Working Paper No. 74 "From EU Governance of Crisis to Crisis of EU Governance: Regulatory Failure, Redistributive Content, and Euroskeptic Publics"

Tanja A. Börzel

This paper takes issue with the widely held view that Europe has failed to govern the multiple crises it has been facing because of too little integration. Rather than a lack of authority, a growing “commitment-compliance gap” has exacerbated the regulatory deficits of EU governance in core areas of the European integration project. The failure of the Member States to put into practice the policies they agreed upon at the EU level has its cause in Euro-nationalists dominating the politicization of EU policies and institutions. They have been empowered by the way in which the Member States have sought to solve the Euro crisis. The growing contestation of and opposition to the EU and its policies per se is not the problem. Nor is it the return of nationalism in Europe or the lack of a European public sphere. Instead of an outright rejection of European integration, we see the mobilization of illiberal, nationalist ideas of Europe, which are exclusionary, xenophobic, and anti-Islam. This paper argues that Euro-nationalism undermines not only the legitimacy but also the effectiveness of EU governance. It has been fueled by the mix of Member State negotiation and competition in the shadow of supranational hierarchy. This has worked for the EU as a regulatory state but is not suitable for dealing with the redistributive issues that have come to dominate important areas of European integration. In fact, simply extending the EU’s governance mix from regulatory to redistributive policies is likely to further undermine its effectiveness and legitimacy.

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Working Paper No. 75 "Safety for Whom? The Scattered Global Financial Safety Net and the Role of Regional Financial Arrangements"

Laurissa Mühlich and Barbara Fritz

The global financial safety net provides backstop during times of financial crises. Its elements underwent fundamental changes since the global financial crisis. The International Monetary Fund (IMF) introduced new facilities on the global level, new regional financial arrangements (RFAs) were created, and bilateral swap agreements emerged as a new element. In this paper, we ask how these changes influence the use of the different safety net options, and what role RFAs have in the safety net today. We created a database with all the cases in which a RFA member drew on one of the elements of the global safety net. This allows us to analyze which other options the country had at hand, and to examine their use along the institutional design in terms of timeliness, volume, and policy conditionality. We find today’s global financial safety net to be not a global, but a geographically and structurally scattered net. RFAs make the safety net safer only for small member countries. Just few countries can count on a bilateral swap line, their selection being subject to the discretion of the swap partner. Thus, a large number of countries fall through important knots of the safety net and have the IMF as their only option.

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Working Paper No. 76 "Regional Powers and Leadership in Regional Institutions: Nigeria in ECOWAS and South Africa in SADC"

Merran Hulse

Regional powers are not always benevolent leaders when it comes to the building of regional institutions. While powerful states – particularly the “new” rising powers – may have a vested interest in regionalism as a means of projecting influence, regional powers may behave as coercive or benevolent leaders, or alternatively display an absence of leadership altogether. The drivers of varying regional power behavior can be attributed to their competing concerns regarding (economic) power, functional efficiency, international legitimacy, and neopatrimonial networks. This paper explores the varying behavior of Nigeria and South Africa in relation to the institutionalization of free trade areas and regional courts within their respective regions. Nigeria has displayed little leadership in ECOWAS trade integration due to domestic opposition; however, a newly-democratic Nigeria’s search for international legitimacy drove the establishment of the ECOWAS Court of Justice. Likewise, South Africa’s search for legitimacy drove its support for the SADC Tribunal, but the competing demands of different audiences led it to abandon this support. South Africa has also displayed leadership in relation to the SADC Free Trade Area; however, its neighbors perceive it as a self-interested, almost coercive actor. The findings suggest that the motivations for regional powers’ behavior vary across time and policy sectors, and that inconsistent behavior is driven by a change in the priority granted to different drivers.

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Working Paper No. 77 "Development Banks and Regional Powers: An Analytical Framework"

Stefano Palestini

Why do regional powers such as Brazil, South Africa, or Russia undertake different collective strategies to supply public goods in their regions of influence? When do those states prefer to delegate competences to existent multilateral financial institutions, such as regional development banks (RDBs), and when do they prefer to make use of their own national financial instruments? Why do those states create new RDBs that challenge the existing ones? The article builds and tests a set of hypotheses based on the interplay between capabilities and legitimacy to help answer these questions using contemporary South America as a case study. Through a process tracing analysis carried out for the period 2000–15, the article explains the different strategies undertaken by two states, Brazil and Venezuela, to supply infrastructure in the region, ranging from the use of the Brazilian National Development Bank to the creation of a new Bank of the South. It is suggested that the low capabilities and legitimacy expectations of both states explain the rising importance of external actors in the supply of regional public goods that we are currently witnessing in South America.

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