Policy coherence versus regulatory governance. Electricity reforms in Algeria and Morocco

The diffusion of independent regulatory agencies (IRAs) in utilities sectors in developing countries is underpinned by the idea that IRAs are highly effective institutional devices to signal policy credibility to private investors. But is it really so? Institutional economists tend to confirm the effectiveness of IRAs, while also highlighting the many factors that condition its positive impact on investments. Acknowledging the importance of interaction effects, this paper proposes to shift the level of analysis, moving away from IRAs to look at the overall complementarity between policy objectives, instruments, and the wider political context. In sum, it argues that IRAs are, as such, irrelevant. What matters instead is policy coherence. A comparison between two case studies on electricity policy reforms in Algeria and Morocco lends credit to the policy coherence approach. It shows that policy incoherence may deprive IRAs from any impact on sectoral evolution and that there are effective alternatives to IRA to signal policy credibility and attract investors. The paper concludes by suggesting practitioners to relax the focus on preconceived policy solutions, to be open to alternative policy approaches and to focus on helping developing countries designing coherent policies.     

The Limits of Europeanization: Regulatory Reforms in the Spanish and Portuguese Telecommunications and Electricity Sectors

The creation of a European Union‐level regulatory regime for telecommunications and electricity was a highly successful political initiative of the European Commission. However, this article argues that the causal link between European initiatives and national policy change is weak. Building on an emerging tradition of cross‐sector research of these two sectors, and considering two most similar European countries, the article applies a series of comparisons, including a stepwise comparative analysis of two countries (one a reluctant liberalizer, the other an enthusiastic one), of two sectors (a pacesetter and a footdragger), and of two time periods (before and after the regulatory reforms). We suggest that Spain and Portugal were able to shape their sectors according to the preferences of their national policy communities and in a context of a global shift in the way countries both within Europe and outside it defined their interests.     

Promotion of the Agricultural Sector and Political Power in Austria

In most industrialized countries farmers as a small and well orgnized group are ableto influence government decisions to get rent creating proposals enacted. Two different viewsare presented to explain why: the Chicagoan view (“Efficient Redistribution Hypothesis”)and the Virginian view (inefficient outcome of political bargaining). A vertically structuredempirical model of the Austrian farm sector is employed to test both hypotheses. Quantitativeresults of the welfare transfers from consumers/taxpayers to farmers and agribusiness firmsare derived and the political weights of these groups are presented.     

A Contagious Concept: Explaining the Spread of Privatization in the Telecommunications Sector

Qualitative studies suggest that the spread of privatization of public utilities is due to a change of the economic paradigm and institutional isomorphism pressures. However, current quantitative studies mostly account for domestic factors. These factors can explain differences in national privatization trajectories but cannot explain the large trend. Based on a quantitative analysis of privatizations in the telecommunications sector in 21 OECD countries, the article argues that emulation pressures can explain the trend toward privatization. The analysis suggests that privatization gained legitimacy as more and more governments emulated privatization policies they observed in countries they perceived as similar. However, the article finds no evidence of cross‐sectoral diffusion. Thus, according to the analysis, telecommunications privatization diffused within the same sector between countries, but not within the same country between different sectors.     

The Politics of Latin America’s Investment and Other Links with China: Contextualizing the Region’s Cash Chasing while Racking Richer Research Rewards

There are three positions about the impact of outward foreign direct investment (FDI) from China on the policies of Latin American and Caribbean (LAC) countries: the “Wealth is Power” camp, which associates political power with Chinese economic lures; the “Conditionalist” camp, which contends the international and domestic economic and political context determines the specific political effect of Chinese outward FDI (OFDI); and the “Politics is Power” camp, which believes no dramatic political changes have resulted from the economic stimuli of Chinese OFDI (COFDI) and associated economic lures. Case studies herein on Brazil and China, Argentina and China, Ecuador and China, and the Caribbean and China support the Conditionalist camp, albeit to differing degrees and for different reasons. Case studies herein on COFDI in Argentina and in Colombia also deepen our knowledge about the drivers of COFDI. They challenge those asserting that COFDI in LAC is driven purely by political motives. This piece also reviews and critiques the state of the literature on COFDI in LAC and suggests a pathway for moving to the next level. It specifically recommends researchers work to cumulate knowledge by asking similar kinds of questions across cases, exploit theory, and work on variable conceptualization and operationalization.

     

Informal Service Access in Pro-Cyclical Welfare States: A Comparison of Electricity Theft in Slums and Regular Residential Areas of Montevideo

Abstract

It is often thought that political incumbents in developing countries abandon the poor during economic crises because of narrow and pro-cyclical welfare policies. In contrast to that view, this article argues that informal transfers for those excluded from the welfare state represent an example of “social policy by other means”. During dire economic conditions, democratic incumbents, who need the support or acquiescence of dislocated groups, expand irregular access to the electricity service counter-cyclically. Comparative time series data from slums and residential areas of Montevideo show that electricity losses respond to the political provision of both informal social insurance and informal redistribution.     

The Formal Delegation of Regulatory Decisions in the Telecommunication Sector: An Explanation Using Classification Trees

Research on regulation has traditionally focused on studying the delegation of regulatory competencies from political principals to an independent regulatory agency. In this article, we argue that this delegation is nuanced by different factors that affect whether a specific regulatory decision is formally delegated. We examine and explain formal delegation patterns at the level of individual regulatory decisions in twelve countries located in Europe, Latin America, and South Asia. The data were gathered by coding the twelve countries' telecommunications legislation. The data analysis was undertaken using a classification tree model—a nonparametric model. We found that the maturity of the market has the greatest effect on the formal delegation of regulatory decisions, but this effect is also influenced by the other theoretical factors considered, particularly the level of political constraints and the type of regulation.     

Understanding the rise of the regulatory state of the South*

This paper, and the special issue it introduces, explores whether, and how, the rise of the regulatory state of the South, and its implications for processes of governance, are distinct from cases in the North. With the exception of a small but growing body of work on Latin America, most work on the regulatory state deals with the US or Europe, or takes a relatively undifferentiated “legal transplant” approach to the developing world. We use the term “the South” to invoke shared histories of many countries, rather than as a geographic delimiter, even while acknowledging continued and growing diversity among these countries, particularly in their engagement with globalization. We suggest that three aspects of this common context are important in characterizing the rise of the regulatory state of the South. The first contextual element is the presence of powerful external pressures, especially from international financial institutions, to adopt the institutional innovation of regulatory agencies in infrastructure sectors. The result is often an incomplete engagement with and insufficient embedding of regulatory agencies within local political and institutional context. A second is the greater intensity of redistributive politics in settings where infrastructure services are of extremely poor quality and often non‐existent. The resultant politics of distribution draws in other actors, such as the courts and civil society; regulation is too important to be left to the regulators. The third theme is that of limited state capacity, which we suggest has both “thin” and “thick” dimensions. Thin state capacity issues include prosaic concerns of budget, personnel and training; thick issues address the growing pressures on the state to manage multiple forms of engagement with diverse stakeholders in order to balance competing concerns of growth, efficiency and redistribution. These three themes provide a framework for this special issue, and for the case studies that follow. We focus on regulatory agencies in infrastructure sectors (water, electricity and telecoms) as a particular expression of the regulatory state, though we acknowledge that the two are by no means synonymous. The case studies are drawn from India, Colombia, Brazil, and the Philippines, and engage with one or more of these contextual elements. The intent is to draw out common themes that characterize a “regulatory state of the South,” while remaining sensitive to the variations in level of economic development and political institutional contexts within “the South.”     

Europeans outside the EU: Telecommunications and Electricity Reform in Norway and Switzerland

Norway and Switzerland are two western Europe states that are not members of the European Union (EU), and they are among a number of small and economically open states in which reform of economic sectors is seen to be incremental and reactive. This article poses two questions about the reform of telecommunications and electricity in the two countries. First, what impact has nonmembership of the EU had on the reforms? Second, have their small and open economies and policymaking systems—conceptualized as “social corporatism” in Norway and “liberal corporatism” in Switzerland—had a decisive impact? Some influence from the EU is evident, particularly in telecommunications, but parallels with EU states indicate that nonmembership of the EU, though influential, is not decisive. Although national characteristics matter, social and liberal forms of corporatism are shown to have limited utility. The “actor‐centered institutionalism” approach, which allows a more nuanced analysis of actors and national institutions, is better at explaining the reforms.     

Withering in the Heat? In Search of the Regulatory State in the Commonwealth Caribbean

This article explores the “regulatory state hypothesis” in the context of electricity and telecommunications regulation in Jamaica and Trinidad and Tobago. This article questions whether institutional features associated with the regulatory state are triggered by a preference for efficiency and added complexity within the policy domain. This article progresses in three steps. After setting out the regulatory state hypothesis as derived from the work by Giandomenico Majone and its empirical consequences, the article explores the four cases in brief. Although the empirical evidence broadly supports the regulatory state hypothesis across domains, states and over time, some puzzles in terms of reform trajectories and extent of regulatory reform do emerge. The final section explores these puzzles through an actor‐centered institutional perspective. It is suggested that the “regulatory state hypothesis” may be useful for predicting institutional arrangements, but has difficulty in accounting for the extent of regulatory reform and timing.     

Variation in central bank independence across countries: Some provisional empirical evidence

In this paper seven hypotheses to explain variation in central bank independence across countries are tested. The predictions based upon the theory that delegation of authority by politicians to the central bank is used as a commitment device are not supported: central bank independence is not higher the larger the employment motivated inflationary bias, the higher political instability or the larger the government debt. Central bank independence is positively related to historical inflation experience and negatively with political instability. We do only find limited support for the view that countries with a universal banking system and countries whose central banks do not regulate financial institutions have more independent central banks.     

Poor Nations, Rich Nations: A Theory of Governance

This article argues that the difference between poor countries and rich countries has to do with governance rather than resources. In emphasizing the importance of public administration in explaining economic success and failure, the author examines three general theories of governance (organizational, cultural, and structural‐functional) presented in Ferrel Heady's textbook in comparative administration. Political elasticity theory is introduced as a way to reconcile and overcome the weaknesses of these theories and to explain a number of unresolved questions in the literature having to do with decentralization, corruption, democracy, culture, and globalization, using comparative case studies (the Netherlands and Ghana, Singapore and Jamaica, and Japan and Nigeria). The implications of political elasticity theory for foreign aid are suggested at the conclusion, illustrated by a comparison of Spain and Mexico. What ties these case studies together is the heretofore unnoticed and/or unexplained fact that as countries prosper, political power takes on “rubber‐band” and “balloon” characteristics.     

THE “INVASION” OF MANUFACTURED CIVIL SOCIETY: GOVERNMENT–NONPROFIT PARTNERSHIPS IN A BRAZILIAN STATE

The growth of the nonprofit sector in Brazil has been conceptually similar to that of the Anglo‐Saxon Third Way, where the government promotes the creation of partnerships with civil society. This process has been criticized for creating a “manufactured civil society”. This study will investigate whether the same pattern can be observed in the Brazilian context, particularly within the Management Shock Reform implemented by Minas Gerais, one of the principal Brazilian states. Management Shock is guided by a governmental partnership discourse that promotes contractual partnerships with both businesses and nonprofits. We opted for a bottom‐up oriented research approach, aiming to comprehend the rationale for initiating and sustaining the partnerships revealed in the narratives that emerged from both government and nonprofit partners. Data were collected through semistructured interviews and content analysis of documents and the media. Results show the predominance of agency‐type partnerships, highlighting the centrality of the government and its techno‐bureaucratic role in fostering and maintaining Organização da Sociedade Civil de Interesse Público or Civil Society Organization of Public Interest designs. Differing from the Anglo‐Saxon context, we observed the “invasion” of market‐driven values in nonprofits and, to some extent, in government narratives. Copyright © 2011 John Wiley & Sons, Ltd.     

Capital united? Business unity in regulatory politics and the special place of finance

While organized business is a key actor in regulatory politics, its influence is often conditional on the level of unity or conflict occurring within the business community at any given time. Most contemporary regulatory policy interventions put pressure on the normal mechanisms of business unity, as they are highly targeted and sector‐specific. This raises the question of how business unity operates across a highly variegated economic terrain in which costs are asymmetric and free‐riding incentives are high. In this paper, we empirically assess patterns of business unity within regulatory policymaking across different regulated sectors. Our analysis utilizes data from hundreds of regulatory policy proposals and business community reactions to them in the telecommunications, energy, agriculture, pharmaceutical, and financial sectors over a variety of institutional contexts. We find considerable empirical support for the “finance capital unity” hypothesis – the notion that the financial sector enjoys more business unity than other regulated sectors of the economy. When the financial sector is faced with new regulations, business groups from other sectors frequently come to its aid.     

The Brazilian Association of Regulatory Agencies: Integrating levels,consolidating identities in the regulatory state in the south

This article discusses a unique organization in the regulatory world, the Brazilian Association of Regulatory Agencies (ABAR), which brings together federal, state, and municipal regulatory agencies across different policy sectors. The paper argues that as a regulatory policy network, ABAR has been crucial to the professional socialization, capacity building, and institutionalization of regulators in Brazil. Moreover, it has promoted their identity as professionals and differentiated them from politicians, regulatees, and societal actors. Thus, while ABAR raises the shield of expertise to secure independence from political and social interference, it has itself become a relevant actor in the country's regulatory political dynamics, contributing as such to the strengthening of the Brazilian regulatory state.     

Stakeholders in the political marketing context

Stakeholders influence the ability of organisations to achieve their aims, but little work has been carried out into understanding the stakeholder concept as applied to political actors. This paper first discusses the contextual nature of stakeholders using normative and strategic, and broad and narrow dimensions, integrating these 2 dimensions with power asymmetries and reciprocity. This paper then argues that a broad stakeholder concept for the political marketing context reconciles strategic and normative issues, as whilst successful interactions with specific stakeholders are necessary to achieve completed political exchanges of value, all stakeholders that exist in democratic societies have some form of moral claim to representation. As each political exchange of value consists of 3 consecutive interactions, the direct stakeholders in 1 interaction become indirect stakeholders in subsequent interactions. As each interaction occurs within a “marketplace” context, interactions in previous marketplace(s) together with expectations of the impact on future marketplace(s) influence current decision‐making. Finally, it is proposed that in the political marketing context, the stakeholder concept can be defined as “context‐specific agents that directly or indirectly influence or are influenced by the political actor.”     

Party system nationalization,presidential coalitions,and government spending

This paper argues that there is a strong relationship between geographical patterns of political parties' electoral performance and the composition of central government expenditures. When party system nationalization is high, the composition of spending will focus more on non-targetable expenditures, while targetable expenditures increase as the party system distribution of votes across different districts becomes less homogenous. However, the effect of party nationalization on spending type is conditioned by the size of the presidential coalition; targeted transfers will increase if the coalition size decreases, even if party nationalization is high. I find support for these hypotheses with an empirical analysis of district-level electoral and government expenditure data for several countries in Latin America between 1990 and 2006.     

Is the Westminster System Broken Beyond Repair?

Is Westminster dying as a useful conceptual encapsulation of a particular system of public administration? Scholarly critiques over the last decade have suggested Westminster civil services are evolving in ways that erode crucial Westminster “traditions.” Core elements including security of tenure, merit‐based selection, non‐partisanship, anonymity, and ministerial responsibility are all perceived as in decline or under attack. Influential commentators have proposed concepts such as “new political governance,” changing “public sector bargains,” “court government/politics,” and “presidentialization” to document and interpret these allegedly paradigmatic shifts in public administration. This article places these in context by canvasing different accounts of what Westminster is, before assessing the critiques about what it has become. The article argues that Westminster is not broken beyond repair, but rather it has been remolded to suit the needs of contemporary governance.     

Europeanization and Domestic Employment Policy Change: Conceptual and Methodological Background

The article deals with the differential domestic employment policy adaptation to the European Employment Strategy that occurred over the past years in two European countries—Italy and France. Building on the Europeanization and welfare state change literature, the contribution operationalizes the “goodness of fit” hypothesis and develops a “policy structure” approach for the analysis of domestic employment policy change. The main argument is that domestic adaptation to the European Union depends primarily on the preferences of key institutional and social actors, and not on the specific design of domestic institutions. More in general, the article not only supports the validity of the misfit hypothesis but also shows how the nature and intensity of domestic preferences do explain differential patterns of adaptation to Europe (policy transformation in the Italian case, policy adjustment in the French case) in similar conditions of policy “misfit.”     

The reputational basis of policy success in comparative perspective: Evidence from the education sector in Peru and Bolivia

This article, building on the emerging theoretical corpus of “reputation theory” provides an alternative explanation about how successful policies are obtained in contexts of bureaucratic weakness and volatile politics. The argument is that politicians choose to intervene in delivering successful policies based on how contributable such policies are to construct their political reputations. The findings suggest that in both countries, less tenured politicians face higher incentives to build their reputations, so they choose to deliver better policies to accumulate “successful experiences” as vitae for electoral purposes. Tenured politicians, in turn, opt for inaction or strategic delivery, to preserve their already won political reputations. The present article brings evidence from the education sector of Peru and Bolivia, a sector that has been at the core of these countries' priorities for decades. Through a mixed methods approach involving a panel regression and in-depth interviews, results obtained largely confirm this article's claims.