Reforming National Regulatory Institutions: the EU and Cross-National Variety in European Network Industries

Abstract

Abstract Regulatory institutions offer a powerful means to coordinate firms with other actors, notably state actors, and hence create institutional advantages. Until the mid-1980s, changes in institutions for the regulation of network industries such as telecommunications, energy and transport followed the predictions of the Varieties of capitalism model. Thus, Britain privatised and liberalised, France followed a grands projets strategy, and Germany one of close links between public suppliers and private equipment manufacturers and consensus among social partners. However, from the mid-1980s onwards, the EU has developed an increasingly detailed regulatory framework that is based on a ‘liberal market economy’ model of regulatory institutions and runs counter to other coordinated or state-led models. It has played an important part in reforms in France and Germany that reshaped formal regulatory institutions in ways similar to those in Britain, notably liberalisation, privatization, and the creation of independent regulatory agencies. Thus, some regulatory institutions have seen considerable change and convergence across countries that represent different varieties of capitalism. At the same time, informal regulatory institutions continued to differ greatly across the three nations — both informal norms and linkages between governments and suppliers. Moreover, strategies for ‘national champion’ firms and uses of European integration in pushing regulatory reform remained distinct. Thus, overall the chapter argues that in the face of European integration, analysis of varieties of capitalism needs to differentiate between formal and informal institutions, and that convergence in the former is compatible with continuing contrasts in national strategies and the process of reform.

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