Technocratic Europe

Via Crooked Timber & FT the discussion of democracy versus technocracy in seeking a resolution to the crises of competitiveness in Southern Europe. The common division in the EU has always seemed to be between the messy workings of democracy versus the technocracy competencies of the commission and the epistemic networks surrounding the policy making process. Clearly this picture has never been very easy to argue for in constitutional terms, with the council of ministers ceding power only slowly to the parliament, rather than the commission. But regardless of the underlying shifts in power structures, the concept of “output legitimacy” or the rather smart and representative policy makers as described by Fareed Zakaria in The Future Of Freedom has always been an easy argument whenever hard decisions had to be pushed through without popular votes in the member states. The principle of conferral clearly states why this is so, in letting the EU carry through policy in its areas of competence.

I have long argued that this is indeed one of the primary benefits of the EU. In granting the commission and the bureaucratic apparatus strong influence and a clear separation of powers, the EU can be effective in overcoming classic free rider problems in the relations between member states. The “integrationist” policies of the commission and the successive presidencies of the European Union clearly have elements of both spillover effects and intergovernmental bargains. The dominance of France & Germany during the recent crises has meant that the EU has aggressively imposed its new austerity programmes in an extremely harsh manner on member states, without accomodative monetary policy. The ECB’s reluctance to use its power to serve as a lender of last resort is also clearly a matter of appeasement towards Germany’s low labor costs. It is difficult to see how this could honestly be called output legitimacy, leading to protection of creditors at the expense of debtor countries, with the effects that internal devaluation must have on these states.

What has happened in both Italy and Greece then, seems counterproductive seen from any side. If indeed these countries need the enormous austerity packages (only as long as the ECB won’t take up its proper role) and structural reforms (they do), what is needed is a strong, popular leader who can interact legitimately with the other member states in the EU. If Mario Monti too easily cedes sovereignty to the EU, this will easily backfire and lead to swift elections, with a much stronger populist backlash than otherwise needed. Technocracy as described by every political scientist and economist in the last week means strict adherence to the principles of austerity, guided by the IMF and the EU, rather than democratic accountability.

The EU has held its output legitimacy precisely because it could be assumed that leaders of member states had legitimacy in the eyes of their own populations. In the most extreme version, the very presence of democratically elected, legitimate, leaders means that the EU as an institution does not need direct democratic input legitimacy, nor does it ever swing too much against the median state’s preference (ensured through unanimity and increasingly the qualified majority voting procedure). In the absence of legitimate leaders of member states, this relationship breaks down. Suffice to say, we’ll be watching closely.

  • Simon Berthelsen

    Great post, Niels.
    You’ve probably read this, but it is very interesting stuff:
    http://www.project-syndicate.org/commentary/tassinari4/English

    And a salute to you guys for making this blog – the only way to succeed is to try!

  • http://www.macroexposure.com Niels Madsen

    Thanks a lot Simon :) I have read his post, and Tassinari is always worth listening to. As I allude to in the post, i agree that the EU needs to be a technocratic machine, and that this is very much by design. If it is hard to pass laws, the ones that do get through are much more effective when managed in the way that the commission tends to gravitate towards. The problem here is that the EU has a somewhat sketchy legal basis for meddling in the economic affairs of member states. We all know that the Stability and Growth Pact quickly collapsed under its own weight. Since we do not yet have a clear cut enforcement mechanism for fiscal prudence, it seems as if the EU has taken to a meddling in domestic politics in a very unseemly way. What Tassinari seems to take for granted is that the policies will even work. As is clearly shown in the posts on the blog so far, we are both very skeptical as to the actual economic merits of structural reforms and austerity packages that are as heavily front-loaded as some of these deals are. This is saying nothing about the real political possibility of sustaining reform. This does seem a lot easier to do in Italy, based on the polls, but it is obviously not proceeding with popular support in Greece.

  • http://www.macroexposure.com Niels Madsen

    Thanks a lot Simon :) I have read his post, and Tassinari is always worth listening to. As I allude to in the post, i agree that the EU needs to be a technocratic machine, and that this is very much by design. If it is hard to pass laws, the ones that do get through are much more effective when managed in the way that the commission tends to gravitate towards. The problem here is that the EU has a somewhat sketchy legal basis for meddling in the economic affairs of member states. We all know that the Stability and Growth Pact quickly collapsed under its own weight. Since we do not yet have a clear cut enforcement mechanism for fiscal prudence, it seems as if the EU has taken to a meddling in domestic politics in a very unseemly way. What Tassinari seems to take for granted is that the policies will even work. As is clearly shown in the posts on the blog so far, we are both very skeptical as to the actual economic merits of structural reforms and austerity packages that are as heavily front-loaded as some of these deals are. This is saying nothing about the real political possibility of sustaining reform. This does seem a lot easier to do in Italy, based on the polls, but it is obviously not proceeding with popular support in Greece.

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