Agencies between two worlds: information asymmetry in multilevel policy-making

Abstract:

European co-ordination is pivotal for an effective regulation of the common market, and European administrative networks are currently mushrooming. Recent quantitative empirical research reveals that national agencies are gaining policy autonomy from their parent ministries when they become involved in European networks. However, the quantitative approach has only partially elucidated the causal mechanisms of this effect. To close this gap, this article examines two fields with dense European administrative networks: financial market regulation and energy regulation. It demonstrates that involvement in European networks exacerbates information asymmetries (particularly those regarding so-called negotiation knowledge) between agencies and their parent ministries. These information asymmetries aggravate ministries’ control problems and can even be strategically exploited by agencies, which has far-reaching consequences for the process of multilevel co-ordination.