Governance and innovation policy failures in Europe

• Author: Stefan Schepers
• Date: 01 August 2013
• DOI: http://doi.org/10.1002/pa.1458
• Published date: 01 August 2013

■Commentary

Governance and innovation policy

failures in Europe

Stefan Schepers*

EPPA, Brussels, Belgium

It is axiomatic in business management that organization follows strategy. In public policy, it is not different:

governance organization and tools are dependent on the objectives that authorities want to achieve. The present

stagnation, if not decline, of the European Union provides an interesting warning not to ignore this. Copyright ©

2013 John Wiley & Sons, Ltd.

FROM INNOVATION TO STAGNATION

The history of governance makes abundantly clear

that government organization evolves with its func-

tions, which are, to a large extent, determined by its

economic conditions: feudal–agrarian societies with

its different institutions and rule making, and grow-

ing trade and early industrialization brought

centralization and extension to the role of govern-

ment, but in its turn, governanceinnovation spurned

economic growth (North and Thomas, 1973). The

process of public institution building and extension

of governance tools continued throughout the west-

ern industrialization age and spread to the rest of

the world duringcolonialism. State buildinghas been

different across the world and has led to a variety of

political orders, depending on economic, cultural,

religious, and natural conditions (Fukuyama, 2011).

However, technological and economic conditions

and cultural modernity lead to some convergence

with regard to key functions to be performed.

During the 20th, century inter-national public

organizations emerged because of the need brought

by an increase in interdependency resulting from

technological developments, and increased communi-

cations and trade ranging from commodities to

finished products. These inter-national public organi-

zations are all set up by the Member States, which

delegate to them specific tasks and provide them with

an organization and tools to implement these. Their

policy making power varies from issuing political

declarations to regulatory tools strictly controlled by

the Member States, which have to ratify them to give

them legal force.

However, in 1952, a new type of public organization

emerged with specific objectives and with an original

institutional setup and its own powers of rule making:

the European Coal and Steel Community, followed in

1957 by the European Economic Community. Both

were no longer inter-national, but quickly qualified as

supra-national, combining elements of international

and of federal state organization. (Wessels, 2008)

The objectives of the new supra-national

organization were more far-reaching than those of

traditional international organizations and its

institutions, far more innovative. The aim was to

develop a ‘Common Market’based on the free

circulation of the factors of production. To achieve

this, specific governance tools and proced ures were

provided by the founding Member States. These

were aimed at bala ncing the individual e conomic

interests of the Member States with their common

interests, together with compensation mechanisms

to facilitate adaptation.

Whereas the executive, the Commission, and the

directly elected European Parliament represent the

common European interests, as defined in the con-

stituent Treaties; the Council of Ministers, composed

of ministers of the Member States, depending on the

policy under consideration (agriculture, trade, etc.),

represents the interests and bargainingamong Mem-

ber States. Decisions in the Council of Ministers are

taken by qualified majority based on a system of

votes given to each member state. In the future, a

requirementwill be added that the qualified majority

must represent a bit over 60% of the European

Union’s (EU) population. Whereas the objectives of

the EU are defined in the constituent Treaties,

*Correspondence to: Stefan Schepe rs, Director, EPPA, Brussels,

Belgium. E-mail: Stefan.Schepers@eppa.com

Journal of Public Affairs

Volume 13 Number 3 pp 345–351 (2013)

Published online 12 March 2013 in Wiley Online Library

(www.wileyonlinelibrary.com) DOI: 10.1002/pa.1458

Copyright © 2013 John Wiley & Sons, Ltd.