PRESENTACIÓN DE LAS OFERTAS

After the first sub-section has derived the preferences of actors under interdependence and specified parameters for the capacity of individual sub-sector to influence the collective preference of a collective actor, the goal of this second sub-section is to deduce the potential actor constellations that allow an actor to use interdependence as an opportunity structure. It is here that the focus of this book and its development of the Inter-relational Institutionalism lies. This sub-section shows how the incorporation of the New Interdependence Approach specifies potential domestic actor constellations and thus the constraints on actors that arise from the overlap of jurisdictions and institutional asymmetries.

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As explained in chapter 4.1.1., actor-centred institutionalism understands actor-constellations as determined by the set of domestic institutions in which an actor is embedded. These institutions influence actors’ perception of reality and structure their interactions21_{. Institutions also determine the}

autonomy of actors vis-à-vis potential veto players. They lay down the rules for decision-making and the delegation of authority. Chapter 4.1.2., however, discussed the assumption of the New Interdependence Approach that institutions shaping the interactions and constellations of actors are not distinct sets or independent units of analysis, but overlapping structures. The incorporation of the New Interdependence Approach therefore crucially adds to the actor-centred institutionalism that the use of interdependence as an opportunity structure is subject to potential actor constellations at the domestic level. Potential domestic actor constellations that an actor expects, in turn, reflect the conflict between domestic and foreign incentive structures. They therefore constrain the decision of an actor to use interdependence as an opportunity structure.

For argumentative clarity, some of the assumptions of the Inter-relational Institutionalism that have been stated in the introduction to this chapter shall be briefly recalled before the actor constellations resulting from institutional asymmetries across jurisdictions are further elaborated. First, power resources in regulatory cooperation are shaped by domestic institutions, notably regulatory capacity, regulatory stringency as well as a large internal market. These assumptions reflect the deduction of power resources according to the New Interdependence Approach. Although this view is not uncontested (Elsig, 2013; Falkner & Müller, 2013; Gehring et al., 2013; Jorgensen et al, 2011; Niemann & Bretherton, 2013; Oberthür & Rabitz, 2013), the Inter-relational Institutionalism adopts the finding of the New Interdependence Approach that centralised regulatory authority is a source of asymmetric power. It thus assumes that actors pursue regulatory cooperation in areas that fall under their regulatory authority. At the same time, the Inter-relational Institutionalism does not concentrate on the role of domestic institutions as rules determining ratification rules. Regulatory cooperation by means of non-treaty and formal cooperative agreements often entails that regulators can enter cooperation without requiring formal domestic ratification.

Second, in regulatory cooperation, radical institutional change is rare. The resilience of institutions reflects the increasing returns they offer to previously enacted actors and thus makes changes to institutions often path-dependent. Even actors seeking to resolve regulatory clashes do not necessarily support overturning foreign institutions (Farrell & Newman, 2014: 26). Rather, actors promote policy coordination within existing rules and structures and seek adaptations within status quo institutions22,23_.

21 _{This resonates with Frieden’s (1999) argument that the formation of an actor’s strategy is dependent on the}

“possibilities presented by the environment” and the “constraints of circumstance” (Frieden, 1999: 45).

22 _{This reflects the conclusion of Thelen (2004) that most forms of policy adaptation take place outside ‘critical}

junctures’ and take an incremental form.

23 _{This assumption differs from the focus of the New Interdependence Approach literature on institutional change}

across borders through cross-layering or the use of interdependence as an opportunity structure to change international-level institutions (Büthe & Mattli, 2011; Bach & Newman, 2010).

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The strategy choice of actors is therefore constrained by the need for agreement with foreign actors given foreign institutions (Damro, 2006).

Chapter 4.2.1. has deduced that interdependence creates incentives for actors to use rule overlap as an opportunity structure to reduce the uncertainty of intervention against their preferences. Beside the availability of the power resources regulatory capacity, regulatory stringency and market size, the ability of an actor to use overlap as an opportunity structure depends on the actor constellations that result from the institutional conditions. The New Interdependence Approach offers an argument for the ability of domestic actors to use international institutions as an opportunity structure (Büthe & Mattli, 2011): the complementarity argument. While the argument of the New Interdependence Approach refers to a ‘vertical mechanism’ (chapter 3.1.2.), the essence of this theoretical argument can be transferred to a horizontal mechanism too.

The complementarity argument states that the ability of an actor to use international institutions as an opportunity structure depends on the complementarity between domestic and international incentive structures, where complementarity describes the level of fit between institutions (Büthe & Mattli, 2011). It posits that domestic institutions yield higher benefits if they are combined with a ‘fitting’ international institution (Büthe & Mattli, 2011: 29). Complementarity between domestic and international institution is a power resource as it determines the constellations between domestic and foreign actors and among different domestic actors. Put differently, the complementarity of domestic and international institutions implies that the incentive structures of the different sets of institutions are not in conflict with each other. The complementarity argument can easily be adapted to incentive structures and actor constellations between a domestic and a foreign jurisdiction horizontally. The argument then takes the assumption of actor-centred institutionalism, i.e. that an actor’s ability to pursue a preference depends on the constellation of actors, as the point of departure. Under interdependence, however, actor constellations are not defined purely ‘domestically’, but transnationally. The incorporation of New Interdependence Approach into actor-centred institutionalism hence proposes that not only domestic institutions, but the relation between domestic and overlapping foreign institutions determines actor constellations. The overlap of jurisdictions potentially creates conflict among the rules and structures of the domestic and the foreign jurisdiction. More specifically, if overlapping jurisdictions give rise to conflicting incentive structures, the foreign institutions set incentives which conflict with the preferences of the ‘main’ domestic actor that are derived from domestic incentive structures24_{. Thus, if incentive structures}

Zdenek and Müller (2016), examining the case of accounting standards, also propose that if domestic institutions are ‘weak’ relative to foreign institutions, actors with the necessary capabilities can seek to strengthen domestic institutions by changing domestic institutions in line with foreign institutions. The international level may constitute a ‘global exit mechanism’ from a ‘joint-decision trap’ at the domestic level reflecting divergent and incompatible preferences of member states. The Commission thus leverages ‘international’ institutions by creating policy options that were not available at the domestic level and creating previously unavailable side-payments.

24 _{This argument reflects the assumption of actor-centred institutionalism that institutions constitute and shape}

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conflict, also the preferences of actors constituted by these incentive structures must conflict. Neglecting or ignoring the conflict in incentive structures by assuming the equality of incentive structures must violate the preferences of the ‘main’ domestic actor.

At the same time, if an overlap of jurisdictions and institutions leads to conflicting incentive structures, the main domestic actor would either need to change domestic or foreign institutions to resolve the conflict. This institutional change may, however, be assumed as unlikely (see assumption (6) in the introduction to chapter 4). If the domestic main actor nonetheless sought to use rule overlap as an opportunity structure to reduce uncertainty, other domestic actors would mobilise and seek to intervene. If domestic and foreign incentive structures then conflict, the potential actor constellation is conflictual. The intervention of other domestic actors would increase uncertainty and violate the material interest of the actor. Conflicting incentive structures created by conflicting domestic and foreign institutions thus give rise to a conflictual actor constellation. The latter then constrains the ability of the main actor to use interdependence as an opportunity structure.

From this reasoning, it follows that interdependence is only an opportunity structure for actors to pursue their preferences beyond their domestic institutional embeddedness if overlapping jurisdictions do not create conflicting incentive structures. The latter would give rise to a conflictual actor constellation against the main actor at the domestic level. Put differently, actors are only able to pursue their preferences under overlapping jurisdictions if these overlapping jurisdictions do not create conflicting incentive structures. Note that this condition strongly differs from the condition formulated by Scharpf (1997) that (only) institutions in which actors are ‘embedded’ shape the actor constellations under which a (capable) actor pursues its preferences.

If, in turn, incentive structures of domestic and foreign institutions do not conflict, the actor constellation is non-conflictual. The ability of the main actor to use interdependence as an opportunity structure at the domestic level is thus constrained by the conflict or non-conflict between domestic and foreign incentive structures. This constraint also relates to the risk perceived by an actor that other domestic actors may intervene and impede its autonomy as they seek to avert a negative influence of conflicting foreign institutions. Büthe and Mattli (2011) argue that the vertical absence of conflict in incentive structures gives rise to institutional complementarities. This argument can be adapted to the use of interdependence horizontally. The absence of a conflict in horizontal incentive structures shall be called ‘compatibility’, adopting terminology used earlier by Nicolaidis (2000) and Pollack (2003). Two sets of institutions are ‘compatible’ with each other if they do not have underlying conflicting incentive structures. From the latter it follows that compatibilities determine the access and ability of actors to use opportunity structures resulting from overlapping jurisdictions. More specifically, if two sets of overlapping institutions are compatible, actors can use them as an opportunity structure to pursue their preferences beyond the set of institutions in which they are embedded domestically.

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Compatible institutions present an opportunity structure because they allow actors who prefer to cooperate with other actors building alliances in support of cooperation across borders. Theoretically, actors with a preference to cooperate will want to choose a strategy that they can pursue without conflictual actor constellations. Combining the actor-centred institutionalism with the New Interdependence Approach now derives the conclusion that the ability of actors to pursue their preferences depends on the constellations of actors in the domestic and the overlapping foreign jurisdiction. If incentive structures conflict that shape the behaviour of two actors in interaction, an actor seeking cooperation with an actor from the foreign jurisdiction will face the threat of intervention and will be unable to build an alliance. If incentive structures do not conflict, though, the actor interested in cooperation will not face opposition and will be able to form an alliance that reflects the preferences of actors in both the domestic and foreign jurisdiction.

Lastly, this reasoning now also allows formulating a causal mechanism to describe the use of interdependence as an opportunity structure by the domestic ‘main’ actor. To address domestic opposition by actors against institutional change or cooperation, actors who seek to use interdependence as an opportunity structure form argumentative coalitions. These coalitions consist of actors with similar preferences and access to opportunity structures across jurisdictions. They are initiated by the actor with power resources, high access to interdependence opportunity structures and low collective action problems. The actor who initiates coalition-building uses these coalitions to enhance the legitimacy of its demands and build up domestic argumentative pressure.

To conclude, this section has deduced the analytical dimensions of the Inter-relational Institutionalism based on two building blocks of actor-centred institutionalism: actor characteristics and actor constellations. Related to actor characteristics, it has shown that the conception of actor behaviour as intentionally rational allows incorporating sociological-constructivist understandings of behaviour into rational-choice preference models. It has specified that under interdependence, actors develop a preference to use rule overlap as an opportunity structure to reduce uncertainty and avoid negative intervention by other actors. Moreover, it has argued that intentionally rational behaviour may vary among different sub-actors within collective actors, based on their structural embeddedness in different contexts and their different identities.

With regard to actor constellations, this section has deduced that institutional compatibilities between the domestic and foreign jurisdictions constrain the ability of actors to use interdependence as an opportunity structure. The conflict between the incentive structures created by domestic and foreign institutions constrain the ability of the main domestic actor to use interdependence as an opportunity structure at the domestic level as it risks an intervention by other domestic actors to avert the influence of conflicting foreign institutions. This section has therefore deduced that an actor only uses interdependence as an opportunity structure if incentive structures between the domestic and foreign jurisdiction are non-conflicting.

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Moreover, it has deduced the causal mechanism that describes the use of interdependence as an opportunity structure by the domestic ‘main’ actor. An actor who comes to prefer using interdependence as an opportunity structure mobilises other actors with similar preferences to form argumentative coalitions to enhance the legitimacy of its demands and build up domestic argumentative pressure. The next section will apply the abstract theoretical framework to bilateral regulatory cooperation.