Majone explores the development of regulation in Europe, contrasting European states’ approaches to that of the US, where independent “statutory” regulators were created much earlier. European policy-makers’ primary means to address market failure had been through nationalisation and direct state control of industries and services. With this approach seen to have failed, and under pressure on public budgets, governments launched privatisation programmes and major “deregulation” initiatives. However, Majone argues that rather than deregulating, this process actually saw the substitution of one form of regulation with another.
He describes the development of the European Communities as both a consequence and a cause of the emergence of new forms of regulation. On the one hand, the European Commission had fewer budgetary constraints on proposing regulatory measures than in developing redistributive programmes. Moreover, one or other Member State often demanded the Commission put forward regulatory measures in a given field. On the other hand, in delegating regulatory powers to the Commission, Member States not only distanced themselves from unpopular actions, but the Commission would be seen by market actors as a more credible regulator, being more distant from vested interests in each country than governments.
Building on contributors’ case studies of European regulation in practice, Majone highlights the unstable relationship between national and European levels of regulation. He concludes with discussion on the problem of ensuring legitimacy for regulators with little democratic accountability, in particular in situations where policy-makers fail to resist the temptation to exercise hidden influence on regulators.