|A Theoretical and Empirical Study of Corporate Lobbying in the European Parliament(*)|
|European Integration online Papers (EIoP) Vol. 7
(2003) N° 11;
|Date of Publication in : 2.12.2003|
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In the early days of European integration, the question about the influence of business interests at the European level was not really pressing. The continuous transfer of political decision-making power and allocations from the national to the European level driven by major Treaty revisions has, however, transformed the European institutions into a highly relevant policy arena for business interests. Given the relatively small size of its budget, the EU has mainly developed into a regulatory authority (Majone, 1994; Van Schendelen, 1994). In many policy areas, the legislation produced at the European level has a profound impact on the economic activities of business interests. EU legislative lobbying has thereby become one of the crucial activities by which business interests guarantee a friendly regulatory environment for corporate activities within the European Union.(1) Even though the question of the actual influence of business interests through legislative lobbying has become increasingly important, it is not the direct focus of this article. Since measuring influence is a rather problematic enterprise in political science, the focus in this study is not the influence of business interests, but the access these interests enjoy to the EU institutions involved in the EU legislative process. It needs to be emphasized that access does not necessarily mean influence. However, gaining access to the EU institutions is a necessary condition for exercising influence in the EU legislative process.
The aim of this paper is to test a theoretical framework, a logic of access, which attempts to explain the access of business interests to the EU institutions (Bouwen, 2002). Although many empirical studies have been undertaken in the field of European interest politics during the last decade (Bennett, 1997, Greenwood et al. 1992, Mazey and Richardson, 1993; Van Schendelen 1994), theoretical work remains rather scarce.(2) The logic of access attempts to explain the different degrees of access of business interests (firms, associations or consultants) to specific EU institutions. The framework tries to move beyond the traditional focus in the literature, which characterizes European interest intermediation in terms of either the pluralist or neo-corporatist interest politics paradigm (Streeck and Schmitter, 1991; Gorges, 1996; Falkner, 1998). Important characteristics of both paradigms are incorporated in this approach. The pluralist emphasis on the diversity of groups and the importance of information is combined with the corporatist focus on resource exchange.
Furthermore, the logic of access simultaneously studies different organizational forms of business interest representation. In this framework not only is traditional collective action analyzed; so are individual company action and third party representation by political consultants or lawyers. In this respect, this work is fundamentally different from the traditional literature on European interest intermediation, which tends to focus either on collective action or on individual company action in isolation from other organizational forms (Mazey and Richardson, 1993; Coen, 1997; Greenwood and Aspinwall, 1998).
The theoretical framework is applied to the European Parliament. Past studies have mainly focused on lobbying in the European Commission. In the literature on EU business lobbying, the Commission has traditionally been identified as the most important lobbying target (Mazey and Richardson, 1999:111). So far, surprisingly few studies have investigated lobbying in the European Parliament (Kohler-Koch, 1998:126; Wessels, 1999:105). The main reason is that, for a long time, it was conventional wisdom to argue that the European Parliament was an inherently weak institution (Mazey and Richardson, 1999:113). While it was still possible at the time of the cooperation procedure to argue that the Parliament was relatively weak, this has changed. Since the Treaty of Maastricht the co-decision procedure has provided the supranational assembly with real veto power in the EU legislative process. This study incorporates two important sorts of empirical investigations into the European Parliament. First, in order to understand the specific institutional context of the European Parliament, the author has conducted 14 exploratory interviews with officials and politicians in the Parliament. Second, a further empirical study has been designed to systematically test the theoretical framework in the Parliament. It is based on 27 additional semi-structured interviews with politicians in the supranational assembly.
The EU financial services sector was chosen in order to empirically test the generated hypotheses. The numerous legislative measures proposed by the European Commission since 1998 have had important distributive effects on the financial services providers and, through lobbying and public consultation, have consequently engendered intense interaction between these private interests and the EU public authorities. The increased lobbying activity in the EU financial services sector over the last few years makes this policy area particularly interesting for the study of the logic of business interest representation in the European Union. Over the last decade, Europe's political leaders have focused their attention on the construction of the Economic and Monetary Union, but they have failed to develop the regulatory infrastructure required for the integration of the Member States' financial services markets (Zavvos, 1994:27-32; Dyson and Featherstone, 1999). Since the success of the single currency would not be guaranteed without well-functioning financial markets, in 1998 the European Commission devised the Financial Services Action Plan in order to inject new momentum into the task of building a single financial market (Mogg, 1999:11).(3)
This paper is organized as follows. In the next section (section II), I propose the theoretical framework. Before presenting the research design and methods used to measure access to the European Parliament in section IV, the specific institutional setting that is most important for legislative lobbying within the Parliament, and that therefore will be used in order to measure access, is identified in section III. Section V reports the empirical evidence. The article concludes with an overall assessment of the theoretical framework needed to understand business lobbying in the European Parliament; it also views the results in the light of the existing literature on party cohesion and coalition formation in the European Parliament.
It would be a mistake to regard business lobbying in the European Parliament as a unidirectional activity of private actors vis-à-vis this EU institution. The European Parliament is also eager to interact because it needs close contacts with the private sector in order to fulfill its institutional role. The key to understanding the lobby activities of business interests in the European Parliament is therefore to conceive of the relation between these private actors and the supranational assembly as an exchange relation between interdependent organizations. The exchange models developed by sociologists in the 1960s for the study of inter-organizational relationships serve as an interesting starting point for the analysis of the interaction between business interests and public actors at the European level (Levine and White, 1961:587). Some authors have already used exchange theories either implicitly (Greenwood et al., 1992) or explicitly (Buholzer, 1998; Pappi and Henning, 1999) to study European interest intermediation.(4) According to these theories, the interaction between private and public organizations can be conceptualized as a series of inter-organizational exchanges. These models are closely related to the resource dependence perspective of Pfeffer and Salancik (1978). Whereas both theoretical approaches emphasize that it is important for organizations to exchange resources, resource dependency focuses more closely on the ensuing interdependence between the interacting organizations (Pfeffer, 1997:63).
In order to gain insight into the process of resource exchange, it is important to study the resources that are exchanged between the two groups. Access to the Parliament is the main resource required by the private actors. In return for access to the European Parliaments decision-making process, the assembly demands certain goods that are crucial for its own functioning. These goods are called access goods (Bouwen, 2002:369). The three access goods that can be identified have a common characteristic: information. In recent public choice approaches to lobbying in the European Union (Broscheid and Coen 2003; Crombez 2002) or to interest group politics in general (Lohmann, 1995; Austin-Smith, 1993; Potters and Van Winden, 1990), information also increasingly plays a central role in the analysis.(5) Starting with the assumption that interest groups are better informed on issues that affect them than policy-makers, this literature argues that interest groups play a crucial role in the policy process by transmitting information to the relevant policy-makers. Here, the three access goods concern different kinds of information that is crucial in the EU legislative process and can be specified as follows:
Whereas the importance of expert knowledge has been widely acknowledged in the literature (Pappi and Henning, 1999; Truman, 1951), the two encompassing access goods have not been previously identified. It is therefore important to define the meaning of the concept "encompassing interest". An interest is more encompassing when many diverse interested parties are involved in the formulation of the interest. An aggregation of individual interests or interested parties then takes place. A national trade association can, for example, be said to represent an encompassing interest because it is specialized in bundling the needs and interests of its member companies. When the aggregation takes at the national sectoral level, the domestic encompassing interest is involved. For the European encompassing interest, interests have to be aggregated at the European sectoral level. The three access goods are central to understanding the relation between private actors and the European Parliament. It is possible to model the resource exchange as a supply-and-demand scheme for access goods. In order to build the theoretical scheme, the author conducted 63 exploratory interviews with both business interests (21) and EU officials and politicians (42) (Bouwen, 2002:367).(6) Whereas the private actors are responsible for the supply of access goods in this model, the Parliament determines the demand. Private actors can only gain access to the Parliament if the access good they provide is also demanded by the European Parliament.
Not all private interests have the same capacity to provide access goods. As the systematic analysis of the main organizational forms of business interest representation in the following paragraph shows, organizational form is the crucial variable for determining the kind of access goods that can be provided. Three organizational forms of business interest representation can be distinguished in the EU: individual company action, collective action (i.e. associations) and third party representation (i.e. consultants).(7)
The resource asymmetry between large and small firms explains the superior capacity of large firms to provide access goods. In contrast to associations or consultants, large firms are directly active in the market and are therefore particularly good at providing expert knowledge. The strategies of large firms can be national or European. When a firms domestic market share is considerable, it can to a certain extent provide information about the domestic encompassing interest. However, the degree to which this interest is encompassing remains limited because only a single domestic firm is concerned. Large firms with a European strategy can provide information about the European Interest. However, most of these large European firms cannot claim to provide information about the European encompassing interest because they only have a relatively small market share in the single market.
Associations are not as good as individual firms at providing expert knowledge because they have fewer resources, and they have to deal with a wider range of issues. The view that trade association officials are "industrial civil servants" who lack the expertise needed to inform policy formulation has become something of an orthodoxy throughout the EU institutions (Greenwood and Webster, 2000:5). Because of their multi-layered organizational structure, associations are too distant from the market reality. European associations have specialized in building consensus positions by channeling the different opinions of their member associations. They aggregate the interests of their member associations, which, for their part, are already the result of a bundling of the needs and interests of these national associations' member companies. This extensive consultation mechanism allows the European associations to present an encompassing European perspective of their sector and thereby to provide good quality information about the European encompassing interest. Similar reasoning can be applied to national associations. They represent the national sectoral interest and can therefore provide high-quality information about the domestic encompassing interest. Like other associations, national associations tend to be not very good at providing expert knowledge.
In contrast with individual companies and associations, consultants have a very limited capacity for providing access goods. Because consultants do not represent their own interests, they cannot provide the two encompassing access goods. Moreover, they can only provide expert knowledge when they are specialized in a particular policy area. In Brussels, specialized consultants are the exception, however. An overview of the supply of access goods from the different organizational forms of business interest representation is presented in Table 1 below.
Since it is the objective of this paper to study EU legislative lobbying, the demand for access goods is derived from the specific role of the European Parliament in the legislative process. The formal powers of the Parliament in the EU legislative process and the timing of its intervention in the process largely determine the institution's demand for resources, i.e. access goods. The extent to which the European Parliament is interested in the three access goods varies. The critical access good is the resource on which the supranational assembly is most dependent for the fulfillment of its formal legislative role (Jacobs, 1974). In the next paragraphs, I will attempt to identify the critical access good and to establish the reasons for the Parliament's demand for the three access goods.
As a forum for discussions of political importance during the legislative process, the European Parliament has both supranational and intergovernmental characteristics. Although transnational political groups have steadily been established in the Parliament, nationality remains a relevant cleavage within the assembly (Kreppel and Tsebelis, 1999).(8) The European Parliament's role in the Community's legislative procedure has increased from having, initially, no role whatsoever to play, to having a consultative role and, ultimately, to having powers that are more than consultative. In many important areas these powers have reached the level of co-decision with the Council of Ministers. When such matters arise, it is the Parliament's task to make amendments to the proposed legislation and to take decisions.
In view of the Parliament's legislative role, its demand for expert knowledge is rather limited. At this stage of the legislative process, the Commission has already drafted a detailed and often technical proposal. Although some basic expert knowledge is indispensable, the amount of technical market expertise needed to amend and take decisions is rather low in the European Parliament. The Parliament particularly needs information that allows it to assess the legislative proposals made by the European Commission. As a directly elected supranational assembly, it is the Parliament's task to evaluate the legislative proposals from a European perspective (Kohler-Koch, 1997:12). Specifically, the Parliament requires information about the EEI for this assessment. This access good constitutes the institution's critical resource because it provides encompassing private-sector information about the needs and interests in the EU internal market. An additional reason that the MEPs have an interest in this access good are the decision-making rules within the supranational assembly. Given the majoritarian decision-making rules in the European Parliament, MEPs are encouraged to think supranationally. In order to obtain a majority in Parliament, it is indispensable that the positions of MEPs from different Member States be reconciled. As a rule, agreement between different national positions is forged within the transnational political groups in the Parliament. Because the access good concerns information from a European perspective, the good is useful for the MEPs; specifically, it facilitates transnational coalition building within the supranational assembly.
In order to understand the Parliament's role in the legislative process, also the constituency orientation of the MEPs has to be taken into account. It is important to point out that the EU Member States have different national rules for the organization of the European elections. These differences in electoral systems have an impact on the legislator-voter relationship (Bowler and Farell, 1993:52).(9) All MEPs of the supranational assembly are nevertheless elected at the national level, and they therefore retain important links with their electorate back home. In order to increase their chances for re-election, MEPs need information about their national electorate (Hansen, 1991). This is why MEPs want information about the DEI. This access good provides them with information about the needs and preferences of their voters. In analogy with the European Parliament's demand for access goods, the demand for access of the European Commission and the Council of Ministers can also be derived (Bouwen, 2002:379). Table 2 below summarizes the demand for access goods of the European Parliament.
In order to explain the access of business interests to the European Parliament, both the supply and the demand for access goods have to be taken into account. Whereas private actors need the capacity to supply access goods, the latter must be demanded simultaneously by the European Parliament. The analysis of the supply side shows that most private interests can provide each of the three access goods to a varying degree. On the demand side, the Parliament is to a different degree interested in the three access goods. It has become clear that the supranational assembly has a preference for information about the EEI, i.e. the critical access good. Because this access good is the resource upon which the European Parliament is most dependent for the fulfillment of its formal legislative role, the assembly gives the highest degree of access to business interests that can provide this access good (Pfeffer, 1982:193). It follows that European associations are expected to enjoy the highest degree of access to the European Parliament because they are the champions in the provision of information about the EEI. Even though information about the DEI is not a critical access good for the Parliament, the supranational assembly still has a substantial interest in it. Consequently, it is still expected that national associations have an important degree of access to the assembly, albeit lower than the degree of access of European associations. Furthermore, it is hypothesized on the basis of the Parliaments limited interest in expert knowledge that individual companies have a low degree of access to the European Parliament. And finally, the very limited capacity of consultants to provide any access good is the basis for the prediction that consultants enjoy the lowest degree of access to the European Parliament. Using the same logic of access also enables us to generate hypotheses about the access of different organizational forms of business interest representation to the European Commission and the Council of Ministers (Bouwen, 2002:382). It can be concluded that the logic of access allows concrete predictions to be made about the access pattern of business interests to the EU institutions. Table 3 summarizes the access hypotheses of business interests to the European Parliament.
Some parts of the European Parliament are more relevant than others when it comes to legislative lobbying. Before empirically investigating legislative lobbying in the European Parliament, it is therefore necessary to identify the most important locus for legislative lobbying in the supranational assembly. With this aim, on the basis of both the existing literature and 14 exploratory interviews, a number of institutional characteristics of the Parliament are studied in the following paragraphs. That should allow us to identify the public actors that are judged to be most relevant for legislative lobbying in the European Parliament.
Since the aim of this article is to investigate legislative lobbying of business interests in the European Parliament, it seems sensible to focus on the study of interest politics in the plenary session of the Parliament. The plenary is the main decision-making body of the supranational assembly, and it has the final say on legislation. Moreover, only the Parliament and its president are recognized in the Treaties. However, in the following paragraphs a number of elements are investigated that show why it is better to focus on the study of the Parliament's specialized committees (Bowler and Farrell, 1995). Despite the plenary's formal pre-eminence, most of the Parliament's legislative work takes place in its specialized committees (Neuhold, 2001:3). All legislative proposals and other legislative documents must be considered in the committees and the bulk of the legislative process under all the legislative procedures takes place in the committees sessions.(10) Because of the specialized committees' dominant role in the legislative process, they are the most important targets for lobbying in the European Parliament.
Business interests target the committee meetings for two other reasons. Whereas private interests do not have access to the hemicycle during the plenary sessions in Strasbourg or in Brussels, they normally have access to the specialized committees. It follows that business interests are often present in the committee meetings. This is the first reason why business interests mainly focus on the committee meetings. The Parliament's rules of procedures state that committees shall normally meet in public. They may, however, decide to divide the agenda for a particular meeting into items open to the public and items closed to the public (Rule of Procedure 171 (3)).
The second reason private interests target the legislative activities in the committees rather than in the plenary session is the different scope for tabling amendments in the two arenas. It is common wisdom that one of the most important ways for business interests to influence the legislative process is to convince MEPs to amend the legislative text under review. Whereas in committee meetings individual MEPs may table amendments for consideration, in the plenary session a restrictive threshold has been established in the Rules of Procedure. In the plenary session only the committee responsible, a political group or a group of at least thirty-two members may table amendments (Rule of Procedure 139 (1)). This condition is a rather restrictive requirement and it largely limits the possibilities of MEPs to amend legislation in the plenary session.
Because of this articles focus on the European financial services sector, one specific committee is analyzed in this study: the Committee on Economic and Monetary Affairs (ECON). Annex VI of the Rules of Procedure spells out that the Committee on Economic and Monetary Affairs is responsible for matters relating to financial services (Article 51 (2) of the EC Treaty) and aspects related to the prudential supervision and monitoring of such services.(11) An administrator of the ECON secretariat noted that two other committees often play a role in the area of financial services: the Committee on Legal Affairs and the Internal Market and the Committee on the Environment, Public Health and Consumer Policy. Whereas these two committees are allowed to give an opinion, ECON is the "leading committee". These opinion-giving committees may table amendments but the leading committee is not obligated to take the other committees amendments on board. Only the leading committee is allowed to table amendments to a legislative report in the plenary session.(12)
The committees normally have between four and six administrators, and they are presided over by the head of division. These administrators belong to the large group of bureaucrats of Directorate General II Committees and Delegations of the Secretariat of the European Parliament; their main task is to service the committee system. The Committee on Economic and Monetary Affairs has six administrators and a head of division. There is also a committee assistant to see to the logistics of the meetings, and there are a number of secretaries. In May 2000 exploratory interviews were conducted with three of the six ECON-administrators.
Because of the relatively rapid turnover of MEPs, the committee staff often have an important role in briefing members on the past activities and the positions adopted in the committee. The administrators engage in background research for the rapporteurs, and they are regularly involved in the actual drafting of the reports. An administrator of the ECON secretariat told me that some rapporteurs indeed rely heavily on the administrators. He explained that some rapporteurs ask the bureaucrats to write the report on the basis of their guidelines. When that happens, the bureaucrats can become an interesting target for lobbyists. The staff regulations try to guarantee the officials' independence. They specify that "an official shall carry out his duties and conduct himself solely with the interest of the Communities in mind" and "shall neither seek nor take instructions from any government authority, organization or person outside his institution".
Although normally the MEPs maintain the contacts with private interests, another administrator of the ECON secretariat observed that private interests sometimes approach the bureaucrats directly. In any case, direct contacts between MEPs and lobbyists remain much more frequent. It is therefore legitimate to study legislative lobbying while focusing entirely on the interaction of private interests with the MEPs. Even though the committee secretariat might occasionally become a lobby target of private interests, it generally only plays a minor role in the legislative lobbying process.
A principal administrator of the ECON secretariat pointed out to me that hearings are a very interesting way for a committee to interact with private interests. Any of the specialized standing committees of the European Parliament may organize a hearing of experts if it considers doing so to be essential to effectively conducting its work on a particular subject (Rule of Procedure 166 (2)). The hearings may be held in public or in camera. Hearings provide an opportunity to enter into dialogue with interested parties and to attract media attention to a particular issue. In accord with the format of most committees, the expert makes an official statement, which is followed by questions from the MEPs. Experts are selected according to procedures determined within each committee.
Although the use and importance of hearings has increased in recent years, another administrator explained that it has remained a rather exceptional and unimportant instrument for interacting with private interests. There are two main reasons for this: First, even though committees try to minimize costs by mainly inviting interests that are present in Brussels, it remains a very costly undertaking. Second, the deadlines resulting from the legislative procedures put severe time pressure on the committee proceedings. From this perspective, hearings are too time-consuming of a way to consult private interests. In 1999, only two hearings were organized in ECON: the "Hearing towards a Single Market for Supplementary Pensions" on 23 November, and the "Hearing on the Action Plan for Financial Services" on 24 November. In 2000 only one hearing was organized, while in 2001 three hearings were organized in ECON.(13) The experts that participated in these hearings included representatives of European associations as well as individual financial institutions, academics and representatives of the national supervisory authorities.(14) It can be concluded that private as well as public actors have been invited to serve as experts in these hearings. The mentioned drawbacks have however prevented hearings from developing into an important consultation mechanism in the European Parliament.
Intergroups consist of MEPs of different political groups with a common interest in a particular political theme. Some are extremely well organized and have their own secretariats. While the membership in a number of intergroups is limited to MEPs only, others also include trade association or private company representatives. The importance, the structures and the financing of these groups vary greatly. Whereas the political groups support some of the intergroups, others get support from the Commission's budget or directly from industry. An important advantage of intergroups is that they permit MEPs to specialize and to have less formal contacts with outside interests groups than in committee meetings. There have been concerns that some intergroups are too closely linked with certain lobbies. Chairmen of intergroups are therefore required, under Rule of Procedure 9 (1), to declare any support, whether in cash or in kind (e.g. secretarial assistance), which is offered to members. The close relationship between members and private interests is only one of the reasons why the European Parliament's Bureau has become reluctant to give official recognition to intergroups. Official recognition entails that the Parliament itself is prepared to provide the necessary logistics, such as meeting rooms and translation facilities. Given the proliferation in the number of intergroups in recent years, it has been realized that the Parliament is not able to provide facilities to all the potential intergroups.
In June 1998, an Intergroup on financial services was set up under the chairmanship of Mr. Garcia Margallo y Marfyll, a Spanish member of the Committee on Economic and Monetary Affairs. It was established in a joint effort of the Parliament and a number of financial institutions and trade associations. Its stated role was "to provide a forum for discussion and debate on matters and issues relevant to the European financial services sector and to promote awareness and a better understanding of financial services generally". After the 1999 elections, the bureau of the Parliament has decided that it will no longer recognize the Intergroup on Financial Services. Instead the "Forum for Financial Services" has been established to serve as an alternative to the intergroup. The informal character and uncertain subsistence of many intergroups makes them attractive but unreliable arenas for the purpose of legislative lobbying.
The final institutional feature to be studied in the Parliament is the college of quaestors. The college is directly elected by the European Parliament (Corbett et al, 1995:99). The five quaestors of the college have an important internal function within the Parliament, in that they are responsible for administrative and financial matters directly concerning the members. They are also politically responsible for the implementation of the rules on "Lobbying in Parliament" and "Transparency and Member's Financial Interests" (Rule of Procedure 9, Annex I and Annex IX). These rules are the cornerstone of the Parliament's policy to regulate the interaction between members of Parliament and private interests. They were adopted by the Parliament in July 1996, after years of discussion (Schaber, 1998:215). Whereas Rule 9 (2) directly regulates the access of private interests to the Parliament, Rule 9 (1) indirectly regulates the access of these interests by spelling out specific rules the MEPs have to follow when dealing with private interests.
At the beginning of their term of office, each quaestor is entrusted with a particular area of responsibility, such as building policy, financial questions, security, etc. The quaestor responsible for security in the Parliament is also responsible for the implementation of the rules that regulate the interaction with private interests. According to Rule of Procedure 9(2), he is reponsible for " issuing nominative passes valid for maximum one year to persons who whish to enter Parliament's premises frequently with a view to supplying information to Members within the framework of their parliamentary mandate in their own interest or those of third parties." In return, these persons are required to respect a code of conduct and to sign a register kept by the quaestor. It is puzzling to note that this code of conduct, aimed at regulating the behavior of private interests in their relations with the European Parliament, is a part of the Parliament's internal Rules of Procedures (Rule of Procedure 9 (2) and Annex IX Article 3), and it is not the object of normal EU legislation. Any dispute of a member with regard to the activity of a representative or lobby is referred to the quaestor, who may decide whether to maintain or withdraw the pass concerned.
The same quaestor is also responsible for " keeping a register in which each Member shall make a personal detailed declaration of: a) his professional activities and any other remunerated functions or activities, b) any support, whether financial or in terms of staff and material, additional to that provided by Parliament and granted to the Member in connection with his political activities by third parties, whose identity shall be disclosed" (Rule of Procedure 9 (1)). The declarations in the register shall be made under the personal responsibility of the Member, and they must be updated annually.(15) An administrator of Directorate General I of the Parliament Secretariat pointed out that the administrators from the Division Member Activities of Directorate General I are in charge of keeping the register of MEP declarations and the register of lobbyists. Although not formally mentioned in the Rules of Procedure, there is also a register with similar declarations of MEP assistants.
It would however be wrong to conclude on the basis of the Rules of Procedure that the quaestors act as effective gatekeepers of the European Parliament. In practice, hardly any requests for passes based on the Rule of Procedure 9 (2) are refused. The responsible quaestor explained to me that he grants access to the different interests on the basis of two informal rules: 1. A maximum of 6 passes can be granted to the same organization, 2. Interests that constitute a security risk are not granted a pass. It is important to emphasize that neither the public or private character of interests nor their organizational form matters when the nominative passes are issued. The only sanction for interests that breach the code of conduct is the withdrawal of the pass issued to the persons concerned (Rules of Procedure, Annex IX 3 (2)). According to an administrator of the secretariat of the college of quaestors, the application of the rules over the last years has shown that passes are almost never withdrawn. In addition, the implementation of Rule of Procedure 9 (1) does not really shape the interaction between the private interests and the MEPs. The same administrator added that members do not take the declarations for the register very seriously and often do not update the required information. Due to the quaestors' lenient implementation of the Rules of Procedure, it is impossible to conceive of the college of quaestors as the gatekeeper of the European Parliament. The college is clearly not the most relevant part of the Parliament to be studied in order to understand legislative lobbying in the Parliament.
The preceding analysis has made it possible to identify the part of the supranational assembly that is most relevant to the study of legislative lobbying: the European Parliaments committee system. The analysis has not only identified ECON as the leading committee in the area of EU financial services but also as the most relevant part of the European Parliament to be studied in order to understand legislative lobbying in the EU financial services sector.
When studying the different hypotheses at the end of part II, it becomes clear that they concern the relative access of the private actors to the European Parliament. The reason why one organizational form of interest representation enjoys better access to the Parliament than another is the real question to be addressed in this study. The data required to test these hypotheses should therefore relate to the relative access of the different organizational forms. To test the hypotheses, ordinal data on the degree of access of the four organizational forms are thus necessary. Both public and private actors potentially have interesting information about access. Since we are interested in relative access, the focus of the data collection has primarily to be on the public actors, i.e. MEPs. The latter are approached by the different organizational forms who desire to gain access and they are therefore in the best position to evaluate the relative access granted to the private actors. Private actors are mostly unaware of the access enjoyed by other private interests and it is therefore extremely difficult for them to correctly assess the relative access they have to the European Parliament.
In order to test the hypotheses, the relative access of the different organizational forms has to be measured. It was decided to develop a set of structured questions that would be used to obtain comparable and quantifiable data on the access of private interests to the supranational assembly. Because we were interested in data on relative access, the public rather than the private actors were confronted with these questions in a series of semi-structured interviews. The inquiry focused upon those public actors that were judged to be most relevant for legislative lobbying in the European Parliament. Having located legislative lobbying in ECON, the 45 full members of the Committee were identified as the relevant population to be investigated. In order to define the population in ECON, a distinction was made between full members and substitutes.(16)
Members of the European Parliament are full members of at least one specialized committee and sometimes of a second committee as well. Meanwhile, MEPs are often also substitutes in one or more committees. Although substitutes have full speaking rights, they only have full voting rights when they can vote in the place of an absent full committee member of the same political group (Rule of Procedure 153). In practice this means that they are only prevented from voting on those occasions when all the full members of their political group are present and voting. Furthermore, substitutes can also be rapporteurs and draftsmen in the committee meetings. Even though they in fact have very little disadvantage in comparison with the full members, the latter do most of the committee's work. Of the full reports drawn up within the Economic Committee between 1984 and 1989 only one in seven were drawn up by substitutes (Corbett, 1995:111). Because of the substitutes' rather limited involvement in ECON, it seems legitimate that the 45 full members of the committee be identified as the relevant population. Between June 2000 and February 2001, the author conducted 27 interviews with full members of ECON. On average, each interview lasted about 40 minutes.(17)
The 45 full members are identified as the relevant population and a sample thereof is used in order to measure the access of business interests to the European Parliament. Because the identified population of politicians in the Parliament is rather small (population=45), the largest possible sample has been chosen in order to maximize the number of observations (sample=45=popoluation). The response rate amounts to 60% (27 MEPs out of a sample of 45). Of the 18 MEPs that did not participate in the semi-structured interviews, only 5 MEPs never replied to the repeated requests. A majority of 11 of the 13 MEPs that reacted negatively to the invitation explained that the reason for their refusal was a lack of available time.(18) It is important to investigate whether there is no bias in the non-responses or in the sample. The availability of data regarding the nationality or party-affiliation of all the MEPs in the sample allows us to check whether these two variables might cause a bias in the sample. The 2 values and their p-values, which can be calculated for each of the two variables, indicate that there is no bias in the responses regarding these variables.(19) Even though the conditions are not ideal for applying a 2 -test for the two variables, I would argue on the basis of the tests and the analysis of the non-responses that the results of the empirical investigation in the European Parliament are representative for the situation in the EU financial services sector.(20)
The access hypotheses are tested on the basis of ordinal data. In order to obtain information about the relative access of private actors to the Parliament, the politicians were asked during the interviews to provide information about their contacts with private interests in the context of legislative lobbying. The MEPs were invited to establish a ranking of their contacts with the different forms of business interest representation. The interviewees had to indicate with which of the four organizational forms they had had contacts, taking the usefulness and the regularity of the contacts into account. This stands in contrast with previous studies on the European Parliament, which have taken only the regularity of contacts into account when measuring access (Kohler-Koch, 1998:153; Wessels, 1999:108).(21) The resultant rankings indicate which organizational forms the interviewees have chosen as their first, second, third and fourth choices. Table 4 below gives an overview of the ordinal data that was gathered in the European Parliament.
In order to test the hypotheses, the rankings provided by the interviewees have to be combined to obtain an overall or composite ranking of the degree of contact of these interviewees with the different organizational forms. The most straightforward method of obtaining the complete composite ranking of the four organizational forms is to use the weighted sums of the rank values (Guilford, 1954:180).(22) Because rank values are strictly ordinal numbers, the numerical meaning of the weighted sums is not entirely clear. When the weighted sums are calculated, there is an implicit assumption that the distance between the different ranks and therefore the rank values is equal.(23) Hence another more sophisticated method, based on Thurstone's law of comparative judgment, is used and is called the method of paired comparison (Thurstone, 1959:39 and 67).
The method of paired comparison is a one-dimensional scaling method that allows ordinal scale values to be converted into interval scale values (Guilford, 1954:154; Swanborn, 1993:31). In this method, the different organizational forms have to be evaluated by the interviewees in all the possible pairs. The result is a number of comparative judgements. It is important to note that the interviewed officials and politicians were not directly confronted with the paired comparisons of the four organizational forms. Instead they were asked during the interview to establish a complete ranking of the four organizational forms. It is no problem, however, to turn this complete rank-order information into comparative judgements for all pairs of organizational forms. If the four organizational forms, European association (EA) national association (NA), individual company (IF) and consultant (Cons) are ranked in the order given, then six comparative judgements may readily be inferred: EA>NA, EA>IF, EA>Cons, NA>IF, NA>Cons and IF>Cons. This approach is called the pair-comparison treatment of complete ranks (Guilford, 1954:183).
On the basis of the resulting comparative judgements, it is possible to determine the proportion of times each organizational form is deemed greater than every other form. This provides additional information about the intensity of the respondents' preferences when ranking different alternatives. The calculation of the interval scale values is based on this additional data.(24) For more information about the F-Matrix, the P-matrix and the Z-matrix required for calculating the interval scale values of the different organizational forms, along with more details about the data, I refer to an earlier publication (Bouwen, forthcoming (b)) where these matrices are calculated (Guilford, 1954:154-163; Swanborn, 1993:31-45). The important advantage of the paired comparison scaling method is that it not only helps to establish the composite ranking but it also assists in more precisely determining the different degrees of access of the organizational forms to the various EU institutions.
Table 4 below summarizes the rankings provided by the 27 MEPs. The Table contains the frequencies with which MEPs have chosen a particular organizational form as their first, second, third or fourth choice. The result of the 2 -test and the p-value clearly indicate that there is a relationship between the two variables in the Table.(25) The Cramer coefficient of association specifies that there is indeed a rather strong association between organizational form and the degree of access.(26) Even though this result does not confirm the generated hypotheses, it clearly points in the right direction.
A closer look at the first column of Table 4 seems to confirm the proposed hypotheses concerning access to the European Parliament. Whereas a majority of MEPs have preferential contact with the European associations (12), they have clearly less contact with national associations (9) and individual companies (4) respectively. It would, however, be premature to conclude only on the basis of the MEPs' first choice that European associations have effectively better access than national associations and individual companies. The information contained in the three other columns (2nd, 3rd and 4th choice) cannot be disregarded and has to be taken into account simultaneously. The method of paired comparison is therefore used to calculate, on the basis of the 27 individual rankings, the composite or overall ranking of the MEPs' contacts with private interests (Guilford, 1954: 154; Swanborn, 1993:31). The resulting values are reported in Table 5 below.
The obtained composite ranking of organizational forms confirms the hypotheses that were generated regarding access to the European Parliament. European associations (1.71) do have a higher degree of access to the Parliament than national associations (1.69), and the latter have a higher degree of access than individual firms (0.80) and consultants (0.00). Consultants have a substantially lower degree of access than individual firms and are thus the least successful in securing access to the Members of ECON. The difference between the interval scale value calculated for the collective forms of interest representation, i.e. the European and national associations, on the one hand, and the individual firms or consultants, on the other, is rather large. MEPs clearly prefer to talk to lobbyists from representative organizations, irrespective of the level of interest aggregation (national/European). The distance between the values calculated for the European and the national associations is relatively small (0.02). It follows that European and national associations have a rather similar degree of access to the European Parliament. This interesting result points to the successful "Europeanization" of national associations in recent decades (Bouwen, forthcoming (a)). Finally, in order to gain clear insight into the relative access of business interests to the European Parliament, it is necessary to calculate the relative access values of the different organizational forms of business interest representation. The relative access value is calculated by taking the column marginals (sigmas) of the F-Matrix and dividing them by the total number of pairs (N*6) (Bouwen, forthcoming (b)). The resulting percentages are reported in Graph 1 below.
The discussion of the European Parliaments internal organization has shown that the Committee on Economic and Monetary Affairs is the central locus for legislative lobbying in the area of EU financial services. Quantitative and qualitative data were gathered in the committee through semi-structured interviews. On the basis of the ordinal data that was collected among the ECON members, it has been possible to confirm the hypotheses about relative access to the European Parliament. European associations indeed enjoy the best access to the supranational assembly. They have respectively better access to the ECON Members than national associations, individual firms and consultants. The calculated composite ranking of access to the European Parliament is in line with the results of a previous survey analysis undertaken by Beate Kohler-Koch in the European Parliament. When MEPs were asked for their assessment of interest representatives (important/not important), their frequency of contacts (important/not important) and their preferred sources of information (more or less preferred), their answers -each time- produced the composite ranking established earlier in this article (Kohler-Koch, 1998:152-154). The rather similar degree of access of European and national associations to the European Parliament established in this paper is also confirmed by the results of Kohler-Koch (1998:157).(27)
The difference in degree of access between European and national associations turns out to be rather small (0.02). It can be concluded that national associations have almost the same degree of access to the European Parliament as their European counterparts. Another important but less surprising finding is that the degree of access of these two collective forms of interest representation is substantially higher than the access of individual firms or consultants. MEPs clearly prefer to talk to lobbyists from representative organizations. The fact that individual firms have difficulties providing encompassing access goods seriously reduces their capacity to gain access to the European Parliament. Furthermore, the data show that consultants have the lowest degree of access to ECON. Because they do not represent their own genuine interest, they are considered less trustworthy and MEPs are therefore reluctant to include them in their personal networks. Third party representation is clearly the least successful organizational form for gaining access to the European Parliament. On the basis of these empirical results, it can be concluded that the supply-and-demand scheme of access goods is a useful instrument for understanding the access of different forms of business interest representation to the European Parliament.
An explanation for the surprisingly good access of national associations to the Parliament can be found in the fact that MEPs remain firmly rooted in their national political systems. The MEPs active participation in national party politics and their involvement in their countrys social life provide multiple opportunities for the politicians to interact with national public and private interests. Their close relationship with the national political level is illustrated by the substantial amount of time they spend on requests coming from the national level and the important number of personal assistants working for them in their home countries (Bouwen, 2003). The close contacts between MEPs and national associations are a logical consequence of this relationship. Do these findings not stand in contradiction to the new strand of literature dealing with party cohesion and coalition formation in the European Parliament (Attina, 1990; Brzinski, 1995; Raiuno, 1997; Kreppel and Tsebelis, 1999; Hix 2001)? This research has shown a growing level of cohesion for all transnational party groups in the Parliament. Furthermore these authors find that, generally, coalitions form on the basis of ideology and not nationality. Although they admit that party cohesion occasionally breaks down and that national groups vote against the majority of their party group, they basically argue that ideology has become a more important cleavage than nationality in the European assembly.
Their argument, however, does not contradict our findings that national associations have a surprisingly good access to ECON. Even though nationality might have lost weight in determining the voting behavior of MEPs, it remains a crucial factor in the political game. An important reason is that national political parties rather than the transnational party groups control the process of selecting candidates for the European Parliament elections. Although the transnational political groups influence the achievement of policy and office goals within the Parliament, they do not control the candidate selection process, and they therefore have substantially less clout to prevent national delegations from defecting from the party group line. If an issue is highly salient at the national level and the MEP is torn between the position of his transnational party group and his national interest, the MEP is therefore likely to vote along national lines and against his party group. The regular interaction of the MEPs with their voters and national interest representatives at home is important for identifying the national interest. Information about the domestic encompassing interest is crucial for MEPs when deciding whether it is necessary to defect from the transnational party group line on an issue that is highly salient at the domestic level. When nationally non-sensitive issues are discussed, MEPs have more freedom to contact European associations and other non-national interests. But even for these issues it is often convenient for MEPs to contact their national associations. Not only do these associations speak the same language, they also provide information that can be easily understood by the MEPs because of their familiarity with the national political context. It allows the MEPs to use the situation in their Member State as yardstick to evaluate and judge the situation in the rest of Europe. It can be concluded that the fact that nationality remains an important dimensionality of legislative politics in the European Parliament helps to explain the important role of national associations in the Parliament.
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(*) I would like to thank my colleagues and friends from the Max Planck Institute for Research on Collective Goods in Bonn and the Max Planck Institute for the Study of Societies in Cologne for their useful comments on earlier versions of this paper: Martin Beckenkamp, Andreas Broscheid, Alkuin Kölliker, Wolfgang Streeck and Joerg Teuber. Furthermore, I am grateful to Michael Nentwich, John Peterson, Jim Rollo and the anonymous referees for their constructive comments and to Darrell Arnold for the language corrections. Finally, I would like to thank the interviewees who gave so freely of their time. Meanwhile, an amended version of this paper has been accepted for publication by the Journal of Common Market Studies in the spring of 2004.
(1) The characterization of the EU as a regulatory state legitimizes this exclusive focus on legislative lobbying (Majone, 1994). "Funds-lobbying" is rather limited at the European level because of the relatively small size of the EU budget (Buholzer, 1998:8).
(2) An exception are the recent theoretical studies of Broscheid and Coen (2003) and Crombez (2002) that focus on the informational role of interest groups in EU policy-making.
(3) Financial Services: Building a Framework
for Action. Commission Communication of 28/10/98. COM (1998) 625. In June 1998,
the Cardiff European Council had asked the European Commission to table an
action plan to improve the single market in financial services.
Financial Services Implementing the Framework for Financial Markets: Action Plan. Commission Communication of 11/05/99. COM (1999) 232.
(4) Many authors have applied exchange theories to interest intermediation and interest group politics. The exchange paradigm is a central feature of neo-corporatism (Schmitter and Streeck, 1999). Network analysis focuses on inter-organizational exchange to study various forms of interest intermediation (Pappi and Henning, 1999). In political economy or public choice, the market is the model for political exchange (Becker, 1983; Potters and Van Winden, 1990).
(5) Mitchell and Munger (1991) offer an introductory survey of these public choice approaches. For a survey of empirical rational choice models of interest group behavior, see Potters and Sloof (1996).
(6) The original theoretical framework build on the basis of the 63 exploratory interviews covers not only the European Parliament but also the European Commission and the Council of Ministers (Bouwen, 2002).
(7) A number of new collective fora such as direct membership associations of firms and mixed membership associations of firms and national associations are not included because they did not exist in the EU financial services sector at the time of the investigation (Bouwen, forthcoming (a)). It would, however, not be problematic to derive the supply of access goods also for these new organizational forms of business interest representation.
(8) The two authors emphasize the importance of ideology over nationality in the European Parliament. In their article on coalition formation in the Parliament under the cooperation procedure, the authors find that, generally, coalitions form on the basis of ideology, not nationality. Nevertheless, they are also able to identify some national groups that occasionally vote against the majority of their party group.
(9) It is common wisdom that single member constituencies provide a direct link between the voter and the legislator and bring more easily local and regional concerns to the forefront. In other systems, in particular in proportional representation, this link becomes attenuated. The electoral systems in the Member States of the European Union are based on some kind of proportional system. Although these systems only have a weak element of constituency representation, the MEPs are nevertheless elected at the national level and therefore retain important links with their electorate back home.
(10) The competencies of the Parliament's 17 specialized committees are set out in annex VI of the Rules of Procedure.
(11) Apart from financial services, ECON is also responsible for the gradual establishment of the Economic and Monetary Union and the relations with the European Central Bank.
(12) Before the 1999 election, the Committee on Legal Affairs and the Internal Market was the "leading committee" for financial services. Now the Rules of Procedure specify that the Committee is responsible for matters relating to the right of establishment and the freedom to provide services (Article 43 to 55 of the EC Treaty), except for financial services.
(13) Hearing on the Progress in the coordination of tax policies in the European Union, 19 June 2000; Hearing on Supplementary Pensions, 6 February 2001; Hearing on the Implementation of the Rules of Competition, 27 February 2001; Hearing on Services of General Interest in Europe, 6 March 2001.
(14) The experts that attended the Hearing
"Towards a Single Market for Supplementary Pensions" belonged to the following
organizations: European Trade Union Confederation, FNV Bondgenoten, Salomon
Brothers, European Federation for Retirement Provision, Comité Europeen
des Assurances, Ministerio de Economia y Hacienda.
The experts attending the Hearing on the Financial Services Action Plan belonged to the following organizations: Bundesaufsichtsamt für das Kreditwesen, Universita Bocconi, Financial Services Authority, Ministry of France/Director Financial Market and Cash Management Directorate, Barclays Bank, Comision Nacional del Mercado de Valores, Institut für Finanzdienstleistungen.
(15) Since July 2001 the details of the financial interests of the MEPs are posted on the Internet. In this regard take a look at John Shelley, "Anti-Secrecy MEPs snub transparency", European Voice, 12-18 July 2001.
(16) The appointment of full members and substitutes to committees is decided upon by the political groups in such a way as to ensure that each committee reflects the overall political balance between the political groups in the plenary session (Rule of Procedure 152).
(17) The total amount of time spent on interviewing the 27 politicians in the European Parliament amounts to 18 hours and 55 minutes.
(18) The fact that MEPs are obliged to travel between Strasbourg, Brussels and their home country helps to explain the response rate of the MEPs in ECON.
(19)For the nationality variable:
2 =8,359, p=0,870. Ho: "There is
no bias in the responses" cannot be rejected.
For the party-affiliation variable: df=7, 2 =11.91, p=0,104. Ho: "There is no bias in the responses" cannot be rejected.
(20) It should be noted that for the two preceding variables, the conditions are not ideal to apply the chi-square test. Since the degrees of freedom are greater than 1, no more than 20 percent of the cells should have an expected frequency of less than 5, and no cell should have an expected frequency of less than 1 (Siegel and Castellan, 1988:199). These conditions are not fulfilled for the two variables.
(21) Interestingly, Wessels finds that there is a clear relationship between the frequency of contacts between MEPs and interest groups and the MEPs responsiveness to interest group demands. He finds a correlation at the aggregate level of 0.69. The author believes there are good theoretical reasons to assume a causal relationship between responsiveness and frequency of contacts: rational actors first go where they are best heard (Wessels, 1999:113). Wessels arguments therefore support our initial claim about the close relationship between influence and access. Interest groups are namely inclined to contact and gain access to the MEPs who are most responsive to their demands.
(22) What are the rank values? The normal custom of assigning the greatest or highest value a rank of 1 has been followed here. The ranks 1 through to n, however, are only used to record the data. In the further treatment of the data, the rank numbers are replaced by their rank values. The rank values R i are a series of values in exact reverse order to the rank r i . R i is related to r i by the simple equation R i = n r i + 1. In this project the highest rank, rank 1, corresponds to rank value 4. In order to obtain the composite ranking, the resulting rank values (4,3,2,1) are weighted for each organizational form with the frequencies with which the respondents chose the organizational form as their first, second, third or fourth choice.
(23) The different intensities of interviewees' preferences for different organizational forms and therefore the different distances that might exist between consecutive ranks are not taken into account by the method of the weighted sums.
(24) This data should therefore better reflect the distance between the intensities of the interviewees' preferences for different organizational forms.
(25) It should be noted that the conditions are satisfied to apply the chi-square test. Since the degree of freedom is greater than 1, no more than 20 percent of the cells should have an expected frequency of less than 5, and no cell should have an expected frequency of less than 1 (Siegel and Castellan, 1988:199). These conditions are met for the calculation of chi-square.
(26) The Cramer coefficient is useful when only categorical data on the variables is available. Like the Pearson correlation coefficient, the Cramer coefficient has a maximum value of 1 and the coefficient will be equal to 0 when the two variables are independent. Unlike the Pearson coefficient, the Cramer coefficient cannot be negative (Siegel and Castellan, 1988:227).
(27) Whereas Wessels finds that national associations have more access than European associations to the MEPs, it is difficult to compare these deviating results with our findings because different answer categories were used (1999:115).