A way to improve European democracy and governance efficacy

By Andrew Kakabadse, Klaus Gretschmann, Stefan Schepers

There is today more need than ever for effective collaboration among the Member States within the EU political and legal framework. But the operating systems of the latter are falling behind the requirements of a connected economy (and society) driven by rapid developments in digital technology. These force a departure from path dependent policy thinking and from traditional methods of operations. European public sector innovation should be therefore a priority and go far beyond the current policy of better regulation. In fact, it is a pre-condition.

Multi-layered and experimental governance systems, such as the EU, are even more challenged than national ones when seeking to innovate their public sector. National economic and social interests require innovative multi-layered collaborative management methods, to permit regular adaptation of framework conditions to the rapidly changing technological and social conditions. However, strategy agility in the public sector sits uneasily with the dominant legalistic paradigms inherited from the industrial age, even more so in a supra-national system based on a partial transfer and collective management of sovereign powers.

Everyone recognises that complexity of issues is continuously increasing. Not everyone draws the practical consequences that, in order to deal with complexity, a cultural change towards open innovation methods, based on regular dialogue processes, is needed, in order to collaboratively create agile policy and regulatory architectures (instead of the static legalistic ones of the industrial age). Without these, the transformation towards the twin objectives of a competitive and sustainable economy will be impossible. Complexity cannot can only be managed collaboratively. Therefore, several reforms should be considered.

In the institutions and in some governments of the European Union one often hears ‘that the EU has again the wind in the sails’. But as Seneca said ‘ignoranti quem portum petat nullus suus ventus est’ (the wind in the sails means nothing if one does not know to which port one is sailing).

The EU has a double systemic problem, one of efficiency, and one of democracy. Their combination is always a challenge, and even more so in a supra-national structure of states, all legally sovereign according to international public law, but which have transferred some powers to a new, collective governance structure. By doing so, they have limited their citizens democratic rights; no matter how they are exercised, if they are shared, the peoples are no longer individually sovereign.

The current EU is based on governance concepts conceived after the 1930s depression and influenced by the immediate post-war, historic, socio-cultural and political context of only six countries in Western Europe, which aimed to manage collectively a limited number of mutual economic interests. To serve these, they designed a so-called ‘Community Method’ to develop a common and a single market and to set common standards for industry and services. It is now under pressure as a consequence of three developments.

First, the enlargement of the EU to countries from the so-called ‘Mitteleuropa’ and from the former Byzantine-orthodox Europe, each with a different contextual background, requires to move beyond the ‘Europe of Charlemagne’ towards a more inclusive narrative in order to remain attractive to all citizens and to respond to current, more diverse geopolitical, economic, social and cultural conditions.

Secondly, the new and greater diversity as well as social and cultural changes resulting from widespread education and from information technologies require deep thinking about the difference and the linkage between technocratic governance, required to create the infrastructures for economic growth and welfare distribution, and democratic governance, required to respond to different peoples’ aspirations and perceptions.

Thirdly, governance methods have always been function of economic conditions. The current deep economic shifts towards a digital economy demand a re-thinking of governance methods developed for the bygone industrial age. In particular, there is a need to maintain appropriate state income to finance its education and welfare state systems, on which social stability, national identities and economic competitiveness are based, to modernise infrastructures and to ensure security.

The EU is therefore now in need of more diversity and more responsiveness vis-à-vis the multiple and complex challenges, and opportunities, and the diversified preferences of citizens and their governments. There is a need for better alignment processes between individual and national views, perceptions and interests, which are and will remain more diverse than ever. Evidently, the current centralising model of EU integration is unsuitable for building an additional European civic identity among its peoples, as was shown clearly in recent years when the effect of its post-war narrative has withered away. It antagonises ever more democratic legitimacy and accountability.

The most recent reforms, by the Lisbon Treaty, were path dependent and did insufficiently include the new economic and societal realities. The multiple policy making problems of the EU and its declining legitimacy result from this inadaptation of its governance system to new realities. It will require both operational and deep democratic reforms to solve the basic fault lines in the current system and to avoid its breakdown over time. How to better combine liberal democracy and technocratic efficacy in the EU ?

In order to manage the spill-over effects of market integration, the economic and social consequences of digitalisation, new issues not envisaged in original Treaties (such as climate change, migration and refugees, or cyber security) and the uncertainties of new geo-political conditions, restoration of checks and balances between the Member States and the EU institutions is required in order to improve its democratic accountability and its managerial efficacy. In order to deal with a different civic culture than the one of the post-war period, one will have to re-invent democracy, go beyond the current formalistic procedures and include the opportunities of new technologies for consultation and participation. People in future need to be convinced, not told from high on.

On the substance of democratic governance in Europe, there is greater alignment of interests needed through streamlining them and through better governance. How to realise greater engagement with an electorate already disenfranchised because of the shift of power from national parties and parliaments to the executive ? And further then from their national executives to a European one, basically supported, not controlled, by a European Parliament whose main target seems to be even more centralisation and top-down decision making from Brussels ? One should realise that democratic accountability and legitimacy are not improved in a supra-national system by trying to copy parliamentary systems dating from and appropriate for the industrial age. The new digital age requires more radical rethinking.

A new trans-European consensus to work together on common problems cannot be achieved only through greater connectivity amongst elites and some fiddling with current structures and procedures. We need to start looking again through the lens of greater engagement with the citizen. This is what the great inventors of modern democracy in Europe and America did in the 18-19th century. Realising engagement with the electorate across Europe, identifying points of tension and designing ways to align interests will help much more against the growing negativity across Europe than institutional re-design and fake consultations.

On the formal, institutional side of democratic governance, the original supra-national governance methods are unsuitable to deal with new common engagements, with increased diversity, rapid change, or to fill the democratic gap between national aspirations and European technocracy. The EU needs more strategic agility and bottom-up democratic legitimacy : a new balance is required between the popular will and technocratic implementation. But also new ways to identify and align views and interests of citizens, because too many single interests claim to speak for the popular will, unproven. And respect for minorities remains a key characteristic of true democracy; this is even a matter of efficacy, because too often minority views appear to be right, much later (see the list of modern policy disasters).

New information and communication technologies can help to regularly organise preferenda on issues of strategic importance for citizens : allowing citizens to express preferences for objectives to be achieved, based on alternative, evidence based scenarios designed by a neutral body. They would not have binding effects, but they could help those sensitive about and responsible for the Common Good to follow-up with public alignment processes, explaining options and potential consequences of outcomes. Over time, preferenda would surely have a civic educational effect.

They are not the only improvement to be made, but others depend on whether the parliamentary system as such can be made again a more responsive instrument of citizens’ preferences, more respective of increasing diversities in modern societies, and more accountable through better control of the inevitable technocracy of governance systems, whether national or European.

The ‘Community method’ can then be maintained for market integration policy. Attempts of irrational return of powers to states incapable to exercise them individually can be resisted better if democratic governance is improved. But this method should be more clearly limited to market integration in agriculture, industry and services. The acquis of the Internal Market and the EMU must be preserved. For all shared or own competences and for non-market policies, a fundamentally innovative governance system should be elaborated in order to give the EU an additional well organised system of decision making through effective inter-governmental collaboration, inspired by the existing but unloved Open Method of Coordination (OMC).

An innovated and better structured OMC should be more democratic by leaving policy choices at national level and restricting the EU role to framework legislation. National governments should remain responsible for specific policy solutions, but they should do so by focussing on jointly defined problems and objectives, and they should consider their own policy choices within the framework definition of these common European objectives. Governments should present their plans for achieving common goals and expose their performance to benchmarking and peer review, but coordination and cooperation should be voluntary and without formal sanctions. National governments should remain responsible for specific policy solutions, but they should do so by focussing on jointly defined problems and policy objectives, and they should consider their own policy choices within the framework definition of common European concerns and objectives. The qualified majority system should be used in the OMC as in the Community Method. European and national parliaments should have complementary roles. The use (and abuse) of the implied powers theory by the EU should be controlled through a joint committee of the national constitutional courts.

In general, all EU policy and regulation innovation needs to be less path dependent and more inventive in order to capture the new complex economic, scientific and technological realities and to be effective for competitiveness and sustainability and to be more democratically responsive by being more flexible and varied in achieving common goals. Real and upfront consultation processes about problem definition, before proposal elaboration will facilitate alignment of views and interests and more creative solution finding.

These ideas are intended to open a discussion which avoids the trap of more centralising powers at supra-national level, and reduced democracy, or the reverse problem of less common governance efficacy. The next few years should be used by seeking a new trans-European consensus, bottom-up and without pre-conceived framework of thinking. The only real challenge today is to improve Europe’s common governance capabilities and to maintain its liberal and social democratic credentials when all around them seem to ditch these.

22.1.2018

Andrew Kakabadse, Klaus Gretschmann, Stefan Schepers