The new European Union economic governance: what about accountability?
| Author | Frank Naert |
| Date | 01 December 2016 |
| Published date | 01 December 2016 |
| DOI | 10.1177/0020852315607954 |
| Subject Matter | Special issue: Accountability in the post-Lisbon European UnionSpecial Issue Articles |
International Review of
Administrative Sciences
2016, Vol. 82(4) 638–655
!The Author(s) 2016
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DOI: 10.1177/0020852315607954
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International
Review of
Administrative
Sciences
Article
The new European Union
economic governance: what about
accountability?
Frank Naert
Ghent University, Belgium
Abstract
The euro crisis marked the start of the so-called ‘new European Union economic
governance’. This new economic governance brings along different kinds of changes
in the status of decision-making actors. Some of these changes involve power shifts,
which can be categorised as either vertical or horizontal. Vertical power shifts transfer
powers between different levels of government, usually from the national level to the
European Union level. Horizontal power shifts transfer powers away from discretionary
decision-making by governments to independent institutions. The new economic gov-
ernance also implies a restriction in the discretionary decision-making power of gov-
ernments by the imposition of policy rules. In this article, the accountability problems
involved with these power shifts are analysed. It finds that, overall, the implementation
process of the new economic governance has harmed accountability.
Points for practitioners
The key implication of this article is that the new governance arrangements made by the
European Union to tackle the euro crisis are lacking in accountability and legitimacy.The
moves towards more rules replacing policy discretion and towards entrusting policies
to independent agencies rather than politically accountable governments are to the
detriment of political accountability. Policy efficiency comes at a high price in terms
of political acceptance as trust in the European Union is negatively influenced by the
new governance system. Practitioners should keep this in mind when designing govern-
ance systems.
Keywords
accountability, discretion, economic governance, rules
Corresponding author:
Frank Naert, Faculty of Economics and Business Administration, Ghent University, Henleykaai 84,
Ghent 9000, Belgium.
Email: Frank.Naert@UGent.be
Introduction
The euro crisis marked the start of the so-called ‘new European Union [EU] eco-
nomic governance’. Compared to pre-crisis economic governance, which was char-
acterised by the rather loose implementation of the Stability and Growth Pact
(SGP), the new post-crisis economic governance features much more stringent
rules and procedures, as introduced by the European Semester, the Fiscal
Compact, the Six-Pack and the Two-Pack (Dawson, 2015; Degryse, 2012;
Geeroms et al., 2014). The new economic governance brings along different
kinds of power changes, which can be categorised as vertical or horizontal
(Naert, 2014). Vertical power changes transfer powers between different levels of
policymaking, most often from the national level to the EU level. The theoretical
framework for these kinds of shifts is encompassed in the literature on the demo-
cratic deficit in the EU (see later). Horizontal power changes transfer powers away
from discretionary decision-making by governments to independent institutions, or
replace discretionary decision-making with decision-making based on policy rules.
These power shifts have to be framed in the literature on the EU regulatory state
(see later). Combinations of the first and second kinds of changes result in diagonal
power changes.
In all cases, there is a potential impact on the accountability features of the new
policy framework. Since accountability is an important issue in the EU (cf. Harlow,
2002), any change in the institutional infrastructure of the EU warrants close scru-
tiny from the viewpoint of its impact on accountability. The fiscal crisis is such an
occasion when EU governance has been renovated, and, as such, raises fundamen-
tal issues of democratic legitimacy and accountability (Dawson, 2015; De Witte
et al., 2013; Moravcsik, 2012; Nicolaı
¨dis, 2013; Poiares Maduro et al., 2012).
The rationale behind vertical power changes, however, differs from the rationale
behind horizontal changes. Whereas vertical changes can be rationalised according
to the prescripts of fiscal federalism theory (Musgrave, 1959), horizontal changes
are needed to solve credibility problems (Kydland and Prescott, 1977).
The point to be made in this article is that the direction of the power change
determines the way in which accountability is affected. If competences are trans-
ferred from the national to the supranational level, the national accountability
system should ideally be replaced by a supranational system. A move from discre-
tion to rules or independent agencies, on whatever level, raises questions about
other aspects of accountability, for example, about the forum that can hold to
account the independent actor. The objective of this article is to identify the dif-
ferent impacts on accountability of the vertical and horizontal power changes
resulting from the new EU economic governance.
The article is organised as follows. In the next section, we introduce the litera-
ture on the EU democratic deficit, the EU regulatory state and accountability. The
accountability framework developed by Bovens (2007), which will be used in the
empirical part of the article, is based on this literature. The Bovens framework is
adapted to include accountability aspects of replacing discretion with policy rules.
Naert 639
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