Regulation after Agencification: Hierarchy and Uncertainty in the Case of Energy

Abstract

In the last two decades, there has been a progressive extension of delegation to European regulatory agencies, which has led to important claims about the agencification of EU executive governance. Yet, there is still little knowledge about how and under what conditions, in practice, agencies contribute to EU regulatory policymaking. The paper analyses regulation after agencification by building on an unconventional, experimentalist interpretation of EU governance and its major critique, namely shadow of hierarchy. It focuses especially on the example of the internal energy market and its regulation. It finds that, when key actors such as the European Commission have only general preferences about how to achieve policy goals, and thus find themselves in conditions of greater uncertainty, they engage in experimentalist policymaking by granting scope for local discretion and employing agencies to compare different approaches and facilitate the development of agreements on this basis and with higher stakeholder participation. However, when they have more specific policy preferences and hence find themselves in conditions of lower uncertainty, even though hierarchy has not changed, they opt for hierarchical policymaking, whereby reforms are codified less inclusively to impose uniform solutions on all member states and companies, and agencies are employed to monitor compliance with them. On this basis, the paper argues that factors beyond hierarchy – namely uncertainty – must be considered in order to offer a fuller account of variations in how agencies contribute to regulation after agencification. These findings stand in contrast with shadow of hierarchy theory and, in part, with experimentalist theory, as both emphasise the importance of hierarchy. By finding patterns of policymaking not based on shadow of hierarchy or polyarchy but instead consistent with strategic uncertainty, the paper suggests that uncertainty is an individually sufficient condition for experimentalist policymaking.