Institutional change and the evolution of the regulatory state: evidence from the Swiss case
| Date | 01 June 2014 |
| Published date | 01 June 2014 |
| DOI | 10.1177/0020852313514517 |
| Author | Martino Maggetti |
| Subject Matter | Special Issue Articles |
International Review of
Administrative Sciences
2014, Vol. 80(2) 276–297
!The Author(s) 2014
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DOI: 10.1177/0020852313514517
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International
Review of
Administrative
Sciences
Article
Institutional change and the
evolution of the regulatory state:
evidence from the Swiss case
Martino Maggetti
University of Zurich, Switzerland
Abstract
This article examines institutional change in a case that was expected to be particularly
resilient but showed considerable structural transformation: the institutionalization of
the regulatory state in Switzerland. This process is illustrated through the establishment
of independent regulatory agencies (IRAs) in four areas: banking and finance; telecom-
munications; electricity; and competition. The theoretical framework developed by
Streeck, Thelen and Mahoney is used to explore hypotheses about the modes of insti-
tutional change, with the methodology of diachronic within-case study. Results confirm
only partially the expectations, pointing to layering and displacement as the prevalent
modes of change. The concluding part discusses the type and the direction of change as
additional explanatory factors.
Points for practitioners
This article examines the institutional development of the regulatory state in
Switzerland through the establishment of independent regulatory agencies (IRAs).
Different modes of change are illustrated through the analysis of the processes leading
to agencification in four areas: banking and finance; telecommunication; electricity; and
competition. Results suggest that the dynamics of re-regulation follow a quite different
logic compared to the general trend towards liberalization. What is more, the empirical
analysis indicates that independent regulatory agencies are mostly created by importing
exogenous models in the case of the ‘positive’ reform of previously self-regulated sec-
tors, while they are established along existing institutional arrangements when reform-
ing former state-owned enterprises or publicly regulated sectors.
Keywords
agencies, autonomy, independence, institutional change, regulation, regulatory state,
Switzerland
Corresponding author:
Martino Maggetti, University of Zurich-Political Science, Affolternstrasse 56, Zurich 8050, Switzerland.
Email: maggetti@ipz.uzh.ch
Introduction
In recent decades the widespread establishment of independent regulatory agencies
(IRAs) is considered to be the main public governance innovation that has taken
place in advanced capitalist democracies (Christensen and Laegreid, 2006; Gilardi,
2008; Pollitt et al., 2004; Thatcher, 2002b). IRAs are public sector organizations
with regulatory competencies and their own budgets, defined as legal entities under
public law that are ‘structurally disaggregated’ from the ordinary civil service and
constitutionally separated from the electoral cycle (Verschuere et al., 2006). They
arguably represent the most autonomous type of organizations that possess and
exercise some grant of public authority. Historically, IRAs were first established in
the USA during the ‘Progressive Movement’ (1890s–1920s) in an effort to improve
the efficiency of decision-making through ‘depoliticization’ and the use of technical
expertise in the policy process. For a long time, they were considered a peculiar
feature of the American regulatory state, with few exceptions. Then, quite sud-
denly, the agency model was adopted worldwide starting in the late 1980s so as
to secure credible regulatory policies following the privatization, liberalization
and re-regulation of sectors as diverse as finance, public utilities, environmental
protection and health safety. Given their theoretical and empirical relevance,
IRAs have been quite extensively studied from the point of view of their cre-
ation, diffusion, formal and de facto independence, accountability, legitimacy,
mediatization, efficiency and performance (Carpenter, 2001; Christensen and
Laegreid, 2006; Coen and Thatcher, 2005; Gilardi, 2005, 2007, 2008; Jordana
and Levi-Faur, 2004, 2005; Levi-Faur, 2003, 2006a; Maggetti, 2009, 2012a;
Thatcher, 2002a, 2002b, 2005).
However, the establishment of IRAs has been rarely framed from the point of
view of macro-institutional analysis (Hollingsworth, 2000). In particular, the cross-
sectoral process of institutional change, leading to a new mode of regulation, has
not yet been studied in a systematic and comprehensive way. This dynamic view is
crucial in order to put the phenomenon of agencification in the broader context of
the long-term evolution of the modern state. In line with this argument, the main
goal of this article is to characterize the institutional development of the regulatory
state in a case that was expected to be particularly resilient to change and yet
showed considerable macro-institutional transformations in the 1990s and 2000s
– that is, the Swiss regulatory state. In this way, it is possible to test expectations
based on the typology of the modes of institutional change identified by Streeck,
Thelen and Mahoney (Mahoney and Thelen, 2009; Streeck and Thelen, 2005), with
the methodology of diachronic within-case study (Gerring, 2007). The article is
structured as follows: the next section presents the theoretical framework that
Streeck, Thelen and Mahoney developed and transposes it to the study of the
regulatory state. Then, this explanatory typology is operationalized to derive
expectations about the modes of institutional change in Switzerland. The empirical
section illustrates the process of agencification through the development of the
Maggetti 277
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