TEATRO

The parallel between the EU-based MLG and the LIA-based MLG is found in the role of supranational organisations that work outside of the boundary of national government but have access and influence to set the policy directions at national and subnational levels. In Europa, the EU acts as supranational entity with well-established rules and regulations, while in LIA cities, the international development agencies act as supranational entity even though they have not established clear rules and regulations.

In Europe, the EU covered integration of environment, energy, climate and transport policies (Bache, 2010b; Marshall, 2005). Integration results in structural change to institutional settings and domestic politics (Gualini, 2003). The process becomes complex because in fact not all member states are at the same level and therefore integration raises issues of authority, effectiveness of policy, legitimacy, accountability, and identity (Bache, 2010b; Gualini, 2003; Marshall, 2005). Sometimes, the EU is also referred to as a federal system to explain policy integration in the region (Studlar, 2010). The structure of the EU includes cooperation between public and private actors (Papadopoulos, 2010).

MLG explains not only the relationships between the EU and its institutions (the European Commission, the EU Parliament, the EU Court of Justice), but also the relationships between the EU and member states, regional and local governments in Europe (Cairney, 2012). Due to a highly sophisticated governance framework in Europe, MLG provides a useful lens to understand policy-making in particular areas such as transport (Jordan, van Asselt, Berkhout, Huitema, & Rayner, 2012). The MLG structures can be divided into three different levels, starting from the supranational level at the EU level, followed by the national level, and lastly, the subnational level of governance including the city level governance. The first level, at the EU level, policy decision- makers hold authority in the EU decision-making processed by means of institutions, both formal and informal, which results in the balance of power between the Commission, Council, and Parliament (Thomson & Hosli, 2006). In addition, the source of power may arise from the allocation of funds to finance the programmes as part of policy implementation from the supranational level. The example of the EC shows how Structural Funding exhibits power and influence on implementing policies at the regional level (Mann & Haugaard, 2011).

The second, at the national level, political power is also associated with the role of the state in struggling to prevent its policy decision-making power from hollowing out. The hollowing out mechanisms distribute power through both scaling-up to supranational level and scaling-down to subnational level, and sideways (non-state actors at the same level) (Jessop, 2004). The discursive and financial power of EC changes the hierarchical role of central government in providing funding to subnational government but at the same time raises questions about the legitimacy of the policy-making process.

The third, at the subnational level, power is exercised through the formation of partnerships between institutions at a particular level of governance and a higher level, such as the supranational institutions (Bache, 2010c). However, within the partnerships formed, issues of political power are less visible (Bache, 2010c; Piattoni, 2009). The limited financial resources of subnational level government have resulted in the lack of capacity to develop true partnerships. However, the subnational government has some strengths in cultural distinctiveness, administrative capacity to approach people, and local political will (Piattoni, 2009). Through partnership, the subnational governments participated and influenced the policy agenda of the EC with the help of other actors such as non-governmental organizations, social, and advocacy groups (Piattoni, 2009).

The Commission plays a leading role in placing issues on the agenda, and responding to the objections voiced by the central government of member states as formal institutions (Carbone, 2007). The European Commission (EC) comprises the president, commissioners, the cabinets, and directorate generals of various EU agencies (Carbone, 2007). As a result, within the EC organisational structure, potential causes of tension emerge from the interactions among these agencies, their policies and implementation mechanisms as well as with the organisational structure of member states (Piattoni, 2009). Generally, the member states lobby during the formulation of policy objectives and agenda and conduct negotiations before implementation. The lobbying and negotiations processes are forms of informal institutional practices. This is because EC policies might result in the structural change of institutional settings, rules and regulations, which ultimately affects domestic politics (Gualini, 2003).

The dynamic nature of the relationship between the EC, member states and regions may set policy direction. These relationships exhibit characteristics of both top-down and bottom-up approaches (K. Kern, 2010). The top-down approach refers to the process by which the EC dictates environment or climate change policies to its member states (Jordan et al., 2012). The bottom-up approach refers to the influence of the central government, subnational governments and grass roots organisations on EC-formulated policies.

In addition, the uniqueness of the EU policy-making process is also reflected in the dominant nature of the technocratic approach within the EC governance structure. The EC and its agencies rely on experts having sufficient knowledge for specific policies, such as the environment, energy, transport, agriculture etc. In reality, the role of the EU agencies is critical for disseminating information to decision makers at the EU level and for implementing policies directed by the Commission (Wonka & Rittberger, 2010). EU agencies worked with both the EU decision-makers and the central governments of member states and with technical experts, interest groups and sub-national governments. While a reliance on technical expertise will bring some benefits for improved policy contents in problem-solutions relationships, it has also some drawbacks in terms of a lack of understanding of domestic politics and people aspirations. This is reasonable, as policy decision-making at the EU level has less intervention in terms of policy implementation in specific fields, as the fields are the domains of the national governments’ responsibility (member states level).

Consequently, the EC has overlooked the domestic politics that take place at the member state level due to its limited mandate in managing the domestic affairs of member states. The Structural Fund is set up by the EC as one of the financial instruments to initiate the integration in the EU’s policies. While the EC exercises its financial power to dictate the policy decision-making process at the supranational and national level, the allocation of financial resources to the local and regional governments during the implementation of the policies. This financial link between various agencies of the EC and subnational governments strengthens both organisations’ roles and interactions (Bache, 2008). City governments in Europe create networks and improve institutional arrangements in the light of EC directions to get EC funding. This results in an improvement in overall capacity of regional and local institutions.

Local government in Europe generally accepts the need to build strong links with other local government. These links are voluntary in nature and provide a platform for exchanged ideas and urban governance issues among cities in Europe through transnational municipal networks (TMNs). Through TMNSs, local governments can influence policy decisions at the local level as well as at the national, regional, and international levels in Europe.

The EC example shows how Structural Funding exhibits power and influence on the implementation of policies at the regional and local levels (Mann & Haugaard, 2011). The understanding of power in general, and economic power helps to interpret where power lies and how power is exercised in addressing multi-level policy tensions as policy direction is set.

The financial power of the EC changes the hierarchical role of central government in providing funding to subnational governments, but at the same time raises questions about the legitimacy of the policy-making process. Legitimacy involves communication and participation for justification and acceptability of policies between the EC and the affected communities (Bernstein, 2011). Kim (2009) refers to the process of enhancing the participation of all the societal groups, ensuring adequate negotiation procedures and increasing transparency of the decision-making process to improve legitimacy. In this way, subnational governments participate and influence the policy agenda of the EC, with the help of other actors such as non-governmental organizations, social and advocacy groups (Piattoni, 2009). These actors develop a policy network based on their interest and shared information and resources (I. Blanco, Lowndes, & Pratchett, 2011). Moreover, the EC’s structure also promotes cooperation between public and private actors to achieve a common goal (I. Blanco et al., 2011; Papadopoulos, 2010).

The actual distribution of power in the context of the EU management enhances an understanding of a multi-directional influence of power in MLG systems. Economic and political powers pose challenges to the practices found in MLG structures. The competition among policy actors at different level is unavoidable, which become the reason to establish partnership as a platform for building more effective interactions and coordination for integrating the policies. Therefore, this research seeks to understand the

actual distribution of power from supranational to national and subnational governance level.

While power relation is important in the MLG theory, legitimacy concern has been a crucial problem in the governance of multi-level environment too. Responding to this legitimacy concern, the EC issued an EU White Paper on European Governance in 2001 (The EU-Committee of the Region, 2009). The White Paper outlines how the European decision-making processes will facilitate participation, transparency, and consultation and mentioned mechanisms on how to improve European governance ability and capacity. However, this effort still leaves some gaps in enhancing the legitimacy of European governance. Formal actors from the government or public sector and informal actors from the private sector and NGOs are involved in selected policy-making processes. The relationships among these actors are complex, as each actor acts both as an individual and as the representative of an institution. Therefore, the source of legitimacy may well stem from the individual actor or the institutions with which they are associated.

Communication among the members of the EU-based MLG is also complicated. This is just to show that EU-based MLG is still experienced as an on-going formation that must be adjusted to the new dynamic of local politics. The European Commission also encourages multiple actors’ participation in the MLG structure under the Open Method Communication (OMC) (Pollack, 2005). OMC, such as online methods between the EC and these actors improves communication and participation of local level actors and influences policy agenda (Pollack, 2005). This is one of the strategies to enhance legitimacy in the EU through expanding the participation of the relevant stakeholders and improving the output of the participation process (Guastaferro & Moschella, 2012). These efforts initiate consultation in the formal process and enhance the political process. However, its effectiveness in improving EU legitimacy remains stagnant (Labitzke, 2012). In short, the understanding of the planning process in general and the level of communication between supranational organisations and wider actors helps to determine the legitimacy concerns in making of the policy at the EU context.