following section 4.1 shows the use of policy instruments in European
social policy. In European social policy both command and control legislation
and suasive instruments in the form of soft law play a considerable role.
Section 4.2 describes the actor constellations of the policy area by identifying
the cleavage structure of the policy area that is characterised by a horizontal
cleavage between social equity and economic growth as well as by a vertical
cleavage between the European level and the national level. The cleavage
structure is represented by the preferences of the organisations involved in social
policy-making. The situational structures that affect the opportunities of these
organisations are described in the sections 4.3 to 4.5. Section 4.3 describes the
institutions that restrict and enable decision-making. In European social policy,
policy outputs may be adopted via collective agreements by the social partners,
i.e. the representatives of labour and industry, or via legislative procedures
involving the political institutions of the EU. In the latter case, decisions may
be adopted either by qualified majority voting or by unanimity, depending on

the provisions in the EC Treaty. Section 4.4 shows the level of politicisation of
social policy problems. Policy problems are highly politicised if social standards
are at stake. The adoption of non-coercive policy instruments contained in the
autonomous social dialogue and the OMC do not necessarily reduce the high level
of politicisation. Section 4.5 points to external events that affect the choice of
policy instruments in European social policy. While the economic development
has a certain impact on the adoption of policy instruments, the effect of single
incidents and decisions by international organisations are small. Finally, section
4.6 highlights the close connection between characteristics of policy instruments
and the cleavage structure of the policy area.
Policy instruments of European social policy are those policy instruments that
are used in order to reach the aims of the policy area. In general terms, European
social policy aims at social equity and social justice. More specifically, European
social policy aims at improved living and working conditions, employment,
social inclusion, anti-discrimination and a guarantee of social protection and
social security. Political actors may apply all types of policy instruments
described in section 1.1 in order to implement the objectives of European social
policy. However, economic governance instruments are almost absent. Only
the European Social Fund (ESF) provides some financial incentives to develop
human resources in order to increase employment. As far as the remaining types
of policy instruments are concerned, they are all used but to a various extent in
different issue areas. Command and control governance instruments are widely
used in the issue areas of health and safety of workers, working conditions and
equality between women and men. In contrast, suasive governance instruments
prevail in the issue areas of employment, pension and social inclusion, where the
OMC combines suasive governance instruments with legal instruments of soft
law. In these issue areas soft law represents the sole type of legal instruments.
Also framework agreements by the social partners contain a combination of
suasive instruments and soft law. In the issue areas of gender equality, health
and safety of workers and working conditions, policy outputs are adopted in the
form of both soft law and hard law. However, in the latter two issue areas hard
law dominates. Hard law, namely regulations, is also used to coordinate social
insurance entitlements and benefits of migrant workers. Table 4.1 illustrates
the use of governance instruments and legal instruments by giving examples of
policy instruments in European social policy.
The experts interviewed in this study and researchers alike describe the use of
policy instruments in European social policy as just outlined. Furthermore, there
is a widely held view that policy instruments have become less coercive for the
last decade, that is, that suasive instruments and soft law have exceeded command
and control instruments and hard law. However, a predominance of less coercive
Table 4.1 Examples of Policy Instruments in European Social Policy
Working Time ESF
Directive
Hard Law
Parental Leave
Legal Directive
Instruments OMC on Social Inclusion
Social Partner
Soft Law
Framework Agreement on
Telework
policy instruments is not confirmed by the data shown below. As a Commission

official argues, the impression of a shift from coercive policy instruments to less
coercive ones may result from the fact that novel forms of the latter have emerged
recently. Since the Treaty of Maastricht less coercive policy instruments have
been put forward. At the Lisbon summit in 2000, procedures of policy-making
containing suasive governance instruments and soft law were summarised under
the heading OMC. The OMC was explicitly applied to issues of European social
policy. Nevertheless, the emergence of the OMC is not tantamount to a decrease
of command and control instruments and hard law, nor does it mean that soft law
had been absent before.
Command and control governance instruments and legal instruments of hard

law have an affinity with each other. While setting social standards compels the
ultimate addressees of political steering, European directives and regulations oblige
member states to comply with European policy outputs. In European social policy,
command and control instruments are adopted in the form of hard law. The issue
areas where directives have been mainly adopted are health and safety of workers,
working conditions and equality between women and men (Falkner et al. 2005:
48–9). These issue areas witness a number of command and control governance
instruments. Also the European regulations referring to migrant workers contain
command and control instruments. The regulations coordinate migrant workers’
entitlements to benefits from social security schemes. However, they do not intend
to harmonise member states’ social security schemes (Barnard 2006: 210–33).
European directives set minimum standards for health and safety at the
workplace, including standards for the protection from hazardous substances
exposed at work. Specific standards are adopted in order to improve the protection
for pregnant workers, workers who have recently given birth and workers who are
breastfeeding. Health and safety standards are also established for young workers
and for workers with a temporary or fixed-term employment relationship. Command
and control instruments are also used to regulate further working conditions.
European working time standards establish requirements for a maximum weekly
working time, minimum rest periods and adequate breaks, annual paid leave and
night work. Workers employed on a part-time basis have to be treated comparably
to full-time staff on open-ended contracts. Enterprises operating at a Community-
wide scale have to establish a European works council. European regulation ensures
that workers posted to another member state do neither face lower social standards
nor worse working conditions than in their home country. Further standards are
set in respect of employers’ insolvency, transfers of undertakings and collective
redundancies. As far as equality between women and men is concerned, European
policy measures put provisions for equal pay in concrete terms, extend gender
equality beyond the issue of equal pay, and ensure equal treatment in respect of
all kinds of occupational activities. Policy outputs provide for gender equality in
statutory and occupational schemes of social security and establish regulations for
parental leave (Beutler et al. 2001: 585–94).
Suasive governance instruments constitute an element of the OMC and social
dialogue. Both the OMC and social dialogue refer to the whole process of policy-
making including the formulation and adoption of European policy outputs and
their implementation in the member states. As far as the OMC and social dialogue
address the ultimate addressees of political steering, they are characterised
by suasive governance instruments. The OMC does not represent a uniform
method. Rather, there are different OMCs in various policy areas and issue areas.
At the Lisbon summit in March 2000, a number of already existing procedures
of coordination and control were put together under the heading of OMC. The
OMC is characterised by voluntary measures, which ensure subsidiarity and grant
flexibility to the addressees of political steering. Moreover, the OMC aims to
increase the participation in policy-making of both public and public actors from
different levels of governance. As far as governance instruments are concerned, the
OMC relies on common guidelines, codes of conduct, benchmarking, monitoring,
peer review and best practice. In European social policy, OMCs have been adopted
in the issue areas of employment, health care, pension reform and social inclusion
(Wincott 2003: 535–41, Borrás and Jacobsson 2004: 186–94).
Social dialogue describes a tripartite arrangement of policy-making that
involves representatives of governments, labour and industry. In European social
policy, the Council and the Commission, trade unions and employers’ associations
engaged in some tripartite activities since the 1970s. However, until the 1990s the
social partners played only a consultative role. In 1993, the Treaty of Maastricht
gave social dialogue priority over legislation in European social policy. The
Commission has to consult trade unions and employers’ associations before making
a legislative proposal. The legislative procedure is stopped, if the representatives
of labour and industry prefer to negotiate first. If they reach an agreement, it may
be adopted by European law that legally binds member states. Alternatively, the
agreement may be implemented by labour and industry themselves using their

specific procedures and practices in the member states (Falkner 1998: 71–6, 82–4).
It is the latter way of implementing agreements between labour and industry that
represents the suasive governance instrument contained in social dialogue. While
in the aftermath of the Treaty of Maastricht, some agreements between the social
partners were adopted by European law, agreements of that kind became rare in the
following time. Instead, labour and industry made agreements that are supposed
to be implemented autonomously by the social partners. These agreements only
commit members of the signing organisations and do not have any legally binding
effect. Trade unions and employers’ associations made framework agreements on
telework, on work-related stress and on harassment and violence at work. They
further agreed on provisions for lifelong learning, gender equality, prevention of
musculoskeletal disorders and workers health protection associated with the use of
crystalline silica (Leiber and Schäfer 2007: 124–8, Smismans 2008: 171–2).
While there is any number of command and control instruments and suasive
instruments in European social policy, economic instruments are absent, with one
exception. The ESF provides subsidies in order to increase employment. Already
the EEC Treaty signed in 1957 provided for the ESF, which was established in
1960. Since then, financial means from the ESF have steadily increased. At the
beginning of the twenty-first century, they accounted for almost 10 per cent of
the total EU budget. After several reforms, the ESF was newly adjusted for the
period from 2000 to 2006. The ESF aims to develop human resources and to
combat unemployment and social exclusion. In order to achieve these goals, the
ESF promotes equal opportunities in the labour market. Particularly, the access
to the labour market of women and persons at the risk of social exclusion should
be improved. Active labour market policies should help young people to find a
job and bring long-time unemployed and persons who abstained from the labour
market for a period back into work. Vocational training and fostering skills and
knowledge should enable people to react to changed conditions of production
processes and to requests of labour market (Falkner 2004: 12–16, 2006: 84–5).
The ESF provides financial incentives to the development of human resources.
However, it does not have a considerable redistributive effect. Kleinman (2002:
114–19) argues that given the socio-economic differences in the member states,
the ESF is too small in scale to result in a considerable redistribution of values.
Legal Instruments
The governance instruments described in the previous paragraphs are adopted by

legal instruments. Both hard law and soft law are used in order to coordinate and
control social policy issues in the member states. Like in the case of governance
instruments, the use of legal instruments differs from one issue area to another.
Directives are the dominant legal instrument in the issue areas of health and
safety of workers, working conditions and equality between women and men.
Regulations are used to coordinate social security systems in respect of migrant
workers and to administer the ESF. An agreement between the social partners may
be adopted by either hard law or soft law. In the former case, the agreement is
adopted by a Council directive, in the latter case the agreement is backed by soft
law or political institutions even refrain from making any contribution. Where the
OMC is used, any binding commitment is absent. The OMC combines suasive
governance instruments with the legal instrument of soft law.
In European social policy 284 policy outputs comprising both hard law
and soft law were adopted from 1958 to 2006. During the period, 80 directives
and regulations were passed. Further 88 legal acts were adopted that amend or
geographically expand existing directives and regulations. These legal acts do not
include policy outputs by the Commission that solely specify application rules or
adapt existing legislation to scientific or technical progress. In addition to hard
law, the Council and the Commission adopted 116 non-binding policy outputs
of soft law, which include conclusions, declarations, recommendations and
resolutions. Figure 4.1 shows the ratio of hard law to soft law in European social
policy. All three kinds of policy outputs, i.e. original directives and regulations,
amendments of legal acts and soft law policy outputs, were adopted throughout
the period. Soft law may be regarded as predominant, if legislative amendments
are neglected. However, if legislative amendments are taken into account, hard
law is predominant. In the early days of the policy area, a number of legal acts
were adopted and amended. This legislative activity referred to regulations for
migrant workers. Again at the end of the period, hard law was dominant. Despite
the common view, shared by political actors and researchers alike, that the use of
soft law has increased, the figures do not contain any non-binding policy output
for the years 2005 and 2006.
The figures are based on a counting of social policy outputs recorded in
the Celex-database and the Eur-Lex-database. Both Celex and Eur-Lex rely
on the same database and the same classifications. When interpreting the data,
shortcomings of the data have to be kept in mind. In Celex and Eur-Lex single
policy outputs may be assigned to the wrong policy area. While policy outputs
wrongly assigned to social policy were sorted out, social policy outputs wrongly
assigned to other policy areas may have been overlooked. However, there is not
an indication that this shortcoming results in a systematic distortion of the ratio of
hard law to soft law displayed in Figure 4.1. Furthermore, the number of policy
outputs only show how frequently legal instruments of a certain type are used.
It is neither synonymous with the scope of regulatory activities nor with their
substantial relevance to the coordination and control of social policy issues in the
member states. In European social policy, both hard law and soft law are used in
political steering to a comparable quantitative extent.
The data showing the proportions of legal instruments is mainly based on
Falkner’s work on the continuity and change of governance modes in European
social policy. Falkner (2004: 7–37, 2006: 82–91) further analyses the development
of policy outputs in single issue areas of European social policy. As already
mentioned regulations are used in order to coordinate national social security
Figure 4.1 Ratio of Hard Law to Soft Law in European Social Policy
Source: Falkner (2004: 9, 17, 27, 2006: 87, 90), Celex/Eur-Lex
systems in respect of migrant workers. Three regulations were adopted that

ensure migrant workers’ entitlement to social security systems and guarantee
their benefits. By the end 2002 these regulations had been amended 62 times.
A number of directives were passed in the issue areas of health and safety of
workers, working conditions and gender equality. As far as both health and safety
of workers and working conditions are concerned, binding legal acts outnumber
non-binding policy outputs by far. In contrast, in the issue area of gender equality
the amount of soft law exceeds the amount of hard law even if original directives,
amendments and geographical extensions are added. Finally, there are issue areas
where hard law is absent. These issue areas refer to employment, social inclusion,
family and young, disabled and elderly people.
4.2 Cleavage Structure of Actor Constellations
Policy instruments of European social policy are subject to the political contest.
Organisations search for effective solutions to policy problems and struggle to
realise their interest and belief. In a democratic polity, both problem-solving and
the realisation of interests and beliefs necessitate an interaction of political actors.
In order to combat unemployment, social exclusion or discrimination various
actors rely on resources of other actors. The question of whether unemployment is
reduced by further removing barriers to trade or by public intervention in order to
correct market failures induces political conflict between interdependent actors. The
answer to this question depends on the interests and beliefs of the actors involved.
The policy area of European social policy is constituted by those actors who
engage in the adoption of policy outputs that aim at social equity and social justice
in general. The structured interrelationship between these actors is described by
the actor constellation. Matters of interest and belief, like the question of market-
making or market-correcting policy measures to foster employment, shape the
cleavage structure of actor constellations in the policy area (cf. section 1.4.3 and
section 2.1). The cleavage structure of European social policy is characterised by a
conflict between social equity and economic growth on the one hand and a conflict
between the European level and the national level on the other.
Policy-making in European social policy takes place in different arenas. Different
political actors are involved in the adoption of policy instruments to a various extent
depending on whether policy instruments are adopted in the legislative process,
in social partner agreements or in the context of the OMC (Falkner 2000: 716–17,
Borrás and Jacobsson 2004: 197–8). Nevertheless, a group of actors is identified
that constitutes the policy area. The experts interviewed in this study concurrently
list the same organisations after having been asked the actors involved in European
social policy. Also researches studying European social policy arrive at the same
set of political actors relevant to the adoption of policy instruments (Leibfried
and Pierson 1995, Steinmeyer 1997: 40–5, Falkner 1999, Eichhorst 2000: Chapter
4). The following organisations are involved in adopting policy instruments in
European social policy: the European Commission, the European Parliament, the
member states represented in the Council of the European Union, trade unions and
employers’ associations. At the European level, trade unions are represented by
their umbrella organisation the ETUC. The main European umbrella organisations
of employers’ associations are UNICE/BusinessEurope and the European Centre
of Enterprises with Public Participation and of Enterprises of General Economic
Interests (CEEP). Further organisations involved in European social policy are the
Committee of the Regions, the European Economic and Social Committee and the
Social Platform, the umbrella organisation of European social NGOs.
The organisations involved in adopting policy instruments in European social
policy are highly aggregated entities. They are composed of organisations that differ
in their functional competency, ideological alignment and national affiliation. The
European Commission consists of functionally differentiated DGs. The European
Parliament comprises political parties that represent the ideological spectrum. The
Council is constituted by member states. The Committee of the Regions represents
regional and local bodies of the member states and the European Economic and
Social Committee encompasses employers, employees and various other interest
groups. The umbrella organisations of trade unions, employers’ associations and
NGOs comprise national member organisations, respectively. Hence, the cleavage
structure does not only occur between the highly aggregated political actors but
also within these organisations. The internal diversity of organisations is taken
into account, when the cleavages between social equity and economic growth and
between the European level and the national level are described below. Nevertheless,
despite internal differences, the organisations involved in European social policy-
making arrive at peculiar policy positions on the use of policy instruments. The
organisations’ preferences for policy instruments vary in their vagueness. While
trade unions, employers’ associations and NGOs have a concrete preference for
certain types of policy instruments, the preferences of the political institutions
of the EU are more ambiguous. The ambiguity may be interpreted as a result of
reconciling diverging positions within the respective organisation.
Social Equity vs. Economic Growth and European Level vs. National Level
The organisations involved in social policy-making at the European level form

a specific actor constellation. The actor constellation of European social policy
is shaped by two cleavages. There is a horizontal cleavage between social equity
and economic growth and a vertical cleavage between the European level and the
national level. The horizontal cleavage runs between left-wing parties and trade
unions on the one hand and right-wing parties and employers’ associations on
the other. While the former promote social equity, the latter advocate economic
growth. However, left-wing parties and trade unions are also concerned with
economic growth and right-wing parties and employers’ associations are not
indifferent to questions of social equity. The main issue of conflict refers to
the relation between social equity and economic growth. On the one hand, left-
wing parties and trade unions argue that market-correcting policy measures are
necessary in order to foster social equity because the wealth created by economic
growth is not distributed evenly in society. On the other hand, right-wing parties
and employers’ associations argue that public policy measures have to ensure
the competitiveness of European companies and the functioning of the market
in order to push ahead economic growth. Economic growth is considered both a
source and a prerequisite of social welfare. The vertical cleavage addresses the
question whether issues of social policy should be tackled at the European level
or at the national level. Furthermore, it deals with the question to which extent
European policy measures should intervene in welfare regimes of the member
states. The cleavage runs between member state governments and political
institutions of the EU that are not constituted by national or sub-national actors,
namely the European Commission and the European Parliament.
The two cleavages of European social policy are examined by Eichhorst
(2000), who analyses policy-making that deals with the social policy problem of
guaranteeing social protection and proper working conditions to posted workers.
The analysis includes the adoption and implementation of the directive on the
posting of workers (96/71/EC). He argues that market-correcting social policy
regulation via positive integration relies on special conditions that are rarely
met. Institutions and political conflict are considered as main factors affecting
the opportunity of social protection measures at the European level. In order to
structure his empirical analysis on a theoretical basis, Eichhorst (2000: 51–69)
argues that political conflict in European social policy is shaped by two cleavages.
On the one hand, there is the cleavage between social protection and the free market
economy. On the other hand, there is the cleavage between the supranational level
of the EU and the national level of the member states. Diverse interests and beliefs
of member states make governments use institutional veto points and impede the
adoption of European social legislation. The two cleavages do not only apply to
member state governments but also to interest groups.
Labour costs, including the wage level, are at the heart of the cleavage
structure. High social standards are supposed to result in high labour costs because
employers have to pay for social provisions like safety measures at the workplace
or contributions to social security systems. Thus, as far as the political contest is
concerned, high standards of social protection and high labour costs on the one
hand face competitiveness in a free market economy and low labour costs on the
other. Since the social provisions largely apply to the nation states, the issue of
labour costs also shapes the cleavage between regulation at the European level
and regulation at the national level. Social standards and labour law regulations
differ between member states. Moreover, member states are affected by the
completion of the common market to a various extent. The interests of both
governments and interest groups depend on the national level of social standards
and the consequences that are expected from free trade. Member states with high
labour costs fear competitive disadvantages from removing trade barriers. Both
governments and interest groups of those countries have an interest in establishing
European regulation of high social standards. Vice versa, member states with
low labour costs may profit from the common market in labour-intensive sectors.
Thus, governments and interest groups will prefer market-making measures and
oppose market-correcting regulation at the European level. National governments,
employers’ associations and trade unions form a coalition, if they have a common
interest in the competitiveness of a national economic sector. In addition to
economic concerns, national governments may oppose regulations of European
social policy because they fear a loss of national sovereignty and legitimacy.
Member states are concerned about transferring competences of social policy to
the EU because social policy is closely related to the formation of statehood and
central to the legitimation of the nation state (Eichhorst 2000: 51–69).
Today, social security systems, which protect people against the risk of
invalidity, old age, poverty, sickness and unemployment, constitute the core
of national welfare states. The introduction of social security systems in the
nineteenth century was a result of the legitimacy demands of governing elites.
As Alber (1982: 126–33) shows, governing elites of West European nation states
introduced social security systems in order to weaken the labour movement fighting
for reforms. They sought to integrate workers into the middle classes by granting
social policy provisions in exchange for political loyalty. Social security systems
were more advanced in authoritarian states than in parliamentary democracies.
In the former, legitimacy demands were higher than in the latter. The political
structure of parliamentary democracies corresponded to the objectives of the labour
movement to a greater extent. In a similar vein, Esping-Andersen (1990) argues
that European welfare states resulted from class mobilisation and class coalitions
during state formation and nation-building. Modern social policy was pushed by
a process that made human needs and labour power become commodities. ‘When
labour power also became a commodity, people’s right to survive outside the
market are at stake. It is this which constitutes the single most conflictual issue
in social policy.’ (Esping-Andersen 1990: 35) Influenced by ideological beliefs,
nation states reacted differently to the process of commodification. They provide
welfare by non-market means to a various extent, that is, welfare states differ in
the degree of decommodification. Esping-Andersen argues that welfare states can
be grouped into three types of welfare regimes characterised by the degree of
decommodification. The welfare regimes are labelled conservative or corporatist,
liberal and social democratic.
All founding countries of the EEC are characterised as welfare regimes of the
corporatist type. However, after the accession of the United Kingdom, Ireland and
Denmark had come into force in 1973, the EEC also covered two welfare states of
the liberal type and a social democratic one. Further enlargements increased the
diversity of national welfare states. National welfare states differ in the average
level of taxation and social spending, in the relative weight of various taxes and
social security contributions and in the extent of social transfers and social services.
Furthermore, they differ in general normative assumptions on which functions
should be fulfilled by public organisations and which functions should be fulfilled
privately either by the market or within the family. Given the differences between
national welfare states, a harmonisation of basic structures of national welfare
regimes at the European level would be opposed by both the national governments
and the national electorate (Scharpf 2002: 650–1).
The concern of member states about transferring competences of social policy
from national governments to political institutions of the EU is also reflected in
the choice of legal instruments. Legal instruments address the relation between
the European level and the national level during the implementation of European
policy outputs. While hard law obliges member states to comply with policy goals
and procedures passed by EU political institutions, soft law does not legally bind
member states and, thus, protects their national autonomy. Hard law, including
co-regulation of social dialogue, prioritise the implementation of European policy
goals, while soft law, including policy measures in the context of the OMC, gives
priority to the conservation of national welfare regimes. While legal instruments
address the cleavage between the European level and the national level, governance
instruments refer to the cleavage between social equity and economic growth.
The latter corresponds to the cleavage between left-wing parties and right-wing
parties. Within the European Parliament, political parties differ in their policy
position relevant to issues of social policy. On the left-wing side of the political
spectrum, socialists, social democrats and the greens favour market-correcting
measures in order to achieve policy goals. On the right-wing side of the political
spectrum, conservatives, Christian democrats and the liberals tend to reject public
interventions into the market. As far as anti-discrimination and civil rights are
concerned, the position of the liberals is on the left-wing side. The other parties
keep the policy position on the political spectrum that they also take in respect of
the question of market interventions (McElroy and Benoit 2007: 11–14).
There is an ideological correspondence between socialists, social democrats
and trade unions on the one hand and between conservatives, Christian democrats
and employers’ associations on the other, as several interviewees confirmed.
Nevertheless, they also mentioned occasional agreements that bridge the gap
between the two political camps. While the differences between the ETUC and
UNICE/BusinessEurope are huge, the trade unions agree with the umbrella
organisation of public enterprises, the CEEP, from time to time. There is also an
overlap between the view of the trade unions and the view of the employee wing of
the Christian democrats. Furthermore, members of the Committee on Employment
and Social Affairs of the European Parliament are more concerned with social
equity than their party colleagues, regardless of their party political affiliation.
Finally, the social partners of the same country may share the same policy
position at the European level. However, despite occasional agreements between
organisations of the two camps and despite differences within the respective camp,
most of the time, there is a common position of trade unions and of employers’
associations, respectively. In the end, there are two opposing interest groups in
European social policy, namely labour on the one hand and industry on the other
(Falkner 2000: 716–17).
Organisations’ Preferences for Policy Instruments
In spite of instances where organisations or members of organisations cross the

cleavage structure of social policy, the political institutions of the EU and the
umbrella organisations of interest groups arrive at general policy positions that
reflect the cleavage structure described above. Furthermore, the organisations’
preferences for policy instruments also reflect the cleavages between social equity
and economic growth and between the European level and the national level. Trade
unions, the Social Platform and the European Parliament advocate command and
control instruments that oblige the ultimate addressees of political steering to comply
with social standards, whereas employers’ associations prefer suasive instruments
or even the avoidance of any regulation in order to grant flexibility to enterprises.
EU legislation is most strongly promoted by the European Parliament, whereas
member states represented in the Council of the EU are more inclined towards soft
law. As far as preferences for less coercive policy instruments are concerned, there
is an overlap between organisations’ preferences that correspond to an overlap
of the two cleavages. The Council supports soft law and social dialogue. Both
policy instruments strengthen policy-making at the national level insofar as they
do not include legal provisions binding on the member states. Soft law and self-
regulation by social dialogue is also supported by employers’ associations. Neither
soft law nor self-regulation sets binding standards for industry in the member
states. Moreover, the social partners consider social dialogue as a valuable policy
instrument. However, while trade unions favour social dialogue in the form of co-
regulation, the employers’ associations prefer self-regulation. Thus, the different

views on governance instruments are mirrored within social dialogue.
All political institutions of the EU advocate that a mix of policy instruments
should be used in order to achieve social policy goals, that is, the whole range of
policy instruments available in European social policy should be considered when
adopting policy outputs. Furthermore, all actors welcome measures that aim at
a more effective implementation of existing legislation. However, organisations
differ in respect of the extent to which various policy instruments should be used.
The Commission argues that all policy instruments at the disposal in European
social policy should be considered. In contrast, the European Parliament argues
that legislation should be given priority and soft law should only supplement hard
law, whereas the Council claims that European legislation has to respect national
peculiarities and that also soft law has to be considered. The Committee of the
Regions and the European Economic and Social Committee also acknowledge the
use of an array of policy instruments but demand an involvement of their member
organisations in European policy-making, namely sub-national authorities and
the social partners, respectively. Organisations prefer different policy instruments
depending on the characteristic of the policy instrument and the purpose of political
steering. The lowest common denominator all actors involved in European social
policy agree with is that minimum legal standards should be set in the areas of
gender equality and health and safety at the workplace.
The preferences of the European Commission for certain policy instruments in
social policy are embedded in the general debate about European governance and
better regulation The Commission advocates policy instruments in accordance with
the principle of subsidiarity and calls for an effective implementation of European
policy outputs in the member states (Commission of the European Communities
2001a, 2002a). Better regulation is supposed to increase the effectiveness and
efficiency of political steering. It includes measures of coordination between the
EU and both member states and the ultimate addressees of political steering as
well as impact assessments that monitor changes in the regulatory environment
and scrutinise pending legislative proposals. The Commission (2005b) considers
European legislation as necessary to foster growth and employment and to guarantee
social protection. However, the Commission further argues that command and
control legislation does not represent the appropriate policy instrument in any
situation. In particular, legislation may create economic costs that hinder growth.
Hence, co-regulation of public authorities and private organisations as well as self-
regulation by industry should be considered as alternative forms of coordination
and control.
The Commission (1998, 2005c, 2006b) calls for a mix of policy instruments
in order to implement its social agenda and to meet the social challenges.
European legislation should set minimum standards that guarantee the freedom of
movement for workers, fair and decent working conditions, including health and
safety protection, and equal opportunities for women and men. The ESF should
provide financial support and incentives in order to foster education, training
and employment. Further financial means should be provided by the European

Globalisation Adjustment Fund and the Community Programme for Employment
and Social Solidarity (PROGRESS). Finally, social policy goals should be achieved
by suasive instruments, including social dialogue as well as benchmarking, peer
review and good practice within the OMC.
The European Parliament (2006d) approves the Commission’s plea for more
effective regulation. It supports measures enhancing the effectiveness of existing
legislation and the use of a mix of policy instruments. As the Commission, the
European Parliament (2006b) calls for targeted and well-considered legislation,
including the necessity of impact assessments, and grants a vital role to social
dialogue. Nevertheless, the Parliament stresses that the adoption of soft law
and suasive instruments as well as simplifying and updating existing legislation
must not result in a cutback of regulation nor in a dilution of legal standards of
European social policy. A case in point is the debate on the OMC. The Committee
on Employment and Social Affairs of the European Parliament (2003c) argues
that the OMC risks marginalising democratic control by bypassing the European
Parliament. The European Parliament supports the Commission’s view stated
in the white paper on European governance (Commission of the European
Communities 2001a) that the OMC must not substitute legislation but may
represent a useful complement to command and control instruments and hard
law. While acknowledging certain merits of the OMC, the European Parliament
demands that the OMC should be used parsimoniously both in scope and
magnitude. Legislation constitutes its preferred legal instrument. Command
and control legislation is supposed to be both democratic and effective. It is
democratic because the adoption of social standards in the form of hard law give
a pivotal role to the European Parliament as a democratically legitimised political
institution. Furthermore, legislation is subject to judicial control. Command and
control legislation is effective because it guarantees social rights in the member
states by compelling national governments to comply with European minimum
standards (European Parliament 2000).
When the Council of the European Union (2006) responded to the green paper
of the Commission (2006b) on modernising labour law, member states’ delegations
also emphasised the need for minimum legal standards. In accordance with the
concept of flexicurity, they argue that labour market flexibility and legal standards
for working conditions have to be pursued simultaneously in order to foster growth
and employment. However, while minimum legal standards at the European level
are considered necessary, member states hasten to add that specific characteristics
of national labour markets have to be taken into account. Furthermore, the Council
calls for an effective implementation of European legislation and a meaningful role
of the social dialogue. In a similar vein, the Council of the European Union (2005b)
advocates various policy instruments, when it addresses the mid-term review of
the Lisbon strategy. Effective implementation of legal acts should be ensured,
particularly by focusing on better regulation. Financial means should be provided,
mainly by the ESF in order enhance employment and equal opportunities. Social
dialogue should be considered and the OMC should be used in order to achieve
policy goals.
Two further political institutions of the EU advocate a mix of policy
instruments. The Committee of the Regions and the European Economic and Social
Committee emphasise the need for legislation in order to guarantee minimum
social standards, which, however, should be complemented by further policy
instruments. In particular, they favour ways of political steering that involve their
member organisations, i.e. local and regional authorities and the social partners,
respectively. The Committee of the Regions (2002, 2005, 2008) advocates that
the whole range of policy instruments should be used in order to achieve the
objectives of European social policy but also emphasises that the principle of
subsidiarity should be taken into consideration. The Committee of the Regions
calls on the Commission to implement the flexicurity concept by European
legislation wherever possible but stresses that hard law should grant flexibility
to national and sub-national authorities. The concept of flexicurity should not
be implemented uniformly in order to take national characteristics of the labour
market into account. Nevertheless, minimum social standards at the European
level are regarded as necessary to reduce imbalances between welfare provisions
of the member states. The Committee of the Regions also welcomes impact
assessments to enhance the effectiveness of regulation but calls for recognising the
impact on the local and regional level. Moreover, the effectiveness of legislation is
supposed to be enhanced, if local and regional actors as well as the social partners
are involved. Social dialogue is also regarded as a valuable governance instrument
in its own right. Finally, financial means and the OMC should be used to foster
employment and social inclusion. Again, the allocation of financial means and
the use of the OMC should involve local and regional authorities and take their
concerns into account.
The European Economic and Social Committee (2003, 2007a, 2007b) also
calls for a mix of policy instruments in order to achieve social policy objectives.
Furthermore, it stresses social dialogue as a valuable governance instrument. Social
dialogue should be used both as co-regulation, when social partner agreements are
adopted by European legislation, and as self-regulation, when the social partners
agree on policy objectives and autonomously implement them in the member
states. Social dialogue is supposed to enhance regulation. Moreover, social dialogue
is considered crucial to the implementation of labour market reforms because it
involves all actors responsible for economic development and employment. The
central role of social dialogue does not render command and control legislation
unnecessary. European legislation has to be adopted in order to guarantee gender
equality and anti-discrimination and to ensure social standards in respect of working
conditions, health care and protection for employment. Employment protection
and minimum social standards guaranteed by a legal framework are considered a
prerequisite for enabling a flexible labour market that fosters productivity, innovation
and competitiveness. Nevertheless, legislation should grant enough leeway during
implementation in order to allow the social partners to find appropriate solutions to
policy problems. Existing legal acts should be implemented effectively. Therefore,

the European Economic and Social Committee also supports impact assessment by
the Commission. As far as legal instruments are concerned, European legislation
and soft law in the context of the OMC should be used in a balanced manner.
Although there are doubts about the effectiveness of the OMC, because member
state governments are not obliged to comply, the OMC should be taken into account
as a legal instrument because the diversity of national welfare states limit the scope
for European social legislation.
Trade unions and employers’ associations are members of the European
Economic and Social Committee but also represent autonomous actors of
European social policy. Both trade unions and employers’ associations welcome
the Commission’s efforts of better regulation (cf. above) and emphasise that social
dialogue should be promoted as a policy instrument to coordinate and control
labour markets (ETUC et al. 2007). Regardless of this common view of social
partners, trade unions and employers’ associations differ in their preferences on
policy instruments to achieve objectives of European social policy. The ETUC
(2003, 2007) supports command and control legislation and social dialogue in
order to achieve social equity. European social standards should prevent a race
to the bottom where member states lower national social standards aiming to
gain competitive advantages. Moreover, the EU should harmonise living and
working conditions at a high level. Employment protection legislation and labour
market policies are supposed to ensure employment and promote upward mobility
in society. The ETUC argues that legal provisions do not hamper dynamics of
the labour market but favour investments in innovations and in human capital.
However, lower employment protection legislation reduces protection of workers
and encourages precarious employment relationships. Therefore, the ETUC
advocates a further development of European labour law. Besides legislation,
policy objectives should be achieved by social dialogue. Agreements between the
social partners are considered an effective governance instrument in order to meet
the current and future challenges of employment, growth, productivity, innovation
and competitiveness. Finally, employment and social welfare should also be
fostered by providing financial means of the ESF.
In contrast to trade unions, employers’ associations reject command and
control legislation and prefer suasive instruments and soft law. The CEEP (2005,
2007) considers self-regulation by social dialogue the key policy instrument to
provide social welfare in the EU. Any interference into autonomous agreements
of the social partners by other societal or political actors should be omitted.
The CEEP worries about economic competitiveness and argues that social and
macro-economic conditions in the EU must not hinder enterprises to cope with
international competitors. However, the CEEP also emphasises the need of
providing social services of general interest to combat poverty and social exclusion
and acknowledges that legislation contributed to anti-discrimination and gender
equality in the EU. Other employers’ associations focus on the free market and
on enterprises’ benefits to a larger extent than the CEEP. In a common message
of 18 European business federations (Committee of Professional Agricultural

Organisations in the European Union et al. 2005), employers’ associations,
including UNICE but without the CEEP, argue that societal wealth is created by
private businesses. Only private enterprises are supposed to ensure employment in
the long-term. Hence, creating favourable economic conditions for businesses has
to be the overall goal of policy-making. The employers’ associations call for an
effective implementation of market-making EU legislation that aims at removing
barriers to trade. Furthermore, they complain about high levels of social and
environmental standards in the EU that are supposed to result in a competitive
disadvantage against emerging economies like China and India.
UNICE (1999, 2004) identifies unemployment as the main economic and
social problem in Europe. It argues that unemployment is caused by a defective
and unsuited way of political steering and by specific problems in the nation states.
Therefore, UNICE welcomes efforts of better regulation interpreted as a reduction
of command and control legislation and an extension of self-regulation and co-
regulation. Employment is supposed to increase as a result of economic growth
and an enhanced competitiveness of companies in the EU. Protection rights for
workers are meant to distort market competition by maintaining unproductive
activities and, thus, to hamper the creation of new jobs. UNICE complains that
European social policy relies on directives to an too large extent. Instead, priority
should be given to self-regulation of the social dialogue. Furthermore, UNICE
argues that European legislation should primarily be market-making. Market-
correcting measures should be pursued only under certain conditions. In the
issue areas of gender equality and health and safety at the workplace European
legislation is considered necessary in order to ‘prevent unfair competition based
on discrimination or on excessively low health and safety protection standards’
(UNICE 1999: 12). Nevertheless, UNICE rejects a harmonisation of national
social policy provisions by European legislation. Rather, competition between the
member states is supposed to result in a convergence towards the most successful
practices of social policy.
The Social Platform disagrees with the employers’ associations. The Social
Platform (2004, 2007a, 2007b) argues that command and control legislation is
required in order to guarantee social equity in the EU. The Social Platform argues
that market mechanisms do not necessarily result in employment and social welfare.
Nor are social policy objectives, like decent working conditions and gender equality,
supposed to result from economic growth. Thus, European social policy must
not rely on market-making measures but require active interventions into society
and the economy in order to guarantee social standards. European labour law is
considered an effective policy instrument to protect individual and collective social
rights. Command and control instruments and hard law are regarded as necessary to
ensure decent working conditions, gender equality and anti-discrimination but also
to foster employment and social inclusion. Further impact assessment is welcomed.
In addition to effective legislation, the EU should provide further financial means,
mainly by the ESF, in order to foster social equity.
4.3 Institutions
The actor constellation of European social policy is shaped by two cleavages,

as the previous section has shown. Diverging interests and beliefs of political
actors, including their diverging preferences for specific policy instruments,
represent the cleavages structure comprised by the two dimensions social equity
vs. economic growth and European level vs. national level. Whether political
actors are capable of realising their interests and beliefs during policy-making
depends on institutions. Institutions, conceived as boundary rules and decision
rules, affect the opportunities of political actors to shape public policies.
Boundary rules define the issues dealt with in a policy area and determine the
actors involved. Decision rules provide actors with the possibility to adopt or
to block decisions (cf. section 1.4.2). At the European level, the EC Treaty,
formerly the EEC Treaty, provides both boundary rules and decision rules. The
EU does not enjoy a general competence to adopt legislation. Rather, member
states conferred powers to the EU in certain policy areas and certain issue areas.
The specific competences of the EU are enumerated in the Treaties. Several
Treaty articles provide a legal basis for adopting legislation in issue areas of
European social policy. Furthermore, in other issue areas of social policy, the
Treaty provides for the adoption of soft law (Barnard 2006: 63–5, 80–1, 109–10).
Regardless of the legal form, the adoption of European policy outputs requires
a legal basis in the Treaties. If the Treaties do not provide for adopting policy
outputs in social policy, neither EU hard law nor EU soft law may be passed in
this policy area (Senden 2004: Chapter 7).
Extension of Competences and Qualified Majority Voting
The competences of the EU in the area of social policy had been extended gradually.
Also the decision rules had been changed gradually from unanimity to qualified
majority voting in several issue areas. Since 1993 the EC Treaty has provided
for collective agreements by the social partners, establishing social dialogue
as an alternative to policy-making by legislation initiated by the Commission
and adopted by the Council and the European Parliament (Falkner 1998: 55–60,
81–3, Falkner et al. 2005: 41–5). When the EEC Treaty came into force in 1958,
competences in social policy largely remained at the national level. Only social
policy provisions related to the free movement of workers could be passed at the
European level. Those provisions could be passed by qualified majority voting.
Further legal acts of social policy could only be adopted, if they were related to
the common market. In this case, decision-making required a unanimous vote
in the Council. In 1987, the Single European Act changed the decision rule for
those legal acts that aim at establishing the common market from unanimity to
qualified majority voting. Furthermore, it introduced a European competence for
the issue area of health and safety of workers in Article 118a of the EEC Treaty
(now Art. 137 TEC) and also provided for decisions by qualified majority voting
in this issue area. Nevertheless, the decision rule for legal acts based on the
flexibility clause of Article 235 of the EEC Treaty (now Art. 308 TEC) was not
changed. Those legal acts still require unanimity.
In 1993, the Treaty of Maastricht extended Community competences to a
number of social policy issue areas. It established a legal basis for the adoption
of legal acts that refer to working conditions, the information and consultation
of workers, the integration of persons excluded from the labour market, and the
equality between women and men with regard to labour market opportunities
and treatment at work. Legal acts in those issue areas may be adopted by
qualified majority voting. Moreover, the EU got competences in the areas of
social security and social protection of workers, protection of workers where
their employment contracts are terminated, the representation and collective
defence of interests of workers and employers, and conditions of employment
for third country nationals legally residing in Community territory. Legislation
in those issue areas require a unanimous vote in the Council in order to be
adopted. In all issue areas mentioned, regardless of whether they are subject to
qualified majority voting or to unanimity, the political institutions of the EU may
set minimum social standards, which prohibit member states from falling below
these standards but allow more stringent protective measures at the national
level. The extension of Community competences in the area of social policy
did not apply to the United Kingdom and Northern Ireland. However, when
in 1997 the British Labour government renounced the opt-out from the Social
Chapter, which was removed from the main body of the Treaty of Maastricht, the
extension became legally valid in all member states.
The Treaty of Amsterdam extended Community competences further but
to a lesser extent than the Treaty of Maastricht. The Treaty of Amsterdam
introduced a legal basis for non-binding measures of coordination. It provided
for the adoption of soft law by qualified majority voting in the issue areas of
employment, social inclusion and gender equality. The latter to a certain extent
overlaps with the provision of gender equality in respect of treatment at work
and labour market opportunities already contained in Article 137 (1) of the EC
Treaty. Further measures against discrimination based on sex, age, disability,
religion, belief, sexual orientation and racial or ethnic origin could be adopted
by unanimity. The Treaty of Nice, which came into force in 2003, allowed that
non-binding policy measures of anti-discrimination may be passed by qualified
majority voting. Moreover, qualified majority voting also applies to the areas
of social inclusion and modernisation of social protection systems. However,
measures in these two areas have to aim at encouraging cooperation between
member states and must not seek to harmonise national regulations. The Treaty of
Nice introduced social inclusion and modernisation of social protection systems
into the legal provisions of Article 137 (1) of the EC Treaty but restricted EU
policy measures in these two issue areas to soft law (Falkner 1998: 55–60, 81–3,
Falkner et al. 2005: 41–5).
Legislative Procedures and Collective Agreements of Social Partners
While competences laid down in the Treaties determine which social policy
problems may be tackled at the European level, decision rules define the mode
of decision-making, in this case represented by qualified majority voting and
unanimity, and the procedure of policy formulation. In European social policy
there are two routes to the adoption of legislation. European legal acts of social
policy may be adopted either by legislative procedures or by collective agreements
of social partners (Falkner 2000: 716–19, Barnard 2006: 84–93). Both routes
of policy formulation commence with an initiative of the Commission. The
Commission has to consult the social partners both before and after submitting
the legislative proposals. After the second consultation, employers’ associations
and trade unions may jointly choose whether the social policy problem at stake
should be tackled by a legislative procedure or by a collective agreement of social
partners.
If employers’ associations and trade unions do not inform the Commission that
they seek an agreement by collective negotiations, the Commission may draft a
legislative proposal. The proposal is subject either to the consultation procedure or
to the co-decision procedure, depending on the Treaty provisions. In the consultation
procedure, the Commission submits the legislative proposal to the European
Parliament and to the Council. However, the European Parliament has only a
consultative role. The Council has to decide by unanimity in order to adopt an legal
act. As already described above, the consultation procedure and unanimous voting
applies to the issue areas of social security and social protection of workers, protection
of workers where their employment contracts are terminated, the representation
and collective defence of interests of workers and employers, and conditions of
employment for third country nationals legally residing in Community territory. In
contrast, qualified majority voting is an element of the co-decision procedure as it
applies to the issue areas of health and safety of workers, working conditions, the
information and consultation of workers, the integration of persons excluded from
the labour market, and the equality between women and men with regard to labour
market opportunities and treatment at work. In the co-decision procedure (cf. section
3.3), both the Council and the European Parliament may amend the Commission’s
proposal. In contrast to the consultation procedure, the European Parliament has
the role of a co-legislator. Legal acts may be adopted by an absolute majority in the
European Parliament and a qualified majority in the Council.
A further legislative procedure was represented by the cooperation procedure.
The cooperation procedure gave a greater role to the European Parliament than
the consultation procedure but a lesser role than the co-decision procedure. In the
cooperation procedure, the European Parliament did not have the power to veto a
legislative proposal but was allowed to amend the proposal. The Commission was
free to either accept or to reject the amendment. Then, the Commission passed
the proposal on to the Council. The Council could adopt the legal act by qualified
majority voting, if it agreed to the amendment of the Parliament. However, if
the Council rejected the Parliament’s amendment, the adoption of the legal act
required unanimity. The cooperation procedure was abolished by the Treaty of
Amsterdam, with one exception. It still applies to decisions on EMU.
A legislative procedure does not commence, if the social partners agree on
negotiations and inform the Commission after the second consultation that they
pursue a collective agreement. Trade unions and employers’ associations are free
to lay down the conditions under which they engage in collective negotiations.
The Commission only calls for the inclusion of those actors in the negotiations
who are affected by an agreement reached by the negotiations. After the social
partners have reached a collective agreement, the agreement is either transformed
into European legislation or implemented autonomously by the social partners in
the member states. The social partners decide on the way the collective agreement
is implemented. They may request the Commission to pass on a proposal to the
Council in order to adopt the collective agreement as a Council decision. The
term ‘decision’ in Article 139 (2) of the EC Treaty has to be interpreted in its
everyday meaning but not in its meaning as a legal form of a European policy
output. Collective agreements may be transformed into European legislation
by any binding legal instrument, i.e. regulations, directives and decisions. In
practice, directives have been regarded as the most appropriate legal form. Thus,
collective agreements of social partners become European legislation binding in
all member states. However, the political institutions of the EU play a minor role
in its adoption. Neither the Commission nor the Council may amend the essence of
a collective agreement and the European Parliament does not formally participate
in the whole process.
As an alternative to the adoption of a collective agreement as European
legislation, the social partners may implement an agreement autonomously without
the involvement of public actors. In this case, the agreement should be implemented
‘in accordance with the procedures and practices specific to management and
labour in the Member States’, as it is stated in Article 139 (2) of the EC Treaty.
The autonomous implementation of a collective agreement represents a suasive
policy instrument. The national social partners are not obliged to implement the
provisions of the agreement nor does an autonomous implementation ensure
that the agreement is applied to all workers. Furthermore, the autonomous social
dialogue does not put any obligation on member states to facilitate, support or
enforce the collective agreement. In this respect, the autonomous implementation
of collective agreements differs from entrusting the national social partners with the
implementation of EU directives. In the latter case, member states are responsible
for an effective implementation of the respective directive. In particular, member
states have to guarantee that the agreement between national social partners cover
the principles and provisions laid down in the directive. Furthermore, member
states have to ensure that the social dialogue agreement that implements the EU
directive applies to all workers in general, that is, that it also applies to workers that
are not union members and to workers employed in a sector that is not represented
in the collective agreement (Barnard 2006: 66–7, 84–93).
Both the legislative procedure and the social dialogue provide interest groups
with the opportunity to influence decision-making. Employers’ associations, trade
unions and NGOs use their ties with the Commission and the national governments
in the Council in order to influence legislation. If the co-decision procedure is
applied, interest groups also exchange expertise and information with members of
the European Parliament in order to promote their interests and beliefs. Although
all interest groups formally enjoy equal rights, UNICE, the CEEP and the ETUC
have an advantage because they have more resources at their disposal than smaller
sectoral organisations and NGOs. Their influence is even greater, if the social
dialogue procedure is applied (Treib and Falkner 2009: 261–5). The introduction
of social dialogue as an alternative to political steering by legislation strengthened
the role of the social partners in the process of policy-making. The Treaty of
Maastricht made the social partners formal actors of European social policy.
Since then, the social partners have had to be consulted, when policy measures
of European social policy are taken. Furthermore, the Treaty of Maastricht gave
priority to collective agreements of social partners over legislation. Legislative
procedures are only commenced, if the social partners do not agree on opening
collective negotiations, or if these negotiations fail (Falkner 1998: 83–4).
The EC Treaty gives trade unions and employers’ associations a central role
in European social policy-making, but does not establish the social partners as
veto players. Employers’ associations and trade unions may prevent legislation
by agreeing on an autonomous social dialogue but they do not have the power
to block any European policy output. While the EC Treaty provides the social
partners with an influential role in social policy-making, it constitutes other actors
as veto players, who may use veto points in the decision-making procedure in
order to block a policy output (cf. section 1.4.2). The Commission may prevent
European regulations by not submitting a legislative proposal. The Council of the
EU also constitutes a veto player. Each member state in the Council may block
legislation, if unanimity is required in the consultation procedure. If decisions may
be taken by qualified majority voting in the co-decision procedure, only a group of
member states may veto a legal act. Whether the European Parliament represents
a veto player depends on the legislative procedure. In the consultation procedure
the European Parliament has only a consultative role, while in the co-decision
procedure the European Parliament may prevent the adoption of a legal act by an
absolute majority of its members.
4.4 Politicisation of Social Policy Problems
While institutions of European social policy, described in the previous section,

define the actors involved in policy-making and provide them with the power to
influence and to block policy outputs, the politicisation of social policy problems
reflects the level of conflict between the actors of the policy area. Policy problems
emerge, if an actor is not capable of achieving a desired state or object without the
support, approval or tolerance of other actors. Furthermore, other actors may control
resources that are needed to achieve the desired state or object or may even cause
the situation that constitutes the problem an actor faces. Hence, policy problems
result from the interdependence of actors. Policy problems are highly politicised,
if problem-solving creates costs and benefits to different people, organisations
and societal groups. In this case, the level of conflict within the policy area is
high. Highly politicised policy problems result in a high level of conflict between
competing interests and beliefs within the policy area. In contrast, the level of
politicisation is low, if policy problems may be solved by mere coordination
measures to the benefit of all actors involved. In this case, the level of conflict
within the policy area is low and interests and beliefs are secondary to decision-
making (cf. section 1.4.2).
The high politicisation of social policy problems is a result of the redistributive
effects of problem-solving in European social policy. European social policy is
dominated by regulatory policies via positive integration (cf. section 2.2). As
redistributive policies, regulatory policies have redistributive effects. Admittedly,
the termination risks confusion. However, while redistributive policies directly
aim at the redistribution of material values as in the case of social security systems,
regulatory policies establish general rules in order to influence individual behaviour.
These general rules also create costs and benefits to different actors (Lowi 1964).
High legal standards of European social policy create additional production costs
to enterprises in those member states that have lower social standards. In contrast,
the harmonisation of social standards at a high level results in an competitive
advantage of enterprises in those member states that already require these high
standards. Furthermore, the regulation of policy issues at the European level that
had formerly been dealt with at the national level transfers competences from the
national governments to the political institutions of the EU. As far as social policy
is concerned, the transfer of competences concerns a fundamental element of the
legitimacy of the nation state. Finally, regulatory policies via positive integration
include a conflict between ideological beliefs. On the one hand, neo-liberals
favour market-making policies that promote economic growth and enterprises’
competitiveness. On the other hand, social democrats call for market-correcting
policies that ensure high social standards and workers’ rights. Nevertheless, there
are also policy issue where the level of politicisation is low. Minimum standards
on health and safety of workers and measures against discrimination in respect of
employment constitute the lowest common denominator between the two opposing
positions (Héritier 1999: 70–2).
As interviewees from both political institutions of the EU and social partner
organisations reported, policy issues of health and safety at the workplace have
not provoked a high level of conflict. There is a consensus that health of workers
should be protected irrespective of other policy goals. People’s health and
economic competitiveness should not be regarded as conflicting goals. This view
is also shared by representatives of the employers’ associations, who, in respect
of other social policy issues, like working time and employee participation in
companies, complain that stringent legal provisions of social policy reduce the
economic competitiveness of enterprises. A number of EU directives were adopted

that establish minimum standards of health and safety at the workplace. European
law provides, for example, the use of personal protective equipment, a maximum
exposure to noise emissions from various physical agents and measures to prevent
musculoskeletal disorders as a result from the manual handling of heavy loads.
As health and safety at the workplace, also issues of anti-discrimination were not
characterised by a high level of conflict. As a Commission official reported in
the interview, in 2000, two directives on anti-discrimination were passed easily.
The racial equality directive (2000/43/EC) and the employment equality directive
(2000/78/EC) combat discrimination on the grounds of age, disability, ethnic
origin, religion, belief or sexual orientation. Besides direct discrimination, the
two directives also protect against the instruction to discriminate, harassment and
indirect discrimination that occurs when a practice seems to be neutral but in fact
disadvantages people on one of the just mentioned grounds. While policy problems
of health and safety of workers and policy problems of anti-discrimination are not
highly politicised, there are a number of issue areas of European social policy that
contain highly politicised policy problems.
Social Standards at Stake
All interviewees were asked which policy issues had been highly contentious.
In their answers, members of various organisations concurringly mentioned four
policy issues. Working time and temporary agency work were described as highly
contentious. Also the services directive, including related provisions in the posting
of workers directive, and the European works council directive were considered as
controversial issues. All four policy issues have in common that social standards
are at stake, either their establishment at the European level or their preservation
at the national level. The establishment of social standards is synonymous with
the use of command and control instruments. In the four instances, command
and control instruments were combined with European legislation. Demands for
both more and less stringent standards, exceptions from legal provisions, and
flexibility granted to the addressees of political steering refer to the use of policy
instruments.
The level of conflict was high, when the working time directive (93/104/EC) was
negotiated. Also the Commission’s proposal for a revised directive (COM(2004)
607 final) resulted in political conflict and a stalemate in the Council. The working
time directive aims at protecting health and safety of workers by setting minimum
standards for the organisation of working time. It compels member states to ensure
a maximum weekly working time of 48 hours on average, including overtime.
Moreover, workers have to be granted at least four weeks paid leave per annum,
a 35 hours rest period per week, a minimum rest period of eleven consecutive
hours per day and a rest break, if the working day is longer than six hours. Finally,
the directive restricts night work to eight hours in any 24-hour period and makes
further provisions referring to night workers and shift workers. Member states
are permitted a number of derogations. They may depart from the provisions, if,
for example, activities require the continuity of production or service, like care
provided by hospitals or press and information services, or if there is a foreseeable
surge of activity, like in agriculture or tourism. Furthermore, the directive does not
apply to the transport sector, activities at sea and doctors in training.
Several derogations and exemptions represented concessions to the position of
the British government. However, despite these concessions, the United Kingdom
was the only member state that did not approve the directive in the final vote
in the Council. The negotiations of the working time directive were shaped by
ideological conflict. The maximum weekly working time of 48 hours was one of
the most contentious issues. It was put forth by the socialist French government.
The British government opposed both the maximum weekly working time and
the legislative proposal as a whole. The British governing party, the Conservative
Party, argued that the organisation of working time does not contribute to the
protection of health and safety of workers but intervenes in matters of employment.
Furthermore, the Tories argued that employment should not be regulated by public
interventions and least of all by European legislation. They considered working
time regulations as a hindrance to economic growth because it is supposed to
impede a flexible adaptation of working conditions to the production processes.
The British government accomplished that individual workers may voluntarily opt
out of the 48 hour week. Furthermore, it accomplished that doctors in training and
workers at sea, including workers on offshore oil platforms, are excluded from the
directive. Greece also supported excluding workers at sea from the directive and
Ireland had a strong reservation about the directive as a whole. However, in the
Council, Greece and Ireland voted in favour of the directive (Schnorpfeil 1996:
141–69, Falkner et al. 2005: 97–9).
The debate in the European Parliament was also shaped by political conflict
between ideological beliefs. Schnorpfeil (1996: 154–9) shows that in the first
reading of the draft directive in the European Parliament, left-wing parties,
i.e. socialists, social democrats and the greens, put forward amendments to the
legislative proposal in order to adopt a more stringent labour law, whereas right-
wing parties, i.e. conservatives, Christian democrats and liberals, opposed more
stringent provisions of working time regulation. However, the amendments of the
European Parliament had not been taken into account by the Commission and
the Council to a considerable extent. The cooperation procedure (cf. section 4.3)
that applied to the negotiation of the working time directive gave the European
Parliament only a consultative role.
The working time directive was amended by directive 2000/34/EC in order
to cover sectors and activities that had been excluded from the original directive.
In 2003, the working time directive was replaced by a new directive (2003/88/
EC), which mainly consolidated existing European law. This directive again was
on the political agenda, when the Commission put forward a proposal to amend
the directive (COM(2004) 607 final). The renewed legislative activity became
necessary because the original working time directive prescribed a review of two
provisions in 2003, namely the reference period for the calculation of the average
weekly working time of 48 hours and the possibility to opt out of the 48 hour
limit. Furthermore, the proposal takes rulings of the European Court of Justice into
account. The European Court of Justice decided that time spent on-call by health
professionals have to be regarded as working time.
The opt-out from the 48-hour week and the regulation of on-call time represented
the most contentious issues of the Commission’s proposal. The positions of the
ETUC and UNICE on the regulation of working time were mutually incompatible.
The CEEP took a position that was situated in between the two other social partner
organisations but more closely towards UNICE, as the Commission described
in its proposal (COM2004 607 final). Since the social partners did not agree on
commencing collective negotiations, the Commission passed the proposal on to
the European Parliament and the Council of the EU (cf. section 4.3). As far as
the issues of opt-out from the maximum weekly working time and on-call time
are concerned, the Commission did not accept the Parliament’s amendments in
its amended proposal (COM(2005) 246 final) but signalled that it is prepared to
explore a possible compromise. However, political conflict between proponents of
a more stringent regulation of working conditions on the one hand and advocates
of a more flexible organisation of working time on the other continued, when
the legislative proposal was passed on to the Council, as BBC News reported on
5 June 2006. The opposing positions of member states resulted in a stalemate.
While some member states supported a repeal of the opt-out from the maximum
weekly working time, other member states demanded to maintain the opt-out. The
British government in particular called for the opt-out. The United Kingdom was
supported by further member states like Germany and Poland.
The stalemate in the Council was not broken, when the working time issue was
debated again in December 2007. At the Council meeting in Brussels the working
time issue was linked to another contentious issue, namely the issue of temporary
agency workers. The Portuguese Presidency expected to gain an added value by
linking the two policy issues in order to achieve a decision on these contentious
issues. However, a decision on working time and temporary agency workers was
postponed (Council of the European Union 2007). Temporary agency work is a
specific form of temporary work. Among the different forms of temporary work,
temporary agency work has been the most contentious policy issue. Temporary
agency work differs from other forms of employment due to its triangular nature
that complicates the relationship between employer and employee. A worker is
employed by a temporary agency that temporarily hires them out to a user company.
However, this user company is responsible for operational procedures and working
conditions at the workplace (European Foundation for the Improvement of Living
and Working Conditions 2006: 1–2).
The regulation of temporary agency work at the European level had been a
contentious issue for over two decades. As early as 1982, the Commission put
forward a legislative proposal for a directive that, however, was never adopted.
Since then, European social policy has witnessed a number of attempts to establish
legal minimum standards against the discrimination of temporary agency workers.

In the 1990, the European Commission put three issues of atypical work on the
legislative agenda: part-time work, fixed-term work and temporary agency work.
The social partners reached an agreement on regulating part-time work and fixed-
term work, respectively. The two agreements were transformed into the directive
on part-time work (97/81/EC) and the directive on fixed-term work (1999/70/
EC). However, the social partners did not settle conflict in respect of temporary
agency work. The negotiations between trade unions and employers’ associations
eventually broke down in May 2001. The main stumbling block was the question,
whether temporary agency workers should be put on equal footing with the workers
of the user company. On the one hand, trade unions demanded an equal treatment
in employment conditions of temporary agency workers and workers of the user
company. Therefore, pay, working time and further employment conditions of
temporary agency workers should be established with reference to a comparable
worker in the user company. On the other hand, employers’ associations did
not accept the notion of a comparable worker in order to establish employment
conditions of temporary agency workers. Rather, employers’ associations
highlighted the benefits for both employees and employers that result from the
flexibility of temporary agency work (European Foundation for the Improvement
of Living and Working Conditions 2001, 2002, 2008).
After the social partner negotiations had failed, the Commission put forward
a draft directive on temporary agency workers (COM(2002) 149 final) that was
amended after the Economic and Social Committee and the European Parliament
had adopted their opinion, respectively (COM(2002) 701 final). The Commission’s
proposal provides that a temporary agency worker must not be discriminated
against a comparable worker in the user company in respect of basic employment
conditions and working conditions. A comparable worker is a worker permanently
employed by the user company who occupies an identical or similar post as the
temporary agency workers, taking seniority, qualifications and skills into account.
Furthermore, the draft directive stipulates measures that improve the situation of
temporary agency workers. User companies, for example, should inform temporary
workers of vacant posts, temporary agencies must not charge workers a fee for
arranging their recruitment, and the temporary workers’ access to training should
be improved. Under certain circumstances specified in the draft directive, member
states may allow exceptions to the equal treatment of temporary agency workers
and permanent staff of the user company.
At the Council meeting in Luxemburg in June 2003, member states did not
settle conflict on the legislative proposal. In 2007, the Portuguese EU Presidency
set the temporary agency workers directive again on the agenda of the Council
of Ministers in Brussels. The issue of temporary agency workers was debated
together with the issue of working time, but a decision was postponed again
(cf. above). The opponents to the legislative proposal were lead by the United
Kingdom that was supported by a few member states, like Germany, Italy and
Malta. The countries opposing the draft directive argue that a binding regulation
of the working conditions of temporary agency workers conflicts with national

strategies to increase flexibility in the labour market. An equal treatment of
temporary workers and permanent employees of a company is supposed to
reduce companies’ capability to flexibly react to changed market conditions. As a
consequence, economic growth is hindered and employment decreases (European
Foundation for the Improvement of Living and Working Conditions 2008). As in
the case of the working time directive, opponents of the temporary agency workers
directive were against European command and control legislation because they
regarded it as a threat to the competitiveness of national industry and economic
growth. In contrast, proponents of the directive consider European command and
control legislation necessary in order to ensure minimum standards of living and
working conditions for workers in the member states.
Also the draft of the services directive (COM(2004) 2 final) put forth by the
Commissioner Frits Bolkenstein gave rise to political conflict (Nicolaïdis and
Schmidt 2007). Trade unions mounted any number of protests against the draft
directive because they feared a loss of jobs and a cutback of social standards.
Several member states worried about a relocation of companies due to foreign
competitors that are able to offer services at a lower price than local businesses.
At the heart of the conflict was the country of origin principle. The country of
origin principle states that entrepreneurs and companies that offer a service in
another country have to operate in accordance with the rules and regulations of
their home country. Hence, the opportunity of the host country to control services
is restricted. While there already had been directives in force that regulate services
in specific sectors, the proposal for the services directive was put forward in order
to establish a general legal framework that applies to any service provided for
economic return. The services directive aims at facilitating the free movement of
services as it is enshrined in the EC Treaty. It contributes to complete the common
market in the realm of services.
Wealthier member states, in particular France and Germany, opposed the draft
directive. They argued that the country of origin principle resulted in an unfair
competition. Service providers from poorer countries gain a competitive advantage,
if they provide services in wealthier countries. Foreign service providers are able
to offer services at a lower price than their competitors in the host country because
they only have to comply with the lower regulatory standards of their home country.
In addition to the conflict between market-making regulation at the European level
and political steering by the nation states, the political debate was also shaped
by a conflict between a social democratic belief and a neo-liberal belief. On the
one hand, social democrats and trade unions argued that the country of origin
principle threatened social standards in the EU. The draft directive encourages the
exploitation of workers from poorer member states and impedes enhancing social
standards in their home countries. On the other hand, neo-liberals argued that host
country-control was tantamount to the protection of the national economy that
hindered the functioning of the internal market. Nevertheless, fostering economic
competition by completing the common market is supposed to result in economic
growth, lower the prices of services, and enhance their quality, which benefit
consumers.
The opposition to the proposal for the services directive continued. However,
in 2006, the Council and the European Parliament agreed on a revised draft and
adopted the services directive (2006/123/EC), which came into force at the end of
the year. The country of origin principle was abandoned. Furthermore, member
states maintain more competences than were conceded to them by the draft
directive. While the draft directive only excluded lotteries from the scope of the
directive, the adopted services directive excludes a number of services, which were
particularly contentious. The services directive also allows national governments
to restrict activities of foreign service providers on the grounds of public health,
national security and environmental protection. However, further justifications
for national regulation, as consumer protection and social policy, were not
supported by a majority of the members of the European Parliament. During the
legislative process, several member states, namely the United Kingdom, Spain,
the Netherlands, Poland, the Czech Republic and Hungary, called for more liberal
elements in the directive in order to foster the functioning of the internal market.
Nevertheless, when the directive was adopted in the Council, only Lithuania and
Belgium abstained from the decision (Nicolaïdis and Schmidt 2007).
The conflict between proponents of home-country control and advocates of
host-country control also rose in the context of the directive 96/71/EC concerning
the posting of workers in the framework of the provision of services. The directive
sets minimum standards for working conditions of posted workers. Posted workers
are workers who are temporally posted by their company to another member state
in order to carry out their work within this member state. Member states have to
ensure that the same working conditions apply to posted workers and workers of
the host country. Thus, the posting of workers directive applies the principle of
host-country control. A communication issued by the Commission (2006a) in order
to guide implementation of the posting of workers directive by the member states
provoke resistance from the European Parliament. In a resolution, the European
Parliament (2006c) accused the Commission of undermining host-country control
and thus threatening both a fair competition within the EU and the protection of
employees.
Diverging views on the way of political steering have also characterised
the policy issue of employee participation in multinational companies. The
European works council directive (94/45/EC) aims at improving employees’
right to information and consultation by providing that every Community-scale
undertaking and every Community-scale group of undertakings with at least 1,000
employees within the EU and a further minimum of 150 employees in at least two
member states has to establish a European works council or another procedure
for informing and consulting employees. When the directive was negotiated, the
social partners did not agree on a common proposal, social democrats and socialists
opposed Christian democrats and conservatives in the European Parliament, and
the British government sought to block the directive in the Council. Already earlier
directives dealing with European structures of employee participation resulted in

a high level of conflict among the actors involved (Schnorpfeil 1996: 191–223,
Müller and Platzer 2003: 60–8).
In Article 15, the European works council directive states that the Commission
has to commence a consultation process not later than September 1999 in order to
review the operation of the directive. Eventually, in April 2004, the Commission
started the review process. After the consultation of the social partners, trade
unions and employers’ associations did not reach a common position. While the
trade unions called for more stringent provisions in the directive, the employers’
associations rejected any intensification of legal provisions. On 11 April 2008,
the ETUC (2008) and BusinessEurope (BusinessEurope/UEAPME/CEEP 2008)
blamed each other for the failure of social partner negotiations. Nevertheless, both
organisations proposed different ways of a further proceeding. On the one hand,
trade unions support that the Commission proceeds with a legislative revision of
the directive. On the other hand, employers’ associations object to a legislative
revision and express the hope of resuming social dialogue.
Social Dialogue and OMC
Besides conflict about policy goals, the opposed positions of trade unions and
employers’ associations represent conflict about policy instruments. While trade
unions support policy instruments that compel the addressees of political steering
to comply with social standards, employers’ associations call for policy instruments
that are based on voluntary compliance. In European social policy, there are two
ways of policy-making that encompass non-coercive policy instruments: social
dialogue and the OMC. Both procedures bypass the legislative procedure, when
policy outputs are formulated. While the OMC is a completely voluntary process
of policy-making, social dialogue may result either in voluntary agreements
between the social partners or binding legislation (cf. section 4.1 and section
4.3). The voluntary nature of the OMC and social dialogue enables the reduction
of conflict in contentious issue areas of European social policy. Political actors
with opposed interests and beliefs may agree on common policy outputs if these
policy outputs do not contain binding legal provisions. In contrast, binding legal
provisions hinder the settlement of political conflict. The social partners agreed on
the adoption of European legislation only three times. Further consultations of the
social partners have not resulted in any legal act (Leiber and Schäfer 2007).
The parental leave directive (96/34/EC) was the first European legal act that
was based on a framework agreement concluded between the social partners. The
directive made the provisions in the framework agreement legally binding in the
member states. The directive covers the right of both female and male workers to
take at least three months off in order to care for their children. Furthermore, workers
must not be dismissed because they take parental leave or apply for it. At the end of
parental leave, workers are entitled to return to their job, or, if that is not possible,
to an equivalent or similar one. Already in 1983, the Commission put forward a
draft directive on parental leave and leave for family reasons. However, the draft
directive was not adopted due to the resistance of member states in the Council.
National governments opposed the directive because it did not meet their ideological
beliefs. The draft directive provided that parental leave is not transferable between
mothers and fathers. This provisions increases the incentive for fathers to go on
leave. It was not acceptable to the German centre-right government that called
for a transferability between mothers’ and fathers’ leave. The Belgian centre-right
government demanded a more employer-friendly directive. However, after the social
democrats had succeeded the liberals in the governing coalition with the Christian
democrats, in 1993 the Belgian Council presidency put the policy issue of parental
leave again on the agenda. The revised proposal did not include the principle of
non-transferability. Thus, the German government gave up its opposition to the draft
directive. Only the British government continued to oppose European regulations
on parental leave. The British veto was bypassed by consulting the social partners
on the basis of the collective route of policy-making. The social partners took the
opportunity of collective negotiations in order to show that the new procedure of
decision-making may function well. UNICE, the CEEP and the ETUC reached an
agreement after only five months of negotiations (Falkner et al. 2005: 140–4).
While the social partners swiftly reached an agreement on parental leave, two
collective negotiations on policy problems of atypical work, namely part-time work
and fixed-term work, were characterised by a higher level of conflict (Falkner et al.
2005: 161–4). Both policy issues had already provoked a high level of conflict in the
Council before they became subject to social partner agreements. On 6 June 1997,
the social partners formally signed a framework agreement on part-time work that
was transformed into European legislation by the part-time work directive (97/81/
EC). Two years later, the fixed-term work directive (99/70/EC) was adopted in
order to implement a framework agreement on fixed-term work that was concluded
by the social partners on 18 March 1999. The part-time work directive stipulates
that part-time workers must not be treated less favourable than full-time workers.
Furthermore, it aims to improve the quality of part-time work. In a similar vein, the
fixed-term work directive proscribes discrimination against fixed-term workers in
relation to permanent workers and aims at improving the quality of fixed-term work.
Both directives set minimum standards for working and employment conditions in
order to ensure equal treatment of workers.
When the Commission submitted the legislative proposals for the two
directives to the Council in 1990, they were opposed by several member states.
Member states feared additional costs because the draft directives gave part-time
workers and fixed-time workers entitlement to statutory social security benefits
and guaranteed employment conditions, like annual leave, occupational pensions
and pay. In particular, the British government was against legislative activities
on equal treatment of workers. However, also the German government opposed
the draft directives because a substantial share of part-time workers in Germany
were not covered by the social security systems. Since member states did not
reach a decision in the Council, the Commission consulted the social partners
under the new procedure of collective policy-making that was in the meantime
introduced by the Treaty of Maastricht. Despite diverging policy positions, the
social partners agreed on commencing collective negotiations. On the one hand,
trade unions demanded a wide scope of the agreement that guarantees stringent
working and employment conditions for all workers. On the other hand, employers’
associations called for a restricted scope of the agreement, which would exclude,
for example, other forms of atypical work not represented by permanent part-time
work and small sized companies, in order to ensure that industry may flexibly
adjust production processes to market conditions. Nevertheless, the social partners
eventually agreed on the framework agreements on part-time work and on fixed-
term work (Falkner et al. 2005: 159–64).
The directive on fixed-term work was the last European legal act to be based on
a social partner agreement. Since then, the social partners have reached agreements
only in the context of the autonomous social dialogue that provides that policy
goals are implemented by soft law and suasive instruments (Leiber and Schäfer
2007: 127–8). Soft law and suasive instruments are also at the heart of the OMC
(cf. section 4.1). Before non-coercive ways of coordination and control were put
together under the heading of OMC at the Lisbon summit in 2000, soft law and
suasive instruments were already realised in the European Employment Strategy
(EES). At the Luxembourg summit in 1997, the heads of state and government
agreed on the EES in order to implement the employment provisions introduced
into the EC Treaty by the Treaty of Amsterdam. The EES provides that so-called
employment guidelines are proposed by the Commission and endorsed by the
European Council. The employment guidelines set policy priorities for the member
states. In order to describe the national implementation of these guidelines, member
states annually have to draw up national action plans that are examined jointly by
the Commission and the Council. The results of the examination are presented in a
joint employment report that constitutes the basis for new employment guidelines.
Furthermore, guidelines and monitoring processes in the context of the OMC are
established in the issue areas of social inclusion and pensions (Hodson and Maher
2001: 723–5, Goetschy 2003a, Lodge 2007: 345–7).
As O’Connor (2005) and Trubek and Trubek (2005) argue, the OMC
provides member states with the opportunity to tackle common policy problems
without constraining national welfare regimes. Member states face high rates of
unemployment, a low level of labour market participation and mounting expenditures
for social welfare, including state pensions. The problem of financing state pensions
is aggravated by an ageing population and unemployment is the main source of
poverty and social exclusion. Furthermore, as a result of EMU, member states are
constrained to pursue social policy objectives by the means of national fiscal policy.
In this situation, the OMC is regarded as a policy instrument that on the one hand
uses the diversity of national welfare regimes in order to foster policy learning and
the exchange of suitable solutions to policy problems between member states, but on
the other, preserves national competences in the area of social policy because it does
not oblige member states to take specific actions.
The expectation that the OMC represents an effective policy instrument to

cope with social policy problems within the Community of diverse national
welfare regimes has not been confirmed since the OMC has been in place. Lodge
(2007) shows that the OMCs in pensions and information society do not fulfil the
prerequisites of effective political steering. He identifies three components that
are essential to any framework of political steering: standard-setting, information-
gathering and behaviour modification. Lodge argues that the two OMCs analysed
are defective in respect of each of the three components. The OMC on pensions
fails to set clear policy goals. Due to a high politicisation of the policy issue member
states did not agree on common indicators. As a consequence of the absence of
indicators, information-gathering across member states is hampered and a process
of benchmarking is prevented. Finally, there is hardly any indication that the OMC
has altered national policy-making by affecting the behaviour of political actors
in the member states. Rather, changes in processes and outputs of national policy-
making are likely to result from actors’ similar response to common problems, like
scarce public finances and shifting demographics. Lodge concludes that effective
political steering by non-hierarchical means demands prerequisites that are not
met by the OMC. The OMC appears appropriate in highly politicised issue areas,
where a harmonisation of policies at the European level is not feasible, but it
is the high politicisation of policy problems that prevents effective coordination
and control by soft law and suasive instruments. The high level of politicisation
impedes an agreement on common standards, an exchange of information and an
adjustment of behaviour on a voluntary basis.
4.5 External Events
External events represent the third type of situational structures. As institutions

and the politicisation of policy problems, external events may alter the allocation
of power and resources within the actor constellation of a policy area. External
events occur outside European social policy but influence policy-making within
the policy area. A systematic conceptualisation of external events is not expedient
for both theoretical and empirical reasons (cf. section 1.4.2). The interviewees
from various organisations stated that social policy is not highly exposed to effects
of external events. Effects on European social policy that originate outside the
policy area stem from the economic development and political events. While
the poor economic performance of member states hamper the adoption of more
stringent social standards, political events in respect to the evolution of the EU,
like enlargement and Treaty revisions, constitute an occasion to promote further
measures of social policy. More unforeseen single incidents that affect the choice
of policy instruments are rare in European social policy. The interviewees did not
mention special events that had an essential impact on policy-making in social
policy, like the outbreak of the mad cow disease in agricultural policy and consumer
policy or industrial accidents in environmental policy. Moreover, they argued that
such incidents had been absent in social policy. An exception is represented by
the closure of the Renault plant in Vilvoorde. Also the impact of international
organisations is small although there were few instances where provisions of the
International Labour Organization (ILO) and the OECD influenced social policy-
making in the EU.
Economic Development and Political Events
Since the early 1990s economic growth has slowed down in the member states.
Regardless of the type of the national welfare regime, European countries have
lagged behind the USA in respect of the annual growth of GDP. Moreover, the EU
member states did not benefit from the strong growth of the world economy in the
period from 2004 to 2006. Unemployment in the EU has remained high and the
productivity has been falling (Aiginger and Guger 2006). As a result of the high
rate of unemployment, further market liberalisation was called into question. In
particular, the left-wing governments that came into office in the United Kingdom,
France and Germany in the second half of the 1990s pushed for measures of
employment policy at the European level. They did not consider employment
policy as a hindrance to economic growth but as a means of improving market
mechanisms in order to foster employment and social equity. Nevertheless, the EES
did not prove to be an instrument for eliminating social inequality, and monetary
and fiscal policy remained the main source of policy measures that aim at fostering
economic development in the EU (Deppe, Felder and Tidow 2003: 181–5). The
tension between economic development and political events was also reported by
several interviewees. On the one hand, the poor performance of member states’
economies in relation to the economies of countries like China, India and the USA
strengthened the position of those actors who called for a restriction of social
standards in order to enhance the competitiveness of European enterprises. On
the other hand, the view that social policy and economic policy do not pursue
conflicting goals gained support, when social democrats and socialists made up
the majority of member state governments and the new member states Austria,
Finland and Sweden entered the EU in 1995.
The aim of a balance between economic growth and the common market on
the one hand and a high level of employment and social protection on the other is
a characteristic of European social policy, as an official of the Commission argued
in an interview. In this sense, the European Employment Strategy represents
a response to the establishment of EMU by the Treaty of Maastricht. Also the
Globalisation Fund that was proposed by the Commission President José Manuel
Barroso aims to offset negative effects of the free market. The Globalisations Fund
provides financial means in order to help workers who lost their jobs because
their employer relocated production to a non-EU country. By representing a social
counterbalance to economic globalisation, the Globalisation Fund should also
respond to the rejection of the Treaty establishing a Constitution for Europe by the
French electorate that criticised a neo-liberal bias of European policies. However,
critics argue that the Globalisation Fund represents little more than symbolic action
and tries to cure the symptoms but does not combat the source of unemployment,
as Die Zeit (31 January 2008) and Spiegel-online (26 March 2008) reported.
Single Incidents and International Organisations
Economic developments and political events may shift the relation between the
policy goals of economic growth and social equity. Furthermore, single incidents
occurring external to the policy area and arrangements by international organisations
may contribute to the adoption of social policy measures. However, both types
of external events have rarely influenced European social policy-making. An
exceptional instance of an incident that pushed forward European social standards
is represented by the closure of the Renault plant in Vilvoorde in the Flemish
region of Belgium, north of Brussels (European Foundation for the Improvement
of Living and Working Conditions 1997, Schönmann, Clauwaert and Warneck
2006: 7–12). On 28 February 1997, the car manufacturer announced the closure
apparently without prior consultation of workers’ representatives. The closure was
part of Renault’s plan to restructure its production in Europe. It resulted in a loss of
3,000 jobs and further 1,000 redundancies among sub-contractors and suppliers.
Renault also announced 3,000 dismissals in their French production sites in order
to streamline operations. The Belgian plant was considered highly productive
and the jobs were regarded as safe. Four years ago, employers and employees
had agreed on more flexible working practices and further investment. The way
Renault presented its decision deprived workers’ representatives of the opportunity
to discuss social measures that support the restructuring. While the proceeding of
the car manufacturer was in accordance with the letters of existing EU legislation,
both the Commissioner in charge of industrial relations and social affairs, Pádraig
Flynn, and the Commission President Jacques Santer condemned the mass dismissal
without prior consultation. They argued that Renault’s proceeding contradicts the
spirit of EU legislation and called for a support of legislation in European social
policy in order to close the loopholes in EU law.
The policy issue of information and consultation of employees had been on the
European political agenda already before the closure of the Renault plant. The issue
was highly contentious. In 1997, the consultation of the social partners resulted in the
publication of opposing opinions. However, the incidents in Vilvoorde boosted the
legislative activities of the Commission that proposed a draft directive (COM/98/612
final) in November 1998. In the Council, the draft directive was opposed by Denmark,
Germany, Ireland and the United Kingdom. These countries constituted a blocking
minority in the co-decision procedure. Ireland and the United Kingdom considered
the legislative activity as disproportionate to the events in Vilvoorde. Moreover, the
directive is supposed to result in a substantial impact on Irish and British policies
because a general system of consultation and information was absent in the two
countries. Nevertheless, after three and a half years of discussion, the Commission
succeeded in attaining the approval of the member states. In the end a revised text
was adopted by the Council and the European Parliament. The directive 2002/14/EC
establishing a general framework for informing and consulting employees in the EC

provides that employees have to be consulted and informed in a way that allows
them to influence decisions of the management and their social consequences.
Therefore, consultation and information have to be genuine and occur in good time
before irrevocable decisions are taken. The consultation and information procedure
must aim at cooperation (European Foundation for the Improvement of Living and
Working Conditions 1997, Schönmann, Clauwaert and Warneck 2006: 7–12).
As single incidents that affect social policy-making were rare, also the
impetus from international organisations for the choice of a certain type of policy-
instrument was small. International organisations did not have a direct impact on
European social policy, as officials from the Commission, and representatives
of member states and the ETUC reported in the interviews. Conventions and
Recommendations of the ILO usually provide less stringent social standards than
EU legislation. Nevertheless, political actors resorted to standards provided by
the ILO, when they adopted the first European directives on health and safety.
Occasionally, also policy measures dealing with pensions and part-time work
profited from ILO provisions. As the ILO, also the OECD had a limited impact
on social-policy making in the EU. Only few OECD provisions were adopted in
European policy measures, most of them in the issue area of employment. The
limited impact of international organisations on European social policy does not
contradict the observation that the OMC resembles policy instruments that have
been used by the OECD for decades. Both the OMC and the OECD’s multilateral
surveillance rely on peer pressure in order to persuade reluctant actors. However,
Schäfer (2006a) argues that the choice of the OMC as a policy instrument at the
European level does not result from a policy transfer based on the consideration
that non-hierarchical policy instruments have been used effectively by international
organisations. Rather, political actors in both the EU and international organisations
chose non-hierarchical policy instruments in order to secure their competences.
4.6 Characteristics of Policy Instruments and the Cleavage Structure of the

Policy Area
The previous sections of this chapter described the use of policy instruments in
European social policy and discussed factors that affect the adoption of specific
policy instruments. This section completes the chapter on European social
policy by highlighting the close connection between the characteristics of policy
instruments and the cleavage structure of the policy area. Policy instruments are
an element of policy outputs that are adopted at the end of a process of policy
formulation. Policy outputs also contain policy goals that are supposed to be
implemented by the use of the policy instruments provided by the policy output.
Thus, both means and ends, i.e. policy instruments and policy goals, are subject
to the political struggle during policy formulation. Furthermore, the choice of
policy instruments anticipates the conflict that emerges, when the policy goals
are implemented. The specific characteristic of a policy instrument affects the
costs and benefits political and societal actors expect from the implementation
of a certain policy goal. Hard law and command and control instruments put
constraints on the addressees of political steering that do not agree with the policy
goal. In contrast, the constraint on these actors is reduced, if soft law and suasive
instruments are applied. Therefore, those actors that support the policy goal at
stake support coercive policy instruments in order to make reluctant addressees
of political steering comply with the policy output. Since the degree of coercion
contained in policy instruments favours some actors while it deprives others, it
is closely related to the interests and beliefs of actors. Moreover, also whether
a policy instrument is regarded as effective is mediated by the actors’ interest
and belief. Actors are keen on commending a policy instrument as effective, if
it favours the realisation of their interests and beliefs. Characteristics of policy
instruments correspond to the interests and beliefs of political actors that constitute
the cleavage structure of the policy area.
The aim of European social policy is to improve living and working conditions,
promote employment, ensure proper social protection and social security, prevent
discrimination, and foster social inclusion. These general goals are acknowledged
by all actors of the policy area. However, the question on how these general
goals should be achieved rises political conflict that is shown by the cleavage
structure. The cleavage structure contains conflict about policy goals and policy
instruments. On the one hand, actors with a neo-liberal belief argue that legislation
at the European level should be restricted to market-making measures in order
to guarantee the functioning of the common market. Only in some issue areas,
namely anti-discrimination and health and safety of workers, should EU legal
acts establish minimum standards. The main objective of social policy, like
employment and social inclusion, is supposed to result from economic growth
that occurs when the industry is relieved of the regulatory burden of command and
control legislation. Thus, a neo-liberal belief and the interests of industry go hand
in hand. Employers’ associations support soft law and suasive instrument that do
not compel enterprises. On the other hand, actors with a social democratic belief
argue that market-making measures are not sufficient to establish social equity.
Economic growth does not automatically result in employment and decent living
and working conditions. They acknowledge that a well functioning market is of
value to the creation of employment and societal wealth, but point to the necessity
of market-correcting measures that establish legal social standards businesses have
to comply with. Hence, a social democratic belief is connected to the interests of
workers. Trade unions welcome social dialogue but prefer command and control
legislation that binds industry to an autonomous social dialogue that is based on
voluntary compliance.
Also member states call for legal standards if they support the policy goal,
but oppose European regulation if the policy objective pursued at the European
level is not consistent with to the national interest or the ideological belief of
the member state’s government. At several occasions, the United Kingdom was
against the adoption of hard law because European legislation conflicted with
both British interests and the neo-liberal belief of the conservative government.
Also other member states opposed legislation at the European level. France and
Germany, for example, opposed the proposal for the services directive because
they worried about the competitiveness of their national industry. Belgium and
Germany disagreed with the proposal for the parental leave directive because it
did not correspond to the ideological belief of the centre-right governments.
Whether policy instruments that exert a high level of coercion on the addressees
of political steering are supported or rejected by political actors depend on their
interests and beliefs. Moreover, interests and beliefs also have an influence on
whether a policy instrument is considered effective. The Commission, the European
Parliament and the Council argue that using a mix of policy instruments is the most
effective way of political steering. Different policy instruments are regarded as
suitable for different purposes and policy instruments may well complement each
other in order to enhance the effectiveness of achieving social equity. Besides this
general agreement, the three organisations put different emphasis on single policy
instruments. On the one hand, the European Parliament argues that command
and control legislation is the most effective policy instrument because it compels
member states to comply with European provisions. On the other hand, member
states in the Council argue that European provisions have to give member states
leeway to take peculiarities of national welfare regimes into account in order to
achieve policy goals effectively. In both positions the considered effectiveness of
policy instruments mingle with the organisations’ interest, namely the European
Parliament’s central role in the legislative process and the member states’ national
autonomy.
Characteristics of policy instruments affect the preferences of political actors
and, thus, shape the actor constellation in a policy area. Political actors anticipate
the effects of policy instruments on themselves and on the addressees of political
steering. However, whether political actors succeed in adopting their preferred
policy instruments during policy formulation depends on situational structures.
Situational structures, i.e. institutions, the politicisation of policy problems and
external events, provide both opportunities and constraints to political actors to
realise their preferred policy instruments. Situational structures in European social
policy were discussed in the sections 4.3 to 4.5. The effect of situational structures
on the choice of policy instruments may be inferred from the data provided by
the comparative analysis of European environmental policy and European social
policy. The comparative analysis of the choice of policy instruments in the two
policy areas is subject to the following chapter.
Chapter 5
Policy Instruments in European
Environmental Policy and European
Social Policy
Based on the theoretical framework developed in the first chapter the previous
two chapters described the use of policy instruments in European environmental
policy and European social policy, respectively. In this chapter, the empirical
information on the use of policy instruments in the two policy areas is
systematically compared by applying the logic of the most similar system design,
as discussed in the second chapter. Despite the similarity between European
environmental policy and European social policy, specific types of policy
instruments emerged to a different extent in the two policy areas. European
environmental policy is dominated by command and control legislation.
Economic instruments that are adopted by hard law have a significant role, while
suasive instruments in the form of both hard law and soft law have only a small
relevance to political steering in the policy area. In contrast, in European social
policy suasive instruments and soft law play a greater role. Both command and
control legislation and suasive instruments in the form of soft law are adopted to
a similar extent. Both policy instruments have a significant relevance to political
steering in European social policy. Economic instruments adopted by legislation
are less pertinent than in European environmental policy and play only a small
role. Given the difference in the use of types of policy instruments despite the
general similarity of European environmental policy and European social policy,
the choice of policy instruments must be ascribed to more specific factors that
affect policy-making in the two policy areas. These specific factors shall be
identified in this chapter.
The following sections compare types of policy instruments, specific
characteristics of the policy area and the values of explanatory factors. Section 5.1
describes the different relevance of specific types of policy instruments to political
steering in the two policy areas. While European environmental policy is dominated
by command and control legislation, in European social policy both command and
control legislation and suasive instruments in the form of soft law play a significant
role. Section 5.2 compares the cleavage structure of environmental policy to the
cleavage structure of social policy, showing that European environmental policy
and European social policy are characterised by similar cleavages in respect to
both the level of governance on which political steering should take place and the
policy objective that should be prioritised. The sections that deal with situational
structures reveal differences between European environmental policy and

European social policy. Institutions are discussed in section 5.3. Most decisions in
European environmental policy are subject to the co-decision procedure, whereas
in European social policy the consultation procedure is applied more often and
social dialogue represents an additional decision-making procedure. Section 5.4
shows that the politicisation of environmental policy problems is not as high
as the politicisation of social policy problems. Section 5.5 compares external
events that affect policy-making in the two policy areas, showing that direct
effects of external events on the choice of policy instruments are more frequent
in European environmental policy than in European social policy. Finally, section
5.6 summarises the similarities and differences between the two policy areas in
order to infer a social mechanism that explains the choice of policy instruments
in European environmental policy and European social policy. Institutions, the
politicisation of policy problems and external events provide political actors with
the opportunity to transfer their preferred policy instruments in European policy
outputs.
Policy instruments comprise two dimensions that are represented by governance

instruments and legal instruments. As far as political steering in the multi-level
system of the EU is concerned, legal instruments aim to coordinate and control the
activities of the member states, while governance instruments aim at influencing
the behaviour of producers and consumers as well as organisations and citizens
in the member states. Both legal instruments and governance instruments
occur concurrently. As the empirical description shows, command and control
instruments have an affinity with hard law, whereas suasive instruments have an
affinity with soft law. The respective two policy instruments are characterised by
a similar degree of coercion they exert on the addressees of political steering.
Command and control instruments and hard law entail a high level of coercion.
In contrast, suasive instruments rely on voluntary activities by the ultimate
addressees of political steering and soft law does not bind member states. Both
in European environmental policy and in European social policy, most frequently,
governance instruments of the command and control type are chosen together with
legal instruments of hard law and suasive governance instruments are adopted
in the form of soft law legal instruments. Table 5.1 summarises the use of types
of policy instruments in European environmental policy and European social
policy by showing the relevance of the respective linkage between governance
instruments and legal instruments to political steering in the two policy areas. The
summary refers to the level of policy outputs. Single provisions in policy outputs
are not taken into account.
Despite command and control instruments and hard law on the one hand
and suasive instruments and soft law on the other share an affinity, governance
instruments and legal instruments in principle may be used in any combination.
Policy Instruments in Environmental Policy and Social Policy 161
Table 5.1 Types of Policy Instruments in European Environmental

Policy and European Social Policy

Hard Law Soft Law Hard Law Soft Law Hard Law Soft Law
European
Environmental +++ - ++ - + +
Policy
European
++ - + - - ++
Social Policy
Note: Relevance of the linkage between governance instruments and legal instruments to
political steering in the policy areas: +++ dominant, ++ significant, + small, - absent
In European environmental policy eco-labels as well as the eco-management and

audit scheme (EMAS) combine suasive instruments and hard law. Eco-labels
provide consumers with information about environmental-friendly products.
Whether consumers buy these products is up to them. Similarly, organisations
are free to participate in EMAS that provides for auditing internal processes in
respect of their environmental compatibility. Both suasive instruments are adopted
by EU regulations that are binding and directly applicable in the member states.
A comparable linkage between suasive instruments and hard law is absent in
European social policy. Further policy instruments that are not used in European
social policy nor in European environmental policy are combinations of soft law
and economic instruments as well as combinations of soft law and command and
control instruments.
In both policy areas economic instruments are adopted in the form of hard law.
European policies provide for subsidies in order to foster social equity and to protect
the natural environment. The ESF provides financial assistance for measures that
promote employment and combat social exclusion. The ESF is established by a
regulation and administered by the Commission. However, economic governance
instruments are more prominent in European environmental policy than in European
social policy. The programme of the Financial Instrument for the Environment (LIFE)
replaces a number of former financial instruments. It co-finances environmental
projects of public and private organisations. The Cohesion Fund provides financial
means to poorer member states. In order to promote economic and social cohesion,
the Cohesion Fund does not only support investment in infrastructure but also
contributes to projects that aim at protecting the environment. Both LIFE and
the Cohesion Fund are established by European regulations. Besides funding
environmental projects, measures of European environmental policy use market
mechanisms in order to provide incentives for businesses not to pollute the natural
environment. Environmental liability and emission trading represent two economic
governance instruments that are adopted by directives. By implementing the polluter-

pays principle, the environmental liability scheme avoids that enterprises gain a
competitive advantage because they do not include environmental damages that
result from production into the prices of their products. The emission trading scheme
provides a competitive advantage to those enterprises that reduce emissions.
As economic governance instruments, also command and control instruments
are adopted only in conjunction with hard law. In European environmental policy
command and control legislation constitutes the dominant policy instrument.
Any number of directives and regulations establish binding emission standards
and quality standards for air and water. They set legal minimum standards for an
integrated environmental protection, the conservation of habitats of animals and
plants, the utilisation of natural resources and the treatment of waste and hazardous
substances. They make procedural provisions that regulate the establishment and
operation of enterprises. Command and control legislation is applied in all issue
areas of European environmental policy. In European social policy command
and control legislation is less dominant than in European environmental policy
although it still plays a significant role. Command and control legislation sets
binding minimum standards for working conditions, including provisions
referring to specific types of workers and employers’ participation in management
decisions. They provide legal standards for health and safety at the workplace and
gender equality. European regulations set a legal framework for the coordination
of national legislation on social security in respect of migrant workers. However,
in European social policy, command and control legislation is restricted to these
issue areas just mentioned, while there are also issue areas where command and
control legislation is absent.
European policy measures that aim to foster employment rely on benchmarking
and best practice and do not bind member states. Also the OMCs on pension
and social inclusion use suasive governance instruments and soft law. While the
issue areas of employment, pension reform and social inclusion do not witness
any command and control legislation, suasive instruments and soft law are also
numerous in the issue areas of working conditions, health and safety of workers
and gender equality. In the autonomous social dialogue, employers’ associations
and trade unions adopted framework agreements on telework, work-related stress,
and harassment and violence at work. These agreements do not have a legal
form that binds member states. They are implemented by the social partners on
a voluntary basis. Procedures of both the OMC and social dialogue are absent
in European environmental policy. Non-binding suasive policy instruments are
represented by self-regulation by industry in the form of voluntary agreements. In
European environmental policy, there are voluntary agreements by industry on the
reduction of carbon dioxide emissions of new passenger cars, on the production
and disposal of PVC and on minimum recycling rates for paper. Nevertheless,
the relevance of suasive instruments adopted by soft law is small in European
environmental policy, whereas suasive instruments and soft law play a significant
role in European social policy.
5.2 Cleavage Structure of Policy Areas
While policy instruments in European environmental policy and European social

policy differ, the cleavage structure of both policy areas is similar. In European
environmental policy and European social policy, political conflict is structured by
a horizontal cleavage and a vertical cleavage, as shown in Table 5.2. The vertical
cleavage contains the conflict about whether the competence of political steering
in the multi-level polity of the EU should be located at the European level or at
the national level. This cleavage also includes the conflict about whether policy
measures should be adopted as hard law or as soft law. While hard law provides
the political institutions of the EU with a central role in policy-making and compels
member states to comply with European environmental standards and social
standards, soft law preserves the autonomy of member states because it does not
provide for legal sanctions, if member states deviate from European standards. The
horizontal cleavage refers to the conflict about which policy objective should be
achieved in the first place. In both policy areas there is a conflict between economic
growth on the one hand and the primal objective of the policy area. Hence, in
environmental policy economic growth conflicts with environmental protection
and in social policy economic growth conflicts with social equity. As the vertical
cleavage, also the horizontal cleavage covers conflict about the adoption of policy
instruments. While proponents of economic growth call for suasive instruments in
order to not constrain industry, proponents of environmental protection and social
equity demand command and control instruments in order to guarantee compliance
with environmental and social standards.
Table 5.2 Cleavage Structure in European Environmental Policy and

Cleavage
Horizontal Vertical
Environmental Protection European Level
European Environmental Policy vs. vs.
Economic Growth National Level
Social Equity European Level
European Social Policy vs. vs.
Economic Growth National Level
The organisations involved in European policy-making have similar policy

preferences in European environmental policy and in European social policy. As far
as the vertical cleavage is concerned, the European Parliament favours the adoption of
hard law. The Parliament respects the authority of member states and acknowledges
that soft law may enhance the effectiveness of political steering, if it is used as a
complement to hard law. However, the European Parliament considers European
legislation as an effective and legitimate legal instrument. Binding European

legal acts are effective because they ensure minimum standards of environmental
protection and social equity in the member states. They are legitimate because their
adoption involves the participation of the European Parliament, the only political
institution of the EU that is directly elected by the citizens of the member states.
The Commission acknowledges the value of European legislation but demands that
European legislation should be used economically. Moreover, the Commission has
a more positive position on soft law than the European Parliament in respect to both
its application and its effectiveness.
While the policy positions of the European Parliament and of the Commission
are of a more general nature, the policy positions of member states in the Council
of the EU depends to a larger extent on the concrete policy issue that is debated.
Member states aim at harmonising environmental and social standards by the
means of European legislation in order to prevent a competitive disadvantage to the
national industry. In contrast, member states that expect economic disadvantages
from a harmonisation at the European level oppose the adoption of European
legislation. Similar to the policy position on legal instruments on the basis of
economic interests, member states support and oppose European legislation on
the basis of the party political affiliation of the national government. National
governments that agree with the regulatory approach put forward at the European
level support the adoption of hard law, whereas national governments that reject
the regulatory approach oppose the adoption of European legislation. Regardless
of the issue specific position of national governments, member states agree that
essential competences of the nation state should remain at the national level. In
European environmental policy, the establishment of an eco-tax failed due to the
opposition of member states. In European social policy, policy measures that aim
to harmonise national social security systems are absent.
The policy position of the political institutions of the EU on the choice of
legal instruments depends on the policy issue that is on the agenda as well as
on the policy approach and the legal standards contained in the policy output.
The policy position of private organisations is more straightforward. As far as
both the horizontal cleavage and the vertical cleavage are concerned, employers’
associations have a policy position that conflicts with the policy position of
environmental NGOs, social NGOs and trade unions. On the one hand, employers’
associations consider economic growth the primary policy goal. Environmental
protection and social equity are regarded as secondary goals that result from
economic growth and may not be achieved without the wealth that is created by
economic growth. In order to foster economic growth, employers’ associations
demand policy instruments that reduce the regulatory burden on industry. Hence,
they support less coercive policy instruments. If any policy measure is adopted,
employers’ associations prefer suasive governance instruments and soft law. Since
both policy instruments are based on voluntary compliance, suasive instruments
do not constrain industry and soft law does not compel member states to adopt
regulations that may limit enterprises’ leeway to pursue economic goals. With few
exceptions employers’ associations only support European legislation, if it contains

market-making measures that contribute to the functioning of the common market.
Among the few exceptions are efficient environmental policy measures that are
not costly for industry and social policy measures that ensure a minimum standard
of health and safety at the workplace.
On the other hand, environmental NGOs, social NGOs and trade unions
primarily pursue non-economic objectives. Environmental NGOs are committed
to environmental protection. Social NGOs and trade unions advocate social equity.
Environmental NGOs, social NGOs and trade unions consider economic growth an
essential policy goal, but argue that economic growth does not necessarily result in
environmental protection and social equity. Moreover, economic production and
consumption may damage the natural environment and encroach on living and
working conditions. Therefore, market-correcting measures are required in order
to reach an economic growth that is environmentally compatible and socially
acceptable. These policy measures should be implemented by command and
control instruments and hard law. The NGOs and trade unions argue that the high
level of coercion entailed in command and control legislation compels member
states to implement the prescribed environmental and social standards and makes
businesses to comply with these standards. Thus, command and control legislation
is considered the most effective policy instrument to achieve environmental
protection and social equity and to prevent that these objectives are played off
against other policy goals, especially economic competitiveness.
The policy positions of employers’ associations on the on hand and the policy
positions of trade unions and social and environmental NGOs on the other have
hardly any overlap. There are few instances of common views that are, however,
of a general nature. In European environmental policy both environmental NGOs
and employers’ associations in principle welcome the adoption of economic
governance instruments. However, the consensus ends, when it comes to concrete
implementation. Environmental NGOs demand that market-based instruments
have to be adopted by legal acts in order to be effective. In contrast, employers’
associations argue that market-based instruments threaten the economic
competitiveness of enterprises if eco-taxes, emission trading and liability schemes
are adopted by legislation, because they put too many constraints on industry.
In European social policy coordination and control by an autonomous social
dialogue constitutes the lowest common denominator between trade unions and
employers’ associations, because it gives both social partners the opportunity to
engage in policy-making. However, while the autonomous social dialogue is only
the second best alternative for trade unions, it is more closely to the position of the
employers’ associations since the autonomous social dialogue represents a suasive
governance instrument and soft law.
Member states in the Council also take policy positions on the choice of
governance instruments that correspond to the horizontal cleavage between
economic growth and the non-economic goals of environmental protection and
social equity. When the REACH regulatory framework was on the political agenda
of European environmental policy, Austria, Denmark, Finland, Sweden and the

Netherlands called for a regulation of the chemical industry by command and
control instruments in order to guarantee a high level of environmental protection,
whereas France, Germany, Ireland, Italy and the United Kingdom opposed the use
of command and control instruments in order to reduce the regulatory burden on
industry and foster economic growth. In European social policy, France put forth
regulations to control working time by command and control instruments in order
to protect health and safety of workers, whereas the United Kingdom opposed
command and control regulation. The British government argued that working
time is a matter of employment that is best regulated by market mechanisms and,
thus, should not be subject to public intervention.
As far as governance instruments are concerned, the horizontal cleavage
is less pronounced within the Commission and the European Parliament. Both
organisations advocate a combination of governance instruments. They recognise
the value of command and control instruments, but also acknowledge their
limitations. The Commission and the European Parliament demand that command
and control instruments should be implemented more effectively. They regard
adding suasive instruments to the use of command and control instruments as a way
of enhancing the effectiveness of political steering. However, both organisations
stress that suasive instruments do not constitute a substitute for command and
control instruments. Also economic instruments are supposed to contribute to an
effective political steering. Economic instruments are considered cost-effective
and flexible instruments that add to the toolbox of policy instruments.
5.3 Institutions
European environmental policy and European social policy are characterised by

a similar cleavage structure. In contrast, political actors face different situational
structures in the two policy areas. Besides the politicisation of policy problems
and external events that are discussed in the two following sections, institutions
in European environmental policy and European social policy differ. Institutions
comprise both boundary rules and decision rules. Boundary rules define the actors
who are entitled to participate in decision-making in respect to a specific subject
matter. Two procedures establish the competence of actors to make decisions at the
European level. The social dialogue gives trade unions and employers’ associations
a predominant role in the adoption of European policy outputs. Social dialogue may
either result in European legal acts or in framework agreements that are implemented
by the social partners themselves. The legislative procedure authorises the political
institutions of the EU to adopt policy outputs. There are different legislative
procedures that involve the Commission, the Council and the European Parliament
to a different degree. However, all legislative procedures establish a competence
to regulate policy issue at the European level. Decision rules define how decisions
are taken. There are mainly two decision rules that are relevant to policy-making
in the EU. Decisions in the Council may either require a unanimous vote by the
member states or allow qualified majority voting. The decision rule is specified
by the legislative procedure provided by the EC Treaty. While the consultation
procedure stipulates unanimity, the co-decision procedure provides for qualified
majority voting. The institutions in European environmental policy and European
social policy are summarised in Table 5.3.
Table 5.3 Institutions in European Environmental Policy and European

Social Policy
Institutions
Boundary Rules Decision Rules
Social Legislative Unanimity Qualified Majority
Dialogue Procedure
European
- +++ + +++
Environmental Policy
European
++ ++ ++ ++
Social Policy
Note: Occurrence of institutions in the policy areas: +++ dominant, ++ significant, + small,
- absent
While European environmental policy witnesses a dominance of the legislative

procedure and qualified majority voting, the diversity of institutions is greater in
European social policy. In European social policy the boundary rules of social
dialogue and legislative procedure as well as the decision rules of unanimity
and qualified majority occur to a similar extent. Despite the different values of
institutions, the emergence and evolution of institutions in the two policy areas
show a similar pattern. When the EEC Treaty of Rome came into force in 1958, it
did not establish a European competence for environmental policy nor for social
policy. There were two exceptions in the area of social policy. The EEC Treaty made
provisions for equal pay of women and men and for the free movement of migrant
workers. At the Paris summit in 1972, heads of state and government decided to
develop environmental policy and social policy as two European policy areas in
their own right. Nevertheless, up to the Single European Act, legal acts in the two
policy areas could only be adopted if they affected the completion of the common
market. The Single European Act introduced a legal basis in the EEC Treaty for
the adoption of European legal acts that aim to protect the natural environment and
the health and safety of workers, irrespective of whether these measures affect the
common market or not. The newly introduced Treaty basis extended the European
competence to environmental policy as a whole and required unanimity for those
policy outputs that pursue environmental protection as an independent goal. In
European social policy, the European competence was only established for the
issue area of health and safety of workers. In this issue area policy legal acts could
be passed by qualified majority voting.
The Treaty of Maastricht changed both boundary rules and decision rules in the
two policy areas. In European social policy, the Treaty of Maastricht introduced
social dialogue and extended the legal competence and qualified majority voting.
Qualified majority voting was also introduced for almost all decision in European
environmental policy. However, the extension of qualified majority voting in
European social policy and European environmental policy does not hide the fact
that the Treaty of Maastricht also increased the differences between the institutions
in the two policy areas. The social dialogue establishes trade unions and employers’
associations as central actors of policy-making in European social policy. If the
social partners agree on a policy output, the political institutions of the EU are
marginalised. A comparable procedure is absent in European environmental
policy. In European social policy, the legislative procedure may only commence if
the social do not take up collective negotiations. However, since trade unions and
employers’ associations frequently do not reach a consensus because of conflicting
policy positions, the legislative procedure still represents a significant way of policy
formulation in European social policy. In contrast, in European environmental
policy the legislative procedure is dominant because it represents the only way
of adopting binding policy outputs. Hence, the Commission, the Council and the
European Parliament have a more powerful position in environmental policy-
making than in social policy-making where an agreement of the social partners
may prevent the legislative process.
Differences between institutions in European environmental policy and
European social policy also exist in respect of the legal competence and the
application of qualified majority voting provided by the EC Treaty. On the one hand,
the EC Treaty provides for policy measures in the whole area of environmental
policy. Environmental regulation at the European level encompasses all policy
issues that are also subject to environmental policy in the member states.
Furthermore, with few exceptions, legal acts in European environmental policy
may be adopted by qualified majority voting. The Treaty of Maastricht provided
for five exceptions that still require unanimity in the Council. These exceptions are
measures of a financial nature, measures that affect the structure of energy supply,
the management of water resources, town and country planning and land use.
On the other hand, the EC Treaty excludes issue areas that constitute the core of
social policy in the member states, namely social security systems, from European
social policy. The extension of European competences occurred gradually and at
the level of issue areas. The same applies to the extension of qualified majority
voting. The Treaty of Maastricht extended the legal competence of European
social policy and qualified majority voting in the policy area to the issue areas
of working conditions, worker information and consultation, gender equality
and labour market integration. Moreover, the Treaty of Maastricht provided for
the adoption of legal acts by unanimity in the issue areas of social security and
social protection of workers, protection of workers where their employment
contracts are terminated, the representation and collective defence of interests of
workers and employers, and conditions of employment for third country nationals
legally residing in Community territory. The Treaty of Amsterdam provided for

the adoption of measures against discrimination by unanimity. Furthermore, it
stipulates that soft law may be adopted by qualified majority voting in the issue
areas of employment, gender equality and social inclusion.
5.4 Politicisation of Policy Problems
As institutions, also the politicisation of policy problems differs in European

environmental policy and European social policy. The politicisation of policy
problems closely relates to the level of conflict contained in policy-making. Hence,
there is an overlap between the notion of the politicisation of policy problems
and the concept of policy types because both affect the level of conflict during
policy formulation. The notion of the politicisation of policy problems refers
to the beginning of policy-making when political actors take up a policy issue,
whereas the concept of policy types refers to policy formulation when political
actors anticipate costs and benefits for various actors and groups of actors a
policy output is supposed to generate during implementation (cf. section 1.4.1
and section 1.4.2). Conflicts that result from the politicisation of policy problems
and conflicts that result from the policy type add up to the level of conflict during
policy formulation.
Policy problems are situated at different levels of abstraction. At the most abstract
level European environmental policy tackles the policy problem of environmental
pollution. Policy problems like air pollution and waste management are situated at
a medium level of abstraction. They correspond to concrete problems of emission
limits and methods of waste disposal. In European social policy, social inequity
constitutes the most abstract policy problem. Policy problems like harmful working
conditions and discrimination against women are of a medium abstraction. At a
concrete level, European social policy tackles problems like too many working
hours per week and unequal pay of women and men. Policy problems of European
environmental policy and European social policy are mainly tackled by regulatory
policies (cf. section 2.2). Thus, in the two policy areas there is a similar level of
conflict that results from the anticipated effects of implementation. However, policy
problems of European environmental policy and European social policy have both
similar and different characteristics. While the similar characteristics contribute to a
similar level of conflict, those characteristics of policy problems that differ between
the two policy areas account for a different level and type of conflict during policy
formulation. Hence, despite the overall similarity in the level and type of conflict
that result from the fact that both policy areas are dominated by regulatory policies,
European environmental policy and European social policy differ in the level and
type of conflict due to differences in characteristics of policy problems.
Table 5.4 summarises the characteristics of policy problems that result in a low
or a high politicisation of policy problems in European environmental policy and
European social policy. In European environmental policy, a number of policy
problems may be tackled on the basis of scientific evidence. Pollutions of air, water
and soil may be measured by scientific methods. The harmful effects of hazardous
substances on animals, plants and humans may be tested under experimental
conditions. A reduction of emissions and an enhancement of environmental quality
standards may be achieved by technical innovations. The accessibility to scientific
evidence contributes to a low politicisation of environmental policy problems. In
European social policy, agreed policy objectives contribute to a low politicisation
of policy problems. Political actors agree that health and safety of worker and anti-
discrimination represent essential policy objectives that directly affect people’s
well-being and therefore must not be played off against other policy objectives, in
particular economic growth and competitiveness. Although scientific evidence and
agreed policy objectives contribute to a low politicisation of policy problems that
reduce the level of conflict in the respective policy area, the two characteristics
do not impede political conflict in the two policy areas. Scientific evidence may
involve uncertainty and may be contested by researchers and political actors alike.
The agreed policy objectives only pertain to a part of European social policy.
Table 5.4 Politicisation of Policy Problems in European Environmental

Policy and European Social Policy
Politicisation of Policy Problems

Low High
European Economic Cost
Scientific Evidence
Environmental Policy National Regulatory Approaches
European Economic Cost
Agreed Policy Objectives
Social Policy National Welfare Regimes
Both in European environmental policy and in European social policy conflict

between political actors emerges because solutions to policy problems create
economic cost. Standards of emission limits, water quality or waste disposal as
well as standards of working time, worker participation or parental leave increase
economic cost for those enterprises that have to comply with these standards.
Thus, industry-friendly actors oppose policy measures of environmental policy
and social policy that works to enterprises’ disadvantage. Economic cost is
not only an essential element of the conflict between environmental protection
and social equity on the on hand and economic growth on the other. Economic
cost also relates to the conflict between member states. Since environmental
standards and social standard differ between the member states, member states
are concerned about the competitiveness of their national industrial sectors within
the common market. A harmonisation of European environmental and social
standards at a high level is supposed to work to the disadvantage of enterprises
in member states with low environmental and social standards because those
enterprises lose their advantage of low production cost and have to catch up with
the higher standards. In contrast, low European standards or even their absence
is to the disadvantage of enterprises in member states with high environmental
and social standards because they bear the cost of the high standards and do not
have a competitive advantage as a result from already complying with these
standards.
While solutions to European environmental problems and solutions to
European social problems involve economic cost that result in a high level of
politicisation and a similar type of conflict, environmental problems and social
problems differ in the way they are related to national policies. In environmental
policy, member states pursue different regulatory approaches in order to deal with
environmental problems. The national regulatory approaches may pursue pollution
prevention at the source of emissions or aim to control the quality of the natural
environment. Furthermore, they prefer different policy instruments. However,
there is a considerable similarity between national regulatory approaches in the
member states. For the past decades, a convergence has taken place. Moreover,
national regulatory approaches were blended within European policy outputs.
Hence, solutions to environmental policy problems do not involve high cost
that result from the fact that member states have to adapt to another regulatory
approach. In contrast, national welfare regimes that tackle social problems differ
to a great extent between the member states and are rooted in the formation and
legitimacy of the nation state. National welfare regimes differ in the provision of
social services, the average level of taxation and social spending, and the extent of
social transfers. Social security systems are an essential element of the legitimacy
of national governments. Furthermore, the types of welfare regimes are linked to
the grand ideological beliefs of conservatism, liberalism and social democracy.
5.5 External Events
External events represent the third kind of situational structures. As institutions

and the politicisation of policy problems, external events differ between
European environmental policy and European social policy despite some
similarities. External events may influence the choice of policy instruments both
directly and indirectly. There is a direct effect, if political actors react to an
external event by revising existing policy measures, accelerating the adoption of
pending policy outputs, or adopting a policy instrument that would not have been
adopted, if the external event had not occurred. In this case, a policy measure is
taken in order to prevent such events in the future or to alleviate their negative
effects. An external event constitutes both an occasion and a justification for
the adoption of a policy output, including the respective policy instrument.
Industrial accidents triggered legislative activities in European environmental
policy. A plant closure and the resultant mass dismissal accelerated the adoption
of legislation in European social policy. There are further external events that
only indirectly affect the choice of policy instruments by highlighting certain
policy problems, setting policy issues on the political agenda and stimulating
political actors. Both in European environmental policy and in European social

policy, international organisations provide information, develop policy ideas,
and set standards that are considered by political actors during the adoption of
policy outputs at the European level. Furthermore, the economic development
affects the relative value political actors ascribe to economic growth on the one
hand and environmental protection and social equity on the other.
There are three types of external events that affect the choice of policy
instruments in European environmental policy and European social policy: single
incidents that occur spontaneously, decisions by international organisations, and
occurrences and developments in social systems that are usually dealt with by
political actors of other policy areas. Table 5.5 summarises the external events
in European environmental policy and European social policy and shows their
effect on the choice of policy instruments. The greatest effect on the choice of
policy instruments stems from environmental disasters. Environmental disasters
encompass both industrial accidents and natural phenomena whose consequences
are aggravated by human activities. Several policy measures of European
environmental policy were adopted, accelerated or revised as a direct reaction to
the accidental release of hazardous substances into ambient air, soil, rivers and the
sea. Moreover, negative effects of natural phenomena, mainly flooding, resulted
in the adoption of European legislation. The legal acts adopted in response to
environmental disasters contain both command and control instruments and
economic instruments. A number of legal acts establish obligations for member
states and operators that deal with hazardous substances. Industrial accidents
boosted the adoption of a liability scheme in order to implement the polluter-pays
principle and the Structural Funds provide financial means in order to support
flood protection. In European social policy, the closure of the Renault plant in
Vilvoorde and the resultant loss of thousands of jobs forwarded the adoption of a
pending draft directive that establishes a legal framework for the information and
consultation of employees.
Both European environmental policy and European social policy witnessed
direct effects of single incidents on the choice of policy instruments. However,
while the closure of the plant in Vilvoorde represents the only considerable
instance in European social policy, there is a number of instances in European
environmental policy, where single incidents of environmental disasters
contributed to the adoption of command and control instruments and economic
instruments in the form of European legislation. Furthermore, the establishment
of an emission trading scheme in the EU is a result of the Kyoto Protocol to the
United Nations Framework Convention on Climate Change. By implementing
the provisions of the Kyoto Protocol, the emission trading directive introduces a
novel economic instrument in the EU. However, the Kyoto Protocol represents
the only decision by international organisations that directly affected the choice of
policy instruments in European environmental policy. In European social policy,
a comparable decision was absent. The direct effects that stem from decisions by
Table 5.5 External Events in European Environmental Policy and

External Events
International
Single Incidents Social Systems
Organisations
European OECD, OCHA,
Environmental Economic
Environmental Policy UNEP, UNECE +
Disasters +++ Development +
Kyoto Protocol ++
European Economic
Plant Closure ++ OECD, ILO +
Social Policy Development +
Note: Effect of external events on the choice of policy instruments: +++ direct/frequent, ++
direct/rare, + indirect.
international organisations and, mainly, from single incidents are by far greater
in European environmental policy than in European social policy.
While the direct effects of external events on the choice of policy instruments
in the two policy areas differ, the indirect effects are similar. Indirect effects result
from decisions by international organisations and social systems that relate to
other policy areas. Both in European environmental policy and European social
policy, political actors made use of information and ideas provided by international
organisations. Environmental policy ideas, such as the polluter-pays principle
and the precautionary principle, were developed by the OECD and applied
at the European level. Also European measures that aim to foster employment
were influenced by OECD provisions. In the Seveso II directive, the European
Commission referred to a UNECE convention that deals with industrial accidents.
The Commission also made use of information on the mining accident in Baia
Mare provided by UNEP and OCHA. When European directives on health and
safety were adopted, political actors looked at standards provided by the ILO.
In both policy areas, the economic development represents the main external
event that occurs in a social system not primarily considered by European
environmental policy and European social policy. A poor economic growth and
a competitive disadvantage in relation to the economies of other countries put
constraints on political steering in environmental policy and social policy. Those
political actors gain support who argue that economic growth has to be fostered
first before further environmental and social goals are pursued. The argumentation
proceeds that the regulatory burden on industry has to be reduced in order to
foster economic growth. Thus, command and control instruments and hard law
should not be adopted. If any policy measure is taken, it should be implemented
by suasive instruments and soft law. In contrast, actors that advocate economic
growth on the one hand and environmental protection and social equity on the
other as complementary policy goals face political opposition that hampers the
promotion of command and control legislation.
5.6 The Choice of Policy Instruments
The choice of policy instruments depends on the values of situational structures. So

far, this statement represents the general answer to the research question: Why do
political actors choose certain policy instruments? This statement is inferred from
the empirical data that has been systematically compared in the previous sections
of this chapter. European environmental policy and European social policy witness
differences in the choice of policy instruments. Moreover, situational structures
in European environmental policy differ from situational structures in European
social policy, while the other potentially explanatory factors identified in Chapter
1 show similar values in both policy areas. Thus, according to the logic of the
most similar system design (cf. section 2), situational structures may account for
the emergence of policy instruments. The similarities and differences between
European Environmental Policy and European social policy are shown in Tables
5.6 and 5.7, respectively. The two tables summarise the empirical comparison
conducted in the sections 5.1 to 5.5. In addition, Table 5.6 mentions the similarity
between the two policy areas in respect of the policy type discussed in section 2.2
and the mode of interaction described in section 1.4.4.
By applying the logic of the most similar system design, situational structures
are identified as explanatory factors of policy instruments. However, whether
institutions, the politicisation of policy problems and external events cause the
emergence of specific policy instruments may only be conjectured on the basis
of theoretical thought. By using a theoretical framework, a social mechanism is
identified that links the explanatory factors to the emergence of policy instruments
and specifies the sequence of events and conditions that results in the adoption of
a certain policy instrument (cf. section 1.3). The theoretical framework developed
in Chapter 1 allows the interpretation of the empirical data described in Chapter 3
and Chapter 4 in a way that provides a specific answer to the research question by
explaining the choice of policy instruments in European environmental policy and
European social policy, as shall be shown in the remainder of this chapter.
In principle, decision-making by political actors is facilitated if institutions
reduce the number of veto points and veto players, policy problems are not highly
politicised, and external events increase the pressure on political actors to take
action. Hence, decision-making is easier in European environmental policy than in
European social policy. There are less veto points and veto players in European
environmental policy than in European social policy because more decisions are
subject to qualified majority voting and private actors, as employers’ associations
and trade unions in social policy, are not capable of preventing the commencement
of the legislative process. Furthermore, the politicisation of policy problems is lower
in European environmental policy than in European social policy because national
governments consider solving social policy problems as one element of their primal
authority. Welfare regimes of the member states are more diverse and more closely
related to the legitimacy of national governments than regulatory approaches of
environmental policy. Finally, external events put a higher pressure on actors of
Table 5.6 Similarities between European Environmental Policy and

Policy Mode of Cleavage Politicisation External

Type Interaction Structure of Policy Events
Problems
European
Indirect
Level vs. Low due to
Effects of
National Scientific
European International
Regulatory Level; Evidence;
Environmental Negotiation Organisations
Policy Economic High due to
Policy and
Growth vs. Economic
Economic
Environmental Cost
Development
Protection
Low due Indirect
European
to Agreed Effects of
Level vs.
European Policy International
Regulatory National
Social Negotiation Objectives; Organisations
Policy Level;
Policy High due to and
Economic
Economic Economic
Growth vs.
Cost Development
Social Equity
Table 5.7 Differences between European Environmental Policy and

Situational Structures Policy

Instruments
InstitutionsPoliticisation of External Events
Policy Problems
Frequent Direct
Dominance of
Effects of Single Dominance of
European Legislative National
Incidents; Rare Command and
Environmental Procedure and Regulatory
Direct Effects Control/Hard
Policy Qualified Approaches
of International Law
Majority Voting
Organisations
Significance of Significance of
Social Dialogue Command and
European and Legislative National Rare Direct Control/Hard
Social Procedures, Welfare Effects of Single Law and
Policy Unanimity and Regimes Incidents Suasive
Qualified Instruments/Soft
Majority Voting Law
environmental policy than on actors of social policy to make political decisions

because environmental disasters directly affect human health and are highly visible
and relatively frequent. Comparable events are rare in social policy.
Situational structures account for the fact that in European environmental
policy more policy outputs were adopted than in European social policy. In a
similar vein, situational structures also account for the adoption of command
and control legislation. The values of situational structures that further decision-
making also promote the adoption of command and control legislation. However,
in order to explain the choice of policy instruments further consideration is
necessary. Political actors do not only choose between adopting a policy output
and not adopting a policy output. Rather, political actors choose between both
policy goals and policy instruments contained in policy outputs. Characteristics of
policy instruments represent the link between policy goals and policy instruments
on the one hand and between actors’ motivation during policy formulation and the
effects of the policy output during its implementation on the other. Actors chose a
policy instrument because of the characteristics they ascribe to the instrument in
respect of achieving a specific policy goal.
Within the actor constellations of European environmental policy and European
social policy actors whose primary policy goal is environmental protection and
social equity, respectively, oppose actors who primarily aim at economic growth.
Moreover, actors who prefer political steering at the European level oppose
actors who prefer political steering at the national level. Those actors who are
interested in environmental protection and social equity favour command and
control instruments. They believe that command and control instruments are
the most effective instruments in order to solve environmental and social policy
problems because they exert a high degree of coercion on those addressees of
political steering that do not pursue high environmental and social standards.
In contrast, those actors who have an interest in economic growth reject public
interventions in the market by command and control instruments, but demand
suasive instruments, if any market-correcting measures are adopted. They
believe that businesses have to be relieved of the regulatory burden in order to
foster economic growth that constitutes the prerequisite for both environmental
protection and social equity. Thus, they believe that suasive instruments are the
most effective instruments in order to solve environmental and social policy
problems because they do not exert a high degree of coercion on businesses. The
type of economic governance instruments may not be unambiguously assigned
to one of the two positions described in this paragraph. Economic instruments
provide market-based incentives for the addressees of political steering. These
incentives may be negative, e.g. in the case of taxation, or positive, e.g. in the
case of subsidies. Economic instruments that provide negative incentives resemble
command and control instruments, whereas economic instruments that provide
positive incentives resemble suasive instruments.
As governance instruments, also legal instrument are related to policy goals.
Actors who favour regulation at the European level prefer hard law, whereas actors
who favour regulation at the national level call for soft law. Member states that aim
to conserve their national autonomy in a specific policy area or issue area oppose
the adoption of hard law, but are less averse to the adoption of soft law. However,
the preferred level of governance is also related to substantive consideration.
Those actors who call for high standards of environmental protection and social
equity demand that European policy outputs should be adopted in the form of hard
law because it compels member states to implement these standards. In contrast,
those actors who primarily aim at economic growth prefer soft law because it does
not compel member states to implement environmental and social provisions that
constrain the ultimate addressees of political steering. Hence, the choice of both
governance instruments and legal instruments are subject to the same consideration
about the degree of coercion exerted on the addressees of political steering, the
effectiveness ascribed to the respective policy instrument, and the interest and
belief pursued by political actors.
In European environmental policy, command and control legislation is the
dominant type of policy instruments because the situational structures provide those
actors who pursue environmental protection with the opportunity to adopt command
and control legislation. Institutions favour the adoption of command and control
legislation. Member states and political parties that are interested in a high level
of environmental protection engage in decision-making. Since most decisions may
be adopted by qualified majority voting, member states that oppose more stringent
legal standards may be outvoted in the Council. In the European Parliament,
environmental legislation may be adopted by an absolute majority of the Members
of Parliament. The facilitating effect of institutions is not always necessary in order
to reach a decision because of the relatively low politicisation of environmental
policy problems. Political actors do not use veto points in order to block decisions
if the policy issue is not contested. Although solutions to environmental problems
involve economic cost and, thus, create political conflict, several environmental
measures may be decided on the basis of scientific evidence that reduces the level
of conflict. Also differences in national regulatory approaches may provoke political
conflict. However, since national approaches of environmental regulation do not
differ to a great extent between the member states and are not deeply rooted in
national policy-making, they do not result in a high politicisation of environmental
problems at the European level. Finally, environmental disasters strengthen the
position of environmental actors within the actor constellation. Environmental
disasters highlight adverse effects of consumption and production on the natural
environment and human health. Thus, they increase the public acceptance of more
stringent environmental policy measures and the pressure on political actors to adopt
environmental policy outputs.
In European social policy both command and control legislation and suasive
instruments in the form of soft law are significant because situational structures
both enable those actors who pursue social equity to adopt command and control
legislation in European policy outputs and provide those actors who aim to reduce
the regulatory burden on the addressees of political steering with the opportunity
to realise suasive instruments and soft law. In this context, suasive instruments and
soft law represent the lowest common denominator. On the one hand, actors who
prefer command and control legislation prefer suasive instruments and soft law
to the absence of any European regulation. On the other hand, actors who reject
any market-correcting policy measures prefer suasive instruments and soft law
to command and control legislation. Institutions both facilitate and hamper the
adoption of command and control legislation. They provide several organisations
with access to the decision-making process. Since social dialogue may result both
in legislation and autonomous agreements between trade unions and employers’
associations, the boundary rules of European social policy do not favour a specific
type of policy instruments. The effect of decision rules is also twofold. Qualified
majority voting in the Council facilitates the adoption of command and control
legislation, whereas several decisions require unanimity that enables actors who
oppose the European social standards at stake to block the decision. The requirement
of unanimity affects decision-making because the politicisation of social policy
problems is high. Political actors agree on policy measures that enhance health
and safety at the workplace and combat discrimination. Nevertheless, in other
issue areas the politicisation of social policy problems is high because solutions
to social policy problems create economic costs and national welfare regimes,
which would be constrained by European command and control legislation, are
essential to the legitimacy of national governments and differ to a great extent
between the member states. The high politicisation of social policy problems and
the requirement of unanimity in the Council prevent political actors from adopting
command and control legislation. External events that point to policy problems
and may be used as a justification for a higher regulatory burden on the addressees
of political steering are rare in European social policy.
Chapter 6
Conclusion
Policy instruments emerge as a result of situational structures. Institutions, the

politicisation of policy problems and external events account for the emergence
of policy instruments. Institutions that facilitate decision-making, a low
politicisation of policy problems that does not rise political conflict and external
events that increase public pressure on political actors to make decisions result
in the emergence of command and control instruments and hard law. Vice versa,
institutions that provide a number of veto points, a high politicisation of policy
problems that provoke political conflict during policy formulation and the absence
of external events account for the emergence of suasive instruments and soft law,
if any regulation is adopted. The emergence of economic governance instruments
may be explained in the same way depending on whether economic instruments
provide negative or positive incentives. The explanation of command and control
instruments also applies to economic instruments that provide negative incentives.
In contrast, economic instruments that provide the addressees of political steering
with positive incentives may emerge under conditions that account for the
emergence of suasive instruments.
Formulated from an actor-centred perspective the answer to the research
question gets more elaborate, although the conclusion that situational structures
explain the choice of policy instruments in the manner just mentioned does
not change. Political actors are motivated by interests and beliefs. They aim to
transfer their preferred policy instrument in public policy outputs. Which policy
instrument political actors prefer depend on their interests and beliefs, the degree
of coercion the policy instrument exerts on the addressees of political steering,
and the effectiveness ascribed to the policy instrument. Furthermore, the actors’
preference for a certain policy instrument is closely related to the policy goal that is
supposed to be implemented by using the policy instrument. During the process of
policy formulation, institutions, the politicisation of policy problems and external
events provide political actors with both opportunities and constraints. As a result
of situational structures, some actors obtain an advantage, while other actors are at
a disadvantage within the actor constellation of the policy area.
If institutions provide for qualified majority voting, a group of actors who
pursue a common interest or belief may more easily adopt a policy instrument
than if unanimity is required. If a decision requires unanimity, a single actor may
block a policy output that does not correspond to their interest or belief. The
politicisation of a policy problem also refers to the resistance political actors face,
when they aim to adopt their preferred policy instrument. If the politicisation of a
policy problem is low, political actors are not prompted to oppose the adoption of
a policy instrument. However, if a policy problem is highly politicised, political

conflict emerges that hampers the adoption of policy instruments that exert a
high degree of coercion on the addressees of political steering. External events
create public attention and put pressure on decision-making and may, thus, tip the
balance in favour of those actors who aim to adopt coercive policy instruments.
Political actors may use external events in order to promote their policy goals and
their preferred policy instruments. They do not have this opportunity if external
events are absent.
External events that affect policy-making in the policy area occur sporadically.
Industrial accidents, flooding, mass dismissals and economic crises do not regularly
affect the choice of policy instruments, although some of these events show a
regular pattern. Political actors responded to industrial accidents by adopting
environmental provisions that are to be implemented by command and control
legislation. The mass dismissal at Vilvoorde encouraged political actors to adopt
legislation that establishes standards of information and consultation of employees.
In contrast, a poor economic development strengthens the position of those actors
who call for a reduction of the regulatory burden on industry in order to foster
economic growth. As external events, institutions and the politicisation of policy
problems shape the opportunities of political actors. Furthermore, the effects of
institutions and the politicisation of policy instruments are mutually reinforcing.
If the politicisation of a policy problem is high and decision-making requires
unanimity, political actors are likely to make use of veto points in order to prevent
command and control legislation. The adoption of eco-taxes at the European level
failed because member states made use of veto points in order to preserve their
national sovereignty. Vice versa, if policy problems are not highly politicised and
policy outputs may be adopted by qualified majority voting, political actors are
likely to agree on command and control legislation. Several legal standards of
health and safety at the workplace were passed by qualified majority voting.
Policy problems are highly politicised if their solutions involve economic
cost or affect the national sovereignty of member states. Thus, highly politicised
policy problems result in conflict during policy-making. Political conflict includes
conflict about policy instruments because different types of policy instruments
have different effects on the addressees of political steering. The degree of
coercion a policy instrument exerts on the addressees of political steering
goes hand in hand with the effectiveness political actors ascribe to the policy
instrument. Political parties and NGOs that pursue environmental protection and
social equity, respectively, demand coercive governance instruments because they
compel businesses to comply with environmental and social standards. Thus, they
consider command and control instruments most effective. In contrast, employers’
associations and political parties that aim at fostering economic growth call for
flexible governance instruments or the absence of any regulation in order to not
constrain industry. They regard suasive instruments as effective. In a similar vein,
member states that aim at a harmonisation of environmental and social policies at
the European level call for hard law because it is supposed to effectively establish
Conclusion 181
common European standards. In contrast, member states that aim to preserve

their national sovereignty demand soft law. They argue that soft law represents
an effective instrument to solve policy problems in a flexible and decentralised
manner.
The adoption of command and control instruments and hard law is demanded
in order to effectively implement a specific policy goal also against the resistance
of the addressees of political steering. In contrast, suasive instruments and soft
law are put forth in order to reduce the regulatory burden on the addressees of
political steering. If a policy goal is contested, those actors who support the policy
goal prefer command and control instruments and hard law. Environmental NGOs
call for legal standards of environmental protection, trade unions demand binding
standards of working and living conditions, and employers’ associations support
European legislation that contributes to the completion of the common market.
Those actors who pursue a different policy goal and do not rely on other actors
to achieve their policy goal prefer suasive instruments and soft law. Suasive
instruments and soft law create the opportunity for actors to agree to commonly
accepted policy goals without being obliged to bear the cost of implementation.
The adoption of command and control legislation is subject to political conflict if
policy goals are contested and the implementation is costly. Vice versa, if political
actors agree on policy goals, the use of policy instruments is not contested. In this
case, coercive policy instruments are considered as neither necessary in order to
effectively implement the policy goal nor as a burden on the addressees of political
steering because the actors involved aim to achieve a common policy goal.
Command and control instruments and hard law are considered necessary to the
effective implementation of a policy goal if the policy goal is contested. However,
contested policy goals frequently occur in issue areas in which the politicisation
of policy problems is high and decisions require unanimity. Thus, proponents of
command and control legislation face unfavourable situational structures in those
issue areas where they consider coercive policy instruments as relevant to an
effective implementation of their policy goals. Vice versa, in issue areas in which
policy problems are not highly politicised and decisions may be made by qualified
majority voting the adoption of command and control legislation is facilitated, but
not regarded as necessary as in issue areas characterised by a high level of conflict.
Hence, actors whose interests correspond to suasive instruments and soft law, here
economic growth, have an advantage because they are in an advantageous position
in issue areas characterised by a high level of political conflict.
The explanation of the choice of policy instruments summarised in general
terms in the previous paragraphs applies to European environmental policy and
European social policy. The explanation is based on a theoretical framework that
comprises theoretical approaches that were mainly developed in the context of
policy-making in nation states. Hence, the explanation of policy instruments put
forth in this study may also be applied to other levels of governance. Nevertheless,
only data is provided that allows inferences about the choice of policy instruments
in European environmental policy and European social policy. It may be generalised
to further levels of governance and to further policy areas. If the inferences made
in this study are correct, the explanation of policy instruments is supposed to apply
also to those European policy areas that are dominated by regulatory policies, such
as consumer policy, telecommunication policy or transport policy.
Policy instruments are analysed by a number of studies. The existing research
that deals with policy instruments was summarised in three hypotheses that
are characterised by a distinct level and type of conflict. The level and type of
conflict again is closely related to the action orientation of political actors.
Political actors may be motivated by interests, beliefs and the effective solution
to policy problems. However, what really motivates political actors may not be
observed, but only inferred from their activities and statements. By comparing the
theoretical frameworks of actor-centred institutionalism and the advocacy coalition
framework, it was argued that interests and beliefs complement one another in
order to explain the policy process in an actor-centred way. Also the empirical
analysis showed that interests and beliefs go hand in hand. It may be formulated
that political actors pursue the belief that is in their interest. Furthermore, the
search for effective solutions to policy problems is mediated by interests and
beliefs. The effectiveness ascribed to a policy instrument depends on actors’
interests and beliefs. Despite rhetorical demands for effective solutions to policy
problems, political actors pursue problem-solving only under specific structural
conditions. If policy problems are not highly politicised and the level of conflict is
low, political actors are interested and believe in problem-solving.
European environmental policy and European social policy represent two
distinct policy areas. Nevertheless, in both policy areas conflict between the
economic goals of growth and competitiveness and the non-economic goals
of environmental protection and social equity, respectively, occurs. There are
interdependencies between economic growth, environmental protection and
social equity. Policy-making in European environmental policy and European
social policy is shaped by negative reciprocal effects between economic and
non-economic goals that are highlighted by political actors. However, there are
also positive reciprocal effects that are raised in the political debate. The concept
of sustainability reconciles economic, environmental and social policy goals.
In 1997, the objective of a sustainable development was included in the Treaty
of Amsterdam. The Commission (1997a) pointed to the link between economy,
environment and employment and put forth a strategy to promote economic
competitiveness by at the same time preserving natural resources and fostering
employment. In 2000, the heads of state and government decided at the Lisbon
Council to promote both economic competitiveness and employment in the EU.
A year later, at the European Council in Gothenburg an environmental dimension
was added to the Lisbon strategy. In 2006, the sustainable development strategy of
the EU was renewed. Nevertheless, actors who pursue environmental protection
and social equity (ETUC/Social Platform/EEB 2007) criticise a business-friendly
interpretation of sustainability and call for strengthening the environmental
and social dimensions. There are a number of attempts to reconcile economic,
Conclusion 183
environmental and social goals. However, whether they will weaken the cleavages
in European environmental policy and European social policy remains to be seen.
External events, such as scientific evidence of climate change, rising oil prices or
citizens’ fear of social exclusion as a result from changed economic conditions
may encourage market-correcting measures of European environmental policy
and European social policy.
Annex
Interview Guideline
1. Questions about the Policy Area

a. What do you think is the function or goal of European environmental/social
policy?
b. What people and organisations are involved in European environmental/
social policy?
c. With whom do you coordinate your actions? With whom do you exchange
information and other resources?
d. There are different forms of policy outputs, like directives, regulations,
recommendations and resolutions. Which policy outputs are relevant
to European environmental/social policy? Among these forms of policy
outputs, which are most relevant to regulation in European environmental/
social policy? Which are less relevant? Has there been a change in the use
of certain policy outputs?
2. Questions about the Policy Process

e. Have there been policy outputs which produced a high level of conflict
among the people and organisations involved? Can you name single policy
outputs which were highly contested?
f. Have there been policy outputs which were not contested and were passed
with a high level of consent? Can you name single policy outputs about
which the people and organisations involved strongly agreed?
g. Are there people or organisations with whom you usually agree? Who are
these people and organisations? Which interests or views do you share with
these people and organisations?
h. Are there people or organisations with whom you often disagree and
seldom agree? Who are these people and organisations? What is the subject
of disagreement?
3. Questions about the Way Policy Goals are Reached (Policy Instruments)
i. Is there a dominant way in which policy goals are aimed to reach in
environmental/social policy? Have there been any changes in the use of
policy instruments?
j. Has there been an impetus from outside European environmental/social
policy which advocated a certain way of reaching policy goals, e.g.
an impetus from domestic traditions, other policy areas or international
organisations?
k. Have there been special events which had an important impact on the
way policy goals are aimed to reach, like e.g. an economic crisis or an
environmental disaster?
l. Who decides on which instrument is chosen? What is the basic rationale
behind choosing different policy instruments?
m. Do you or your organisation have a preference for a certain kind of policy
instruments? Which policy instruments do you prefer? Why?
4. Concluding Question
n. Do you want to add any points which are relevant to the choice of policy
instruments which have not been mentioned so far?
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Index
action orientations/interaction orientations cooperation procedure 47, 140–1, 145

33, 53–4, 69–71, 182 complexity, reduction of 3, 31, 36–7, 51,
actor-centred institutionalism 5–6, 31–3, 70–1
35–9, 182 content analysis, qualitative 68–71
actor constellations 33, 37–9, 50–2, 81–6, Council of the European Union/Council
127–32, 176 of Ministers 47, 53, 82–3, 86–9,
advocacy coalitions 34, 97–8 91–4, 128, 132–5, 138–42, 164–8
advocacy coalition framework 5, 31, 33–5,
37–8, 51, 71, 182 decision rules 5, 15, 32, 35, 46, 53, 91,
air pollution control 100–3 138, 140, 166–8
Amsterdam, Treaty of 92, 121, 139, 141,
152, 169 eco-management and audit scheme
Aznacóllar, mining accident in 105–7 (EMAS) 80, 160–1
economic development/economic growth
Baia Mare, mining accident in 105–6, 109, 83–4, 111–13, 129–30, 154, 163–6,
173 173
bargaining 53–4 economic policy 111, 118–20
belief system 24–5, 33–5, 37, 71 emission trading 79, 89–90, 104, 110–11,
boundary rules 5, 32, 46, 53, 91, 138, 114, 161–2, 172
166–8 Environmental Action Programme 74–5,
78–9, 91
cases, selection of 63–4 environmental liability 79, 89, 106–8,
CEEP 128, 132, 136–7, 142, 146, 151 161–2
Christian democrats 26–7, 45, 52, 85, environmental policy integration 76–7,
131–2, 145, 149 111
combustion plant directive 99 environmental taxes 79, 84–5, 87, 89–90
conservatives/conservatism 26–7, 45, 52, Erika, shipwreck of the oil tanker 107
85, 131–2, 145, 159, 171 European Commission 43, 47, 53, 68,
cleavages/cleavage structure 21, 24–5, 27, 82–3, 85–8, 91–4, 106–7, 115, 128,
47, 51–2, 65, 81–6, 95, 112–15, 133–4, 138–42, 164, 166, 168
127–32, 156–8, 163–6 European Social Fund (ESF) 122, 125,
co-decision procedure 47, 92–4, 140, 142, 161
155, 167 European Trade Union Confederation
collective agreements 25, 121, 138, 140–2 (ETUC) 68, 128, 132, 136, 142,
Committee of the Regions 82, 128, 135 146, 150–51
common goods 48–50, 73–4, 95 European Council 112, 182
common market/internal market 22, 27, European Economic and Social Committee
66, 74–5, 92–3, 95, 118–20, 130, 82, 128, 135–6
138, 148–9, 167, 170–1 European Employment Strategy (EES) 26,
comparative analysis 3–4, 55–7, 158 152, 154
consultation procedure 140, 142, 167
European Environmental Bureau (EEB) modes of interaction 33, 39, 52–4

68, 82–3, 87, 89–90, 103, 114 most different system design 56–7
European integration 47, 51–2, 119 most similar system design 56–7, 63–4,
European Parliament 47, 53, 68, 82–3, 174
85–8, 91–4, 103, 106, 115, 128, negative externalities 48–50, 73–4, 89
131–4, 138, 140–42, 163–4, 166, negotiation 39, 53–4
168
European works council directive 149–50 Nice, Treaty of 121, 139
external events 39, 50–51, 103–12, 153–6,
171–3 OECD 26, 109, 156, 173
open method of coordination (OMC) 22,
fixed-term work, framework agreement 26, 29, 112, 122–4, 126, 134–6,
and directive on 147, 151–2 150, 152–3, 156, 162
flexicurity 119–20, 134–5 organisations
flooding 108, 172 as corporate actors 32, 37, 58, 60–62,
67–9, 81–3, 86–91, 127–9, 132–7,
Globalisation Fund 154–5 163–6
governance 1–2, 11, 13–15, 17, 33, 43 international 25–6, 29, 104, 109–11,
greens, the 52, 85, 131, 145 154–6, 171–3
ideas 25–7, 79, 109–10, 173 parental leave directive 150–51

institutions 5, 24, 28, 31–3, 36–7, 39–40, part-time work, framework agreement and
46–8, 66, 91–4, 138–42, 166–8 directive on 147, 151–2
interests and beliefs 21–8, 44–6, 69–71, policy area 55–62, 66–7
94, 112–15, 156–8 policy diffusion 29–30, 110–11
interviews with experts 67–8 policy implementation 19, 43–4, 87–90,
102–3, 113–15, 131, 133–7, 141,
joint-decision trap 47–8 156–7, 165, 176, 181
policy instruments
Kyoto Protocol 98, 104, 110–11, 172–3 characteristics of 39–46, 112–16,
156–58
legal basis for policy measures 75–6, classifications of 15–17
92–3, 118, 138–9, 167 governance instruments 18–19, 78–80,
liberals/liberalism 26–7, 45–6, 52, 85, 123–5
118–19, 131, 143, 145, 148, 157, legal instruments 19–20, 80–81, 125–7
171 types of 17–8, 77–8, 122–3, 160–62
Lisbon strategy 104, 112, 134 policy learning/policy-oriented learning
Lisbon summit 22, 26, 123–4, 152 29–31, 35, 152
policy networks 13, 59–60
Maastricht, Treaty of 47, 92, 121, 123–5, policy problems, politicisation of 39–40,
139, 142, 151–2, 168–9 48–50, 94–6, 142–4, 169–71
market-correcting policies 65, 73–4, policy subsystem 34
119–21, 129–31, 143, 157, 165, policy transfer 29–30, 156
176, 178 policy type 41–2, 56, 63–4, 169
market failure 42–3, 65, 73–4, 83–4, political institutions 62
117–18 political steering 2, 11–15, 25, 42–4, 62
market-making policies 65, 83–4, 119–21, polluter-pays principle 79, 106, 162
130, 137, 143, 157, 164–5 posting of workers directive 129–30, 149
Index 213
power 25–8 social mechanism 37–8, 174

precautionary principle 97–8, 101–2 Social Platform 128, 132, 137
problem-solving 21, 28–31, 54 social regulation 65–6, 118
social security systems 117, 130, 168
qualified majority voting 24, 28, 30, 32, social systems 58–60, 67, 172–3
47, 53, 84, 91–4, 138–40, 142, soft law 4, 19–20
166–9, 174, 177–8 sustainable development/sustainability
75–6, 83–4, 111, 182
race to the bottom 74, 136 systems theory 11–13, 31, 35, 43, 50, 58–9
race to the top 74
REACH 96–8, 165–6 temporary agency work 146–8
redistributive policy/redistribution 41, thematic strategies 88, 103
48–50, 59, 77, 117–18, 143 transboundary pollution 74, 90, 95, 109
regulatory approaches 23–4, 30, 95–6, 99,
170–71 unanimity 22, 24, 28, 30–2, 47, 53, 84–5,
regulatory competition 23–4, 30 92–4, 138–42, 166–9, 178
regulatory policy 41, 63–5, 95, 118 UNICE/BusinessEurope 68, 82–3, 86–7,
89–91, 113–14, 128, 132, 137, 142,
scientific evidence 101–2, 169–70 146, 150–51
services directive 148–9
Seveso, disaster of 104–5 veto players/veto points 39, 46–8, 77,
Seveso II directive 105, 109, 173 93–4, 142, 174
Single European Act 27, 47, 92, 120, 138, Vilvoorde, plant closure in 155, 172
167
Social Action Programme 120 waste management 101–2, 106
Social Chapter 121, 139 water protection 100–101
social democrats/social democracy 26–7, welfare regimes 22, 29, 45, 129–31,
45–6, 52, 85, 118–19, 131–2, 143, 152–3, 171, 174
145, 148–9, 157, 171 white paper on European governance 43
social dialogue 124–5, 132–8, 141–2, working time directive 144–6, 148
150–52, 157, 162, 165–8

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The Politics of Means and Ends

Policy Instruments in the European Union

British Library Cataloguing in Publication Data

Library of Congress Cataloging-in-Publication Data

List of Figures and Tables  vii

1 Explaining Policy Instruments  11

2 Comparing Policy Areas  55

3 European Environmental Policy  73

4 European Social Policy  117

5 Policy Instruments in European Environmental Policy

1.1 Explanation of Policy Instruments 39

1.1 Policy Instruments in the EU 18

CEEP European Centre of Enterprises with Public Participation and of

 Konstanz, April 2010

The European Commission plans to introduce a trading scheme for renewable

Relevance of Policy Instruments

A theoretical framework identifies explanatory factors and specifies the linkage

Several contributions of political science have structured theoretical approaches

The methodical procedure discussed in Chapter 2 is applied in order to provide

coercion contained in policy instruments, different actors also consider different

safety at work and anti-discrimination are on the agenda. In contrast, a number of

constellations. Whereas systems theory approaches exclusively focus on system

responsibility for regulation and are democratically legitimised and accountable

1.1 Types of Policy Instruments

Classifications of Policy Instruments

An early and parsimonious classification is provided by Offe (1975: 85–100). He

these services, the provision of infrastructure indirectly influences the actions of

Table 1.1 Policy Instruments in the EU

Three types of governance instruments can be identified: command and control

government decisions or political parties compete for electoral votes. In relation to

1.2 Strands of Existing Research

1.2.1 Conflict Between National Interests

Nation states have an interest in enhancing national welfare, protecting their

Defending National Autonomy

National Interest Hypothesis

1.2.2 Conflict Between Ideological Beliefs

Distribution of Ideas and Power

Schäfer (2004, 2005, 2006b) analyses why nation states in international

compares negotiations and decision-making in the International Monetary Fund

Ideological Belief Hypothesis

1.2.3 Low Conflict due to Problem-solving

Combination of Policy Instruments

Policy Diffusion, Policy Learning and Policy Transfer

Whether policy instruments are effective is not only a matter of theoretical

1.3 Structure of the Explanation

Actor-Centred Institutionalism and Advocacy Coalition Framework

Derived from the analysis of political steering and societal self-organisation,

actors. Actors are motivated by self-interest, normative orientation, identity and

represented by changes in socio-economic conditions, changes in public opinion,

Structure and Agency

contingencies. Regardless of the commitment to integrate individual actors into

1.4 Factors Explaining Policy Instruments

of interaction and situational structures. Situational structures are represented by

Actor Constellations Modes of Interaction Policy Instruments

Figure 1.1 Explanation of Policy Instruments

1.4.1 Characteristics of Policy Instruments

Coercion is identified as a main characteristic of policy instruments relevant to

development of environment-friendly technologies (Färber 1993, Kirchgässner

the first preference of these authorities. Even if an implementing authority aims

Interests and Beliefs

Choosing a policy instrument that effectively implements a policy goal or

beliefs of political actors. The choice of a policy instrument is a political decision

1.4.2 Situational Structures

List of Figures and Tables vii

1 Explaining Policy Instruments 11

2 Comparing Policy Areas 55

3 European Environmental Policy 73

4 European Social Policy 117

1.1 Explanation of Policy Instruments 39

1.1 Policy Instruments in the EU 18

Konstanz, April 2010