Comparative Administrative Law [2 ed.] 1784718653, 9781784718657

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COMPARATIVE ADMINISTRATIVE LAW

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RESEARCH HANDBOOKS IN COMPARATIVE LAW Series Editors: Francesco Parisi, Oppenheimer Wolff and Donnelly Professor of Law, University of Minnesota, USA and Professor of Economics, University of Bologna, Italy and Tom Ginsburg, Professor of Law, University of Chicago, USA The volumes in this series offer high-level discussion and analysis on particular aspects of legal systems and the law. Well-known scholars edit each handbook and bring together accessible yet sophisticated contributions from an international cast of top researchers. The first series of its kind to cover a wide range of comparative issues so comprehensively, this is an indispensable resource for students and scholars alike.   Titles in this series include: Comparative Constitutional Law Edited by Tom Ginsburg and Rosalind Dixon Methods of Comparative Law Edited by Pier Giuseppe Monateri Comparative Law and Society Edited by David S. Clark Comparative Labor Law Edited by Matthew W. Finkin and Guy Mundlak Comparative Tort Law Edited by Mauro Bussani and Anthony Sebok Comparative Competition Law Edited by John Duns, Arlen Duke and Brendan Sweeney Comparative Law and Economics Edited by Giovanni B. Ramello and Theodore Eisenberg Comparative Criminal Procedure Edited by Jacqueline E. Ross and Stephen C. Thaman Comparative Law and Regulation Understanding the Global Regulatory Process Edited by Francesca Bignami and David Zaring Comparative Contract Law Edited by Pier Giuseppe Monateri Comparative Property Law Global Perspectives Edited by Michele Graziadei and Lionel Smith Comparative Administrative Law Second Edition Edited by Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson

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Comparative Administrative Law Second Edition

Edited by

Susan Rose-Ackerman Henry R. Luce Professor of Jurisprudence (Law and Political Science), Yale University, USA

Peter L. Lindseth Olimpiad S. Ioffe Professor of International and Comparative Law, University of Connecticut, USA

Blake Emerson Research Fellow, Administrative Conference of the United States, USA

RESEARCH HANDBOOKS IN COMPARATIVE LAW

Cheltenham, UK • Northampton, MA, USA

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© The Editors and Contributors Severally 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA

A catalogue record for this book is available from the British Library Library of Congress Control Number: 2017931774 This book is available electronically in the Law subject collection DOI 10.4337/9781784718671

ISBN 978 1 78471 865 7 (cased) ISBN 978 1 78471 867 1 (eBook) Typeset by Servis Filmsetting Ltd, Stockport, Cheshire

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Contents List of contributorsix Acknowledgements xxii Introduction1 Susan Rose-Ackerman, Peter L. Lindseth, and Blake Emerson PART I CONSTITUTIONAL STRUCTURE AND ADMINISTRATIVE LAW: TRADITIONS AND TRANSFORMATIONS  1 Révolution, Rechtsstaat and the Rule of Law: historical reflections on the emergence and development of administrative law  Bernardo Sordi 

23

  2 Good-bye, Montesquieu Bruce Ackerman

38

  3 Politics and agencies in the administrative state: the U.S. case Peter L. Strauss

44

  4 Written constitutions and the administrative state: on the constitutional character of administrative law Tom Ginsburg

60

  5 Comparative positive political theory and empirics M. Elizabeth Magill and Daniel R. Ortiz

71

  6 The ‘Neue Verwaltungsrechtswissenschaft’ against the backdrop of traditional administrative law scholarship in Germany Andreas Voßkuhle and Thomas Wischmeyer

85

  7 Transformations of administrative law: Italy from a comparative perspective Marco D’Alberti 

102

  8 Hungary’s post-socialist administrative law regimes Kriszta Kovács and Kim Lane Scheppele

119

PART II  ADMINISTRATIVE INDEPENDENCE   9 The promise of comparative administrative law: a constitutional perspective on independent agencies Daniel Halberstam

139

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vi  Comparative administrative law 10 The puzzle of independence and parliamentary democracy in the common law world: a Canadian perspective Lorne Sossin

159

11 Assessing the theory of presidential dominance: empirical evidence of the relationship between the executive branch and regulatory agencies in Brazil Mariana Mota Prado

181

12 Experimenting with independent commissions in a new democracy with a civil law tradition: the case of Taiwan Jiunn-rong Yeh 

198

13 Flag-bearers of a new era? The evolution of new regulatory institutions in India (1991–2016) Arun Kumar Thiruvengadam

218

14 A comparison of US and European independent commissions Martin Shapiro

234

PART III  TRANSPARENCY, PROCEDURE, AND POLICY-MAKING 15 Citizens and technocrats: an essay on trust, public participation, and government legitimacy  Susan Rose-Ackerman

251

16 The rise of reason giving in American administrative law Jerry Mashaw

268

17 The 2015 French code of administrative procedure: an assessment Dominique Custos 

284

18 Three generations of administrative procedures Javier Barnes

302

19 Administrative agencies as creators of administrative law norms: evidence from the UK, France and Sweden  Dorit Rubinstein Reiss

319

20 Comparing regulatory oversight bodies: the US Office of Information and Regulatory Affairs and the EU Regulatory Scrutiny Board  Jonathan B. Wiener and Alberto Alemanno

333

21 Looking for a smarter government (and administrative law) in the age of uncertainty352 Giulio Napolitano 22 Participation and expertise: judicial attitudes in comparative perspective Catherine Donnelly 

370

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Contents  vii PART IV  ADMINISTRATIVE LITIGATION AND ADMINISTRATIVE LAW 23 Judicial review of questions of law: a comparative perspective Paul Craig

389

24 Proportionality review in administrative law Jud Mathews

405

25 Voidness and voidability of unilateral administrative acts in the Western tradition  Gabriel Bocksang Hola 26 The powers and duties of the French administrative law judge Jean Massot 27 Judicial review of agency action in the U.S. and Israel: the choice between open and closed review Michael Asimow and Yoav Dotan 28 The ‘double helix’ of process and substance review before the UK Competition Appeal Tribunal: a model case or a cautionary tale for specialist courts?  Athanasios Psygkas 29 Judicial deference to agency’s discretion in new democracies: observations on constitutional decisions in Poland, Taiwan, and South Africa Cheng-Yi Huang 30 Legal management of urban space in Japan and the role of the judiciary Narufumi Kadomatsu   31 The courts and public space: France, the UK and the US in historical perspective  Thomas Perroud

420 435

446

462

478 497

513

PART V  ADMINISTRATIVE LAW AND THE BOUNDARIES OF THE STATE PART A  PUBLIC AND PRIVATE 32 Three questions of privatization Daphne Barak-Erez

533

33 Contracting out and ‘public values’: a theoretical and comparative approach  Jean-Bernard Auby

552

34 Organizational structure and culture in an era of privatization: the case of United States military and security contractors  Laura A. Dickinson 35 Transnational non-state regulation and domestic administrative law Victor V. Ramraj

566 582

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viii  Comparative administrative law PART B ADMINISTRATIVE LAW BEYOND THE STATE: THE CASE OF THE EU 36 A framework for historical comparison of control of national, supranational and transnational public power Peter Cane

601

37 EU Agencies 2.0: the new constitution of supranational administration beyond the EU Commission Johannes Saurer 

619

38 Administrative discretion in the EU: comparative perspectives Joana Mendes 39 Administrative law reform in the European Union: the ReNEUAL Project and its basis in comparative legal studies Herwig C.H. Hofmann and Jens-Peter Schneider

632

650

40 The constitutional basis of EU administrative law Matthias Ruffert

667

41 What’s in a label? The EU as ‘administrative’ and ‘constitutional’ Peter L. Lindseth

680

Index699

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Contributors EDITORS Susan Rose-Ackerman is Henry R. Luce Professor of Jurisprudence (Law and Political Science), Yale University. She has published widely in the fields of law, economics, public policy, and corruption. She is the author, most recently, of Corruption and Government Causes, Consequences and Reform (2d edition with Bonnie Palifka, 2016); Due Process of Lawmaking: The United States, South Africa, Germany, and the European Union (with Stefanie Egidy and James Fowkes, 2015); and From Elections to Democracy: Building Accountable Government in Hungary and Poland (2005). She holds a Ph.D. in economics from Yale University and has held fellowships at the Wissenschaftskolleg zu Berlin, at the Center for Advanced Study in the Behavioral Sciences in Palo Alto, at Collegium Budapest, and from the Guggenheim Foundation and the Fulbright Commission. Her research interests include comparative regulatory law and policy, the political economy of corruption, public policy and administrative law, and law and economics. Peter L. Lindseth is the Olimpiad S. Ioffe Professor of International and Comparative Law at the University of Connecticut School of Law, where he is also Director of International Programs and Co-Director in the Professional Certificate Program in Corporate and Regulatory Compliance. Prof. Lindseth is also a regular Visiting Professor in the School of Law at Queen Mary University of London as well as a Research Associate at the Centre for International Studies at the University of Oxford. He has held fellowships at the American Academy in Berlin, the European University Institute, the French Conseil d’Etat, the Max Planck Institute for European Legal History, Princeton University (Law and Public Affairs), and New York University School of Law. His research and teaching focus on administrative law, compliance, European integration, and legal history and theory. His books include: Power and Legitimacy: Reconciling Europe and the Nation-State (2010); Transatlantic Regulatory Cooperation: Legal Problems and Political Prospects ­(co-editor, 2000); and Digital Democracy in a Globalized World (coeditor, Edward Elgar forthcoming). His articles have appeared in the Columbia Law Review, Contemporary European History, the European Law Journal, and the Yale Law Journal, among other publications. He holds a B.A. and J.D. from Cornell and a Ph.D. in European history from Columbia.  Blake Emerson is a Research Fellow at the Administrative Conference of the United States and will be joining the law faculty of the University of California, Los Angeles in 2018. He holds a J.D. from Yale Law School, and a Ph.D. in Political Science from Yale University. His research focuses on the intellectual history of the American administrative state. His scholarship has appeared in the Review of Politics, Buffalo Law Review, Quaderni fiortenti, Philosophy & Social Criticism, and the Heidelberg Journal of International Law. His book manuscript on  the political and legal theory of the American Progressives  is currently under contract with Oxford University Press. ix Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 9

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x  Comparative administrative law

AUTHORS Bruce Ackerman is Sterling Professor of Law and Political Science at Yale, and the author of 18 books in political philosophy, constitutional law, and public policy. Professor Ackerman is a member of the American Law Institute and the American Academy of Arts and Sciences. The Stakeholder Society (with Anne Alstott) helped inspire Tony Blair’s introduction of child investment accounts in the United Kingdom. His proposals for dealing with terrorist threats in Before the Next Attack (2006) served as a basis for the reform of the French constitution in 2008. The Decline and Fall of the American Republic (2010) emphasizes the dangers of presidential unilateralism at home and abroad. His most recent book completes the We the People trilogy with a study of The Civil Rights Revolution. He is currently writing a book on comparative ­constitutional law, dealing with the rise of world constitutionalism in the twentieth century. Alberto Alemanno is Jean Monnet Professor of Law at Ecole des Hautes Etudes Commerciales (HEC) Paris and Global Clinical Professor at New York University School of Law. He studies the role of evidence and public input in domestic and supranational policymaking, especially the law of risk regulation in both the EU and the WTO. He has explored the use of scientific evidence and behavioral research in regulatory decisionmaking and in judicial review. He studies the legal implications of behavioral research across policy areas. He regularly provides advice to NGOs and governments as well as to international organizations. Alemanno is a graduate of the College of Europe and Harvard Law School; he holds a Ph.D. in International Law and Economics from Bocconi University. He is the founder and editor of the European Journal of Risk Regulation and the co-founder of TheGoodLobby, an organization that connects people with expertise to civil society organizations. He was appointed Young Global Leader by the World Economic Forum in 2015. Michael Asimow is Visiting Professor, Stanford Law School, and Professor of Law Emeritus, UCLA Law School. Asimow is co-author of State and Federal Administrative Law (4th ed. 2014 with Ron Levin) and California Administrative Law (2014). He is currently an ACUS consultant studying federal administrative adjudication outside the Administrative Procedure Act. He is a former chair of the ABA’s Section on Administrative Law & Regulatory Practice. Asimow’s recent articles on comparative administrative law include Hired Guns and Ministers of Justice: The Role of Government Attorneys in the US and Israel, 49 Israel Law Review 3 (2016) (with Yoav Dotan); Open and Closed Judicial Review of Agency Action: The Conflicting US and Israeli Approaches, 64 AJCL 521 (2016) (with Dotan); Five Models of Administrative Adjudication, 63 AJCL 3 (2015).; The Many Faces of Administrative Adjudication in the European Union, 61 Adm. L. Rev. 131 (2009) (with Lisl Dunlop). Jean-Bernard Auby is Professor of Public Law at Sciences Po Law School, Paris, where he holds the Chair for Changes in Governance and Public Law (Mutations de l’Action Publique et du Droit Public). He was formerly Deputy Director of the Oxford Institute of European and Comparative Law. His books include Droit de l’urbanisme et la construction (10th ed. 2015), Droit des collectivités locales (5th ed. 2015), Droit de la fonction

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Contributors  xi publique (5th ed. 2009), and Droit de la Ville: Du fonctionnement juridique des villes au droit à la Ville (2nd ed. 2016). He is a member of the advisory boards of numerous journals, including European Public Law; International and Comparative Law Quarterly; and Rivista Italiana di Diritto Pubblico Comunitario. Daphne Barak-Erez is a Justice of the Supreme Court of Israel. Justice Barak-Erez was Dean of the Faculty of Law, Tel-Aviv University and the Stewart and Judy Colton Professor in Law and Security before her appointment to the court. She served as Director of the Minerva Center for Human Rights and Director of the Cegla Center for Interdisciplinary Research of Law. She holds a J.S.D., LL.M., and LL.B. from the Tel Aviv Faculty of Law. Justice Barak-Erez has been a visiting professor at various universities, including the University of Toronto, Columbia Law School and Stanford Law School. She has chaired the Israeli Association of Public Law and was President of the Israeli Law and Society Association. She is the author and editor of several books and of many articles in Israel, England, Canada and the United States. Javier Barnes is Professor of Administrative Law at the University of Huelva, Spain. His research focuses on comparative and European administrative law. He holds a Ph.D. from Seville University and has been a visiting professor in Germany, Italy, the United States and Latin America. He is founder and co-director of the international research project on new administrative law (www.globallawpress.org). Amongst his most influential books are Administrative Procedure in Comparative View, Judicial Review of Administration in Comparative Law, Proportionality Principle in Europe and in Western Countries, Challenges and Developments in Administrative Law (2012); and Third Generation of Administrative Procedures (2014). He advises European institutions as well as national governments on administrative law issues, most recently in the drafting of administrative procedure acts in several Latin-American countries. He has won the international research prize Alexander von Humboldt (2016). Gabriel Bocksang Hola is Professor in the School of Law of the Pontifical Catholic University of Chile (Pontificia Universidad Católica de Chile), where he obtained his undergraduate degree of Licenciatura en Derecho. Later on, he received both his LL.M and Ph.D. degrees from the University of Paris 1 (Panthéon-Sorbonne). His doctoral thesis was awarded the prize of the Centre Français de Droit Comparé (2010–11) and was published in France (L’inexistence juridique des actes administratifs, 2013). He is the author of two other books, El procedimiento administrativo chileno (2006), and El nacimiento del derecho administrativo patrio de Chile (1810–1860) (2015). He is also ­co-editor of three books, and author of several academic articles. His main research interests lie in the theory and history of administrative law, comparative public law, legal voidness, administrative procedure and judicial review. Peter Cane is Senior Research Fellow at Christ’s College Cambridge, Yorke Distinguished Visiting Fellow in the Law Faculty at the University of Cambridge, and Emeritus Distinguished Professor of Law at the Australian National University. He is a Corresponding Fellow of the British Academy and a Fellow of the Academy of Social Sciences in Australia. His most recent book is Controlling Administrative Power: An Historical Comparison (2016).

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xii  Comparative administrative law Paul Craig is Professor of English Law at St John’s College, Oxford. He teaches and writes on constitutional law, administrative law, comparative public law and EU law. His most recent book is UK, EU and Global Administrative Law: Foundations and Challenges (2015). He is the alternate UK member on the Venice Commission for Law and Democracy. Dominique Custos holds a Ph.D. an LL.M. in public law, and a Master’s degree in Legal Anthropology, Paris1, Panthéon-Sorbonne, France. Professor Custos is Professor agrégée (Full professor) of public law at the University of Caen, France. She is the director of the Research Center on Fundamental Rights and Legal Change. She also teaches on the EuroAmerican campus of Sciences Po Paris. Her previous appointments include a research and teaching fellowship at the Sorbonne, an associate professorship at the University of French Antilles and Guyana and a distinguished professorship at Loyola University New Orleans, USA. She also served as a Fulbright visiting scholar at Columbia University, USA. Reflective of her transatlantic academic experience, her comparative administrative scholarship focuses on the American, French and European models. She has been selected to host a new American administrative law chronicle in the Revue Française de Droit Administratif. Marco D’Alberti is Full Professor of Administrative Law at the Law School of ‘Sapienza’ University in Rome, where he is also Senior Research Fellow at Sapienza School for Advanced Studies and Director of the postgraduate Master ‘Global Regulation of Markets’. He has been Visiting Scholar at the Universities of Cambridge (1980–81), Harvard (1982) and Yale (1987–88) and Visiting Professor at the University of Paris II – Panthéon-Assas (1990 and 2005) and at Columbia University School of Law (1995 and 2016). He is a member of the International Academy of Comparative Law, of the Board of Directors of the European Public Law Organization, and of the Council of the International Society of Public Law. From 1997 to 2004 he was Commissioner of the Italian Competition Authority. His books, essays and articles are mainly concerned with administrative law, comparative law and public regulation of markets. Laura A. Dickinson is the Oswald Symister Colclough Research Professor and Professor of Law at George Washington University. Her work focuses on human rights, national security, foreign affairs privatization, and qualitative empirical approaches to inter­ national law. Her prizewinning book, Outsourcing War and Peace (2011), examines the increasing privatization of military, security, and foreign aid functions of government, and considers the impact of this trend on core public values and outlines mechanisms for protecting these values. Dickinson is serving as special counsel to the general counsel at the U.S. Department of Defense. Previously, she was a senior policy adviser to Harold Hongju Koh, Assistant Secretary of State for Democracy, Human Rights, and Labor at the U.S. Department of State. She  has been a Future of War Fellow with the New America Foundation’s International Security Program, and is currently the Co-Chair of the Interest Group on International Law and Technology within the American Society of International Law, and a board member of the Journal of National Security Law and Policy. Catherine Donnelly, LL.B. (Dubl), B.C.L. (Oxon), LL.M. (Harv), D.Phil. (Oxon), B.L. is a practising barrister and an Associate Professor and Fellow of Trinity College, Dublin. She is also a member of Blackstone Chambers in London. As well as practising before

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Contributors  xiii the Irish courts, she appears and acts in cases before the courts of England and Wales, Northern Ireland, the Court of Justice of the European Union and the European Court of Human Rights. She is an editor of De Smith’s Judicial Review (2007, 2009, 2013, 2014, 2015 and 2016). She is also author of Delegation of Governmental Power to Private Parties: A Comparative Perspective (2007) and has published widely in European Union law, human rights law, and public law. She was formerly a Fellow and College and University Lecturer at Wadham College, Oxford, and an Attorney at Law in the litigation department of Davis, Polk and Wardwell, New York. Yoav Dotan is a Professor and former Dean at the Faculty of Law at the Hebrew University, Jerusalem. He received his LL.B. at the Hebrew University Jerusalem, LL.M. from the University of California at Berkeley and LL.D. from the Hebrew University. He did his post-doctoral studies at Wolfson College Oxford. His work focuses on public law, administrative and constitutional law, judicial review, privatization and regulation. He was a visiting professor at Columbia Law School, Fordham Law School, University of Miami Law School and served as a non-residential fellow at Edmond J. Safra Research Lab at Harvard University (2012–13). His recent book Lawyering for the Rule of Law: Government Lawyers and the Rise of Judicial Power in Israel was published in 2014. He has also published in the Law & Society Review; Oxford Journal of Legal Studies; Public Law; Administrative Law Review; and American Journal of Comparative Law. Tom Ginsburg is the Deputy Dean and Leo Spitz Professor of International Law at the University of Chicago, where he also holds an appointment in the Political Science Department. He holds B.A., J.D. and Ph.D. degrees from the University of California at Berkeley. He currently co-directs the Comparative Constitutions Project, an NSFfunded data set cataloging the world’s constitutions since 1789. His books include Judicial Reputation: A Comparative Theory (2015) (with Nuno Garoupa); The Endurance of National Constitutions (2009) (with Zachary Elkins and James Melton), which won the best book award from Comparative Democratization Section of American Political Science Association; and Judicial Review in New Democracies (2003). He is a member of the American Academy of Arts and Sciences. He currently serves as a senior advisor on Constitution Building to International IDEA. Daniel Halberstam is Associate Dean for Faculty and Research, and Eric Stein Collegiate Professor of Law at the University of Michigan Law School. An expert on constitutional law and federalism, and one of the principal architects of the theory of constitutional pluralism, Professor Halberstam writes more broadly on comparative public law and legal theory. He gave the General Course on the European Union at the European University Institute, Florence, and teaches regularly throughout Europe. He was Fellow at the Wissenschaftskolleg (Institute for Advanced Study) in Berlin, and subsequently joined the Institute’s academic advisory board. Halberstam earned his B.A. summa cum laude in mathematics and psychology from Columbia College, and a J.D. from Yale Law School. He also served as clerk for U.S. Supreme Court Justice David H. Souter, judicial fellow for Judge Peter Jann at the European Court of Justice, and in the Clinton Administration’s Office of Legal Counsel. Herwig C.H. Hofmann is Professor of European and Transnational Public Law at the University of Luxembourg; he specializes in European and transnational constitutional,

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xiv  Comparative administrative law administrative, and regulatory law. A graduate of the Universities of Hamburg and Oxford, he formerly was lecturer in law at Trinity College in Dublin, and has been visiting professor and scholar at various universities including Sciences Po in Paris, Columbia Law School, the University of San Francisco Law School, and Chuo University in Tokyo. He is co-founder and coordinator of the Research Network on European Administrative Law (ReNEUAL). Hofmann advises European Institutions and national governments, most recently the Legal Affairs Committee of the European Parliament on a draft EU administrative procedure regulation and, on the drafting of the new French code on administrative procedure. Amongst his influential publications is Administrative Law and Policy of the European Union (2011), co-authored with A. Türk and G. Rowe. Cheng-Yi Huang is an Associate Research Professor in the Institutum Iurisprudentiae, Academia Sinica, Taiwan. He holds a J.S.D. from the University of Chicago Law School. His research focuses on comparative public law, with a particular interest in the new insights that developing democracies can have for democratic theory. He has founded the project of Comparative Administrative Law in Asia (http://cala.iias.sinica.edu. tw) since 2012. His articles appear in Law & Social Inquiry and Comparative Law and Regulation (Edward Elgar). He won the Honorable Mention to the LSA Dissertation Award in 2010. He currently serves as the chairperson of Taiwan Association for Truth and Reconciliation, an NGO advocating transitional justice in Taiwan. Narufumi Kadomatsu is a Professor of Administrative Law at Graduate School of Law, Kobe University. After graduating from the University of Tokyo in 1986, he studied in the Master’s and Doctoral Program at Graduate Schools for Law and Politics. He also worked as a Research Associate at the Institute of Social Science. He was appointed as Associate Professor at Kyushu University in 1996 and transferred to Kobe University as a Professor in 2005. He also studied one year at the University of Hamburg (1998–99) and taught Japanese Law at the University of Munich for two semesters (2003–04). Kriszta Kovács is Associate Professor of Comparative Constitutional Law at the UNESCO Chair on Human Rights and Peace at ELTE University Faculty of Social Sciences, Budapest. She is also a former Vice Dean at the Faculty, a former Senior Adviser of the Hungarian Constitutional Court, and former Co-President of the Joint Council on Constitutional Justice (Venice Commission, Council of Europe). She has held fellowships at the Human Rights Institute of the Columbia Law School, New York, at the University of Trento, Italy, at the University of Birmingham, and from the UK Foreign Office and the Zeit Stiftung. She is the author of Towards Equality. From the Ban on Non-discrimination to Affirmative Action (2012) and the co-author of Constitution for a Disunited Nation. Hungary’s 2011 Fundamental Law (2011). Her recent book chapters include ‘Changing Constitutional Identity via Amendment’ (in Constitutional Acceleration within the European Union and Beyond (ed. Paul Blokker, 2017). M. Elizabeth Magill is Richard E. Lang Professor of Law and Dean of Stanford Law School. She is an expert in administrative law, constitutional law, and food and drug law. Her scholarly contributions are published in leading law reviews and have won several awards. She is a fellow of the American Academy of Arts & Sciences and is a member of the American Law Institute. Dean Magill was on the law faculty at the University of Virginia School of Law for 15 years and held appointments as visiting professor at

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Contributors  xv Harvard Law School and as Thomas Jefferson Visiting Fellow at Downing College, Cambridge University. She clerked for Judge J. Harvie Wilkinson III of the U.S. Court of Appeals for the Fourth Circuit and for Associate Justice Ruth Bader Ginsburg of the U.S. Supreme Court. Dean Magill holds a B.A. in History from Yale University and a J.D. from the University of Virginia School of Law. Jerry Mashaw is Sterling Professor of Law Emeritus and Professorial Lecturer at Yale University, where he teaches courses on administrative law, social welfare policy, regulation, legislation, and the design of public institutions. His award-winning books include Bureaucratic Justice (1983), The Struggle for Auto Safety (with David Harfst 1990), Greed, Chaos, and Governance: Using Public Choice to Improve Public Law (1997), and Creating the Administrative Constitution (2013). He is a frequent contributor to legal and public policy journals and to newspapers and news magazines. Professor Mashaw is a founding member and past President of the National Academy of Social Insurance; a Fellow of the National Academy of Arts and Sciences, and was founding co-editor (with O.E. Williamson) of the Journal of Law, Economics and Organization. Jean Massot retired as a member of the French Conseil d’Etat in 2004, where his fourdecade career concluded as the President of the Section des Finances. Between 2005 and 2014, former President Massot was a member of France’s independent data protection agency, the Commission Nationale de l’Informatique et des Libertés (CNIL). He is also the author of numerous works on French administrative and constitutional law as well as legal history and politics. Among his several books are Informatique et Libertés (2015) ­(co-editor with Anne Debet and Nathalie Metallinos), Chef de l’état et chef de gouvernement (2008), Le Conseil d’Etat, 1799–1999 (1999) (co-editor with Thierry Girardot), and Alternance et cohabitation sous la Vème République (1997). He is a graduate of the Institut d’études politiques (Sciences-Po, Paris) and the Ecole National d’Administration (ENA), and he also holds a doctorate from the law faculty of the University of Paris. Jud Mathews is an Associate Professor at Penn State Law and an Affiliate Professor in Penn State’s School of International Affairs. At Penn State, he teaches courses in administrative law, civil procedure, constitutional interpretation, and state and local government law. His scholarship brings a comparative and interdisciplinary approach to questions of public law. His book, Extending Rights’ Reach: Constitutions, Private Litigation, and Judicial Power in Germany, the United States, and Canada, is forthcoming. Prior to joining Penn State Law, Professor Mathews was a visiting assistant professor at the University of Illinois College of Law. After law school, he worked as a law clerk for Judge Guido Calabresi on the U.S. Court of Appeals for the Second Circuit.​He holds an A.B. from Princeton, and a J.D. and Ph.D. in political science from Yale. Joana Mendes is Professor of Comparative Administrative Law at the University of Luxembourg. She has a doctoral degree from the European University Institute (Italy), awarded in 2009. Before joining the University of Luxembourg, she worked at the University of Amsterdam (2009–16), where she was Associate Professor at the Department of International and EU Law, senior researcher at the Amsterdam Centre for European Law and Governance and Ph.D. Dean at the Faculty of Law. She has been a Fulbright Visiting Scholar at Yale Law School (2014). As a member of the Steering Committee of ReNEUAL, she has participated in the elaboration of the Model Rules on

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xvi  Comparative administrative law EU Administrative Procedure. Her recent research focuses on administrative discretion in the EU (Individual research grant (VENI), awarded by The Netherlands Organisation for Scientific Research (NWO), between 2013 and 2016); on international regulatory ­cooperation, in particular in the framework of mega-regional agreements; and on the allocation of authority in EU and international law (in collaboration with Dr. Ingo Venzke). Her publications include Participation in EU Rulemaking. A Rights-based Approach (2011) and articles published in the Common Market Law Review; the European Law Journal; and the International Journal of Constitutional Law. Mariana Mota Prado is Associate Professor and Associate Dean (Graduate Studies) at the Faculty of Law, University of Toronto. A Brazilian national, she obtained her law degree (LL.B.) from the University of Sao Paulo, and her master (LL.M.) and doctorate (J.S.D.) from Yale Law School. During the 2012–13 academic year, she was a visiting researcher at MIT’s Political Science Department. She has taught courses at Centre for Transnational Legal Studies in London, Direito Rio – Getulio Vargas Foundation Law School in Brazil, ITAM Law School in Mexico, Los Andes Law School in Colombia, and University of Puerto Rico School of Law. Her scholarship focuses on law and development, regulated industries, and comparative law. Giulio Napolitano is Professor of Administrative Law and Comparative Administrative Law at the University of Roma Tre, Department of Law. He was visiting and program affiliate scholar at the Max-Planck-Institut of Heidelberg and at the New York University School of Law. He is a member of the Inaugural Council of the International Society of Public Law (ICON-S) and of the Board of Editors of the European Public Law Review. He has published extensively in the fields of theoretical foundations of administrative law, comparative administrative law, regulation and antitrust, economic analysis of public law, and global governance. From 2006 to 2008, he served as legal counsel in the office of the Prime Minister. From 2009 to 2012 he chaired the supervisory board on equality of access to the telecommunication network.  Daniel R. Ortiz has taught since 1985 at the University of Virginia School of Law, where he is the Michael J. and Jane R. Horvitz Distinguished Professor of Law and Director of the Supreme Court Litigation Clinic. His teaching and research interests focus on election law, administrative law, and legal theory. He has served as council member of the ABA’s Section on Administrative Law and Regulatory Practice, as co-chair of its scholarship and election law committees, and as legal director of the National Commission on Federal Election Reform, chaired by Presidents Ford and Carter after the 2000 election. He has written many articles and book chapters in these areas and has litigated widely, including before the United States Supreme Court. His web page can be found at http://www.law. virginia.edu/lawweb/Faculty.nsf/FHPbI/1196477. Thomas Perroud is professor of public law at Panthéon-Assas University (Paris II). After graduating from HEC and SciencesPo he earned a Ph.D. from both the Sorbonne and Warwick Law Schools. He specializes in comparative administrative law, and especially regulation and policy-making.  Athanasios Psygkas is lecturer in law at the University of Bristol in the UK. His research interests include comparative public law, regulation, and global governance.

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Contributors  xvii His forthcoming book, entitled From the ‘Democratic Deficit’ to a ‘Democratic Surplus’: Constructing Administrative Democracy in Europe examines the impact of EU law on the adoption of participatory regulatory processes in the Member States. Akis received J.S.D. and LL.M. degrees from Yale Law School, where he was a Fulbright scholar, and an LL.B. and LL.M. in Public Law and Political Science from the Aristotle University of Thessaloniki (Greece). He has held fellowships at the European University Institute in Florence and the Institut d’Etudes Politiques (Sciences Po) in Paris. He was also an Oscar M. Ruebhausen visiting research fellow at Yale Law School and has been managing the Comparative Administrative Law Blog since 2009. Victor V. Ramraj is a Professor of Law at the University of Victoria in Victoria, British Columbia, Canada, where he also holds Chair in Asia-Pacific Legal Relations at the Centre for Asia-Pacific Initiatives (CAPI). He returned to Canada in 2014 after 16 years at the National University of Singapore and two secondments at the Centre for Transnational Legal Studies (CTLS) in London. He has qualifications in law (LL.B., Toronto; LL.M., Queen’s University Belfast) and philosophy (B.A., McGill; MA, Ph.D, Toronto) and has served as a judicial law clerk at the Federal Court of Appeal in Ottawa and as a litigation lawyer in Toronto. Dr. Ramraj has edited/co-edited many books including Emergencies and the Limits of Legality (2009) and Emergency Powers in Asia: Exploring the Limits of Legality (2010) and his research has been published in journals around the world. He is currently working on a book on transnational regulation and public law. Dorit Rubinstein Reiss is a Professor of Law at UC Hastings College of the Law. She has an LL.B. from the Hebrew University in Jerusalem and Ph.D. from the Jurisprudence and Social Policy program in Berkeley. She has written about comparative regulation as well as U.S. administrative law. Her current research focus is on issues related to vaccine law and policy.  Matthias Ruffert is Professor of Public Law and European Law at the Law Faculty of the Humboldt University Berlin. From 2002–16 he was Professor of Public Law, European Law and Public International Law at the Friedrich-Schiller-University Jena, Germany. He has been a Visiting Professor at the Université de Paris XI, Sceaux, and the Université Toulouse 1 Capitole. Between 2011–14 he was the Jean Monnet Professor, and from 2013–16 the Academic Co-ordinator of a Jean Monnet Centre of Excellence; he has served as a Judge at the Administrative Court of Appeal of Thuringia, as a Member of the Thuringian Constitutional Court; and as a Member of the Review Board ‘Jurisprudence’ of the Deutsche Forschungsgemeinschaft/German National Science Foundation. He completed his legal studies in Passau and Trier (both Germany) and London (King’s College). He has written widely on administrative law, especially in the Member States of the European Union. Johannes Saurer is Professor at the Faculty of Law at the University of Tuebingen, where he holds the Chair for Public Law, Environmental Law, Law of Infrastructure and Comparative Law. He is a graduate of the University of Tuebingen, the University of Bayreuth and the Yale Law School. Prior to his current position he has been a Professor for Public Law at the University of Bielefeld. His publications include articles on German and European constitutional law and administrative law, environmental law

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xviii  Comparative administrative law and ­comparative law and the books Die Funktionen der Rechtsverordnung (2005) and Der Einzelne im europäischen Verwaltungsrecht (2014). Kim Lane Scheppele is the Laurance S. Rockefeller Professor of Sociology and International Affairs in the Woodrow Wilson School and the University Center for Human Values at Princeton. From 2005 to 2015, she was Director of the Program in Law and Public Affairs at Princeton, after 10 years on the faculty of the University of Pennsylvania Law School. Scheppele’s work focuses on the intersection of constitutional and international law, particularly in constitutional systems under stress. After 1989, Scheppele studied the emergence of constitutional law in Hungary and Russia. After 9/11, she researched the effects of the ‘war on terror’ on constitutional protections around the world. She is a member of the International Academy of Comparative Law and received the Law and Society Association’s Kalven Prize for influential scholarship. She was the founding ­director of the gender program at Central European University, Budapest, and has taught in the law schools at Michigan, Yale, Erasmus/Rotterdam, Humboldt/Berlin and (next year) Harvard. Jens-Peter Schneider is a Professor of Public Law and Director of the Department for Public Law, European Information and Infrastructure Law at the Institute of Media and Information Law, University of Freiburg. His expertise includes German and EU public law, comparative administrative law, information law, infrastructure law, public economic and environmental law, and administrative sciences. Schneider is co-founder and one of the coordinators of the Research Network on EU Administrative Law (ReNEUAL). He serves as legal adviser to the rector of his university and as a research member of the Centre for Security and Society at the University of Freiburg. He previously has held positions as visiting research fellow or guest professor at Brasenose College, the University of Oxford, Andrássy University Budapest, Columbia Law School (New York), and the University of São Paulo (Brasilia). Martin Shapiro is the James W. and Isabel Coffroth Professor Law, emeritus, at the University of California, Berkeley and was formerly Professor of Government at Harvard. He has taught political science on a number of University of California campuses and held numerous visiting appointments in law or political science at U.S. and overseas universities. He teaches and writes on American and comparative constitutional and administrative law and more generally about courts and law and politics. Bernardo Sordi teaches history of law at the School of Law of the University of Florence, where he is a member of the editorial board of the review Quaderni fiorentini. His research interests concern constitutional and administrative history in the modern and contempor­ ary age. He is the author of over 100 publications including: Giustizia e amministrazione nell’Italia liberale (1985) on the origins of the Italian administrative law in the nineteenth century; Tra Weimar e Vienna (1987) on the German and Austrian administrative law during the interwar period; L’amministrazione illuminata (1991) on the administrative reforms in the Italian Enlightenment. He published with Luca Mannori Storia del diritto amministrativo (2013), a general profile of the modern history of administrative law in Europe. He has recently co-edited Il contributo italiano alla storia del pensiero. Diritto (2012; 2015) (with P. Costa, M. Fioravanti and P. Cappellini), a collective research on the history of the Italian scientia iuris from the Medieval Age to the twentieth century.

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Contributors  xix Lorne Sossin B.A. (McGill), M.A. (Exeter), Ph.D. (Toronto), LL.B. (Osgoode), LL.M., J.S.D (Columbia), of the Bar of Ontario, Professor and Dean of Osgoode Hall Law School, at York University. Professor Sossin has been a Law Professor at the University of Toronto (2002–10). In 2012 and 2013, Canadian Lawyer named him one of the 25 Most Influential Lawyers in Canada, and in 2012 he received the David Mundell Medal for excellence in Legal Writing. Dean Sossin was a law clerk to former Chief Justice Antonio Lamer of the Supreme Court of Canada. He holds doctorates from the University of Toronto in Political Science and from Columbia University in Law. Dean Sossin has published widely including Administrative Law in Context 2nd ed. (2013) (co-edited with Colleen Flood); Middle Income Access to Justice (2012) (co-edited with Tony Duggan and Michael Trebilcock); and Boundaries of Judicial Review: The Law of Justiciability in Canada 2nd ed. (2012). Peter L. Strauss, the Betts Professor of Law Emeritus at Columbia Law School, has taught Administrative Law there since 1971 (on leave 1975–77 to be General Counsel, US Nuclear Regulatory Commission). His published works include Administrative Justice in the United States (3rd ed. 2016); Gellhorn’s & Byse’s Administrative Law: Cases and Comments (most recently, 2011, with Rakoff, Farina and Metzger); Legal Methods: Understanding and Using Cases and Statutes (most recently 2008); Administrative Law Stories (ed. 2006); and numerous law review articles, generally focusing on rulemaking, separation of powers, or statutory interpretation. Chair of the ABA Section of Administrative Law and Regulatory Practice in 1992–93, he earlier had won its third annual award for distinguished scholarship. His essay ‘Overseer or ‘The Decider’? The President in Administrative Law’ received the American Constitution Society’s first Richard Cudahy prize for scholarship in administrative law. He is a member of the American Law Institute and the National Academy of Arts and Sciences. Arun Kumar Thiruvengadam is an Associate Professor at the School of Policy and Governance, Azim Premji University, Bengaluru, India. He holds degrees in law from the National Law School (B.A., LL.B. 1995; LL.M. 2001) and New York University School of Law (LL.M. 2002; J.S.D. 2007). He worked as a law clerk at the Supreme Court of India, and has practiced before the High Courts of Delhi and Madras and the Supreme Court of India. Between 2005 and 15, he was based at the Faculty of Law, National University of Singapore, and has taught in a visiting capacity at several other institutions. His teaching and research has focused on comparative constitutional law, Indian constitutional and administrative law, law and development, law and politics in South Asia, and legal theory. His publications include two co-edited volumes on Comparative Constitutionalism in South Asia (2012) and Emergency Powers in Asia (2010). Andreas Voßkuhle is President of the German Federal Constitutional Court, Chairperson of the Second Senate of the Constitutional Court and Director of the Institute for Staatswissenschaft and Philosophy of Law at the Albert-Ludwigs-University Freiburg. Since 2007, he has also been a member of the Social Sciences Class of the BerlinBrandenburg Academy of Sciences and Humanities. He studied law at Bayreuth University and the Ludwig-Maximilians-University Munich, completed both juridical state examinations, and earned his Dr. jur. at the University of Munich. In 1998, he completed his habilitation (professorial dissertation) on the principle of compensation.

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xx  Comparative administrative law Public law, administrative law and legal theory are the main subjects of his current research activities. In 2006–07, Voßkuhle was a fellow at the Wissenschaftskolleg zu Berlin; in 2007, he was elected as Rector of the Albert-Ludwigs-University Freiburg and in 2008 as Vice-President of the Federal Constitutional Court, Chairperson of the Second Senate. Since March 2010 he has been the President of the Federal Constitutional Court. Jonathan B. Wiener is Perkins Professor of Law, and of Environmental Policy and Public Policy, at Duke University, where he co-directs the ‘Rethinking Regulation’ program. His publications include Risk vs. Risk (1995) (with Graham), Reconstructing Climate Policy (2003) (with Stewart), The Reality of Precaution: Comparing Risk Regulation in the US and Europe (2011) (with Rogers, Hammitt and Sand), and Policy Shock: Recalibrating Risk and Regulation after Oil Spills, Nuclear Accidents and Financial Crises (forthcoming 2017) (with Balleisen, Bennear and Krawiec). He is a University Fellow at RFF. In 2008 he was president of the Society for Risk Analysis (SRA). Before coming to Duke in 1994, he served at the U.S. Department of Justice, Environment and Natural Resources Division (DOJ/ENRD); the White House Office of Science and Technology Policy (OSTP); and the White House Council of Economic Advisers (CEA); there he helped negotiate the Framework Convention on Climate Change (FCCC) (1990–92), and helped draft Executive Order 12866 on regulatory review (1993). He was a law clerk to federal judges Stephen G. Breyer and Jack B. Weinstein. He received his J.D. (1987) and A.B. (1984, economics) from Harvard University. Thomas Wischmeyer is a postdoctoral researcher at the Institute for Staatswissenschaft and Legal Philosophy at Freiburg University. He clerked at the German Federal Constitutional Court (Bundesverfassungsgericht) before starting his academic career at Freiburg University. He spent the spring semester 2012 at Yale Law School as a visiting doctoral researcher and received his Ph.D. in legal and constitutional theory in 2014. In 2016–17, Thomas Wischmeyer is an Emile Noël Fellow at NYU’s Jean Monnet Center and the DAAD Visiting Fellow at NYU. He is the author of three books, including, The Costs of Rights: The Fiscal Dimension of Fundamental Rights (2015) and The Centrist Constitution (2016, co-authored with Andreas Voßkuhle). He has published articles on a wide variety of topics concerning European and German constitutional and administrative law, constitutional and legal theory, and information law. His current research focuses on the role of law in the information society and in particular on the emerging paradigm of ‘information security.’  Jiunn-rong Yeh is University Chair Professor at National Taiwan University where he teaches constitutional law, administrative law and environmental law. He is the author and editor of a series of books that analyzes constitutionalism, courts and democratic transition in Asian context and beyond. His recent publications in book form include The Constitution of Taiwan: A Contextual Analysis; The Functional Transformation of Courts: Taiwan and Korea in Comparison (ed.); Asian Courts in Context; and Constitutionalism in Asia: Cases and Materials (with coauthors). His academic work has been fuelled in part by substantial involvement in many constitutional, legislative and regulatory issues in Taiwan and in the region. He held a ministerial position in Taiwan’s cabinet in 2002– 06, overseeing government reform and sustainable development via inter-ministerial

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Contributors  xxi c­ oordination. In 2005, he was elected the Secretary-General of the National Assembly that approved the constitutional revision proposals by Legislative Yuan. Since May 2016, he has been on loan to the government as the Minister of the Interior in Taiwan’s government while holding his university chair position.

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Acknowledgements This second edition of Comparative Administrative Law builds on the first edition published in 2010. The editors acknowledge the generous support of the Oscar M. Ruebhausen Fund at Yale Law School and the University of Connecticut Law School, which both supported the book and a meeting of the authors in 2016. Most chapters are either new additions or extensive revisions of chapters from the first edition. Six chapters are reprinted from the first edition, and a few authors decided not to reprint or update their earlier chapters. The reprinted chapters are by Bruce Ackerman, Jean-Bernard Auby, Daphne Barak-Erez, Tom Ginsberg, Daniel Halberstam, and Dorit Rubinstein Reiss. It would have been impossible to publish a book of this magnitude and ambition without the extensive assistance of others. We are especially grateful to Cathy Orcutt for managing the logistics of both the gathering of the authors and the edited book with her usual competence and aplomb. We also want to thank the contributors for keeping to our deadlines, responding to our comments, and providing us with a collection of diverse and fascinating approaches to the topic. Susan Rose-Ackerman Peter L. Lindseth Blake Emerson

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Introduction

Susan Rose-Ackerman, Peter L. Lindseth, and Blake Emerson

Administrative law exists at the interface between the state and society—between civil servants and state institutions, on the one hand, and citizens, business firms, organized groups, and non-citizens, on the other. Civil service law, bureaucratic organization charts, and internal rules provide an essential background. But our emphasis is on the law’s role in framing the way that individuals and organizations test, challenge, and fortify the legitim­ acy of the modern state outside the electoral process. There are two broad tasks—first, upholding individual rights in ways that protect them against an overreaching state, and second, providing external checks and constructive input that enhance the democratic accountability and competence of the administration. The contributors approach these normative questions from a variety of disciplinary, doctrinal, and jurisdictional perspectives. All of them, however, share a general concern with administrative law as a central institution of modern government. We build on work in economics and political science that uses the term ‘institution’ to refer to a set of formal or informal binding rules (see, for example, North 1990, 3–5; March and Olsen 1989, 1998, 948). The institutions of administrative law, then, include not only the positive legal rules but also the wider political, cultural, technological, and economic norms that impinge upon and shape legal doctrine. Administrative law, in this inclusive sense, is particularly amenable to comparative political and historical study. Cross-disciplinary insights show how institutions work in practice, how they evolve over time, and how they further different objectives in various social, political, and territorial contexts. Employing this broad perspective, this volume seeks to illuminate both the historical legacies and the present-day political and economic realities that continue to shape the field in the twentyfirst century. Several core themes bind together the contributions to both the first and the second editions of Comparative Administrative Law. The first is the relationship between administrative and constitutional law. The Germans speak of administrative law as ‘concretized’ constitutional law, and Americans often call it ‘applied’ constitutional law. The English, with no written constitution, refer to ‘natural justice’ and, more recently, to the European Convention on Human Rights (ECHR). Foundational constitutional norms of popular sovereignty, the separation of powers, the rule of law, and individual rights all have administrative counterparts that may have more day-to-day impact than maxims of higher law on the lives of those subject to state power. But the degree and nature of this connection between constitution and administration remains a matter of serious scholarly disagreement. At the one extreme, we might view administrative law as preoccupied with precisely the same concerns as constitutional law. At the other, we might see administrative law as a way of avoiding basic constitutional questions altogether and channeling legal, political and social conflict into a supposedly neutral domain of pragmatic management and technocratic expertise. Or, we might see administrative and constitutional systems as developing in tandem, as the evolution of administrative capacities calls forth new 1 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 1

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2  Comparative administrative law c­ onstitutional concerns, or operationalizes them in novel ways. Many of the contributions to this volume attempt to address such fundamental disputes: Are administrative and constitutional orders merely two sides of the same coin, or are they independent variables that ­comparative study must treat separately? If administrative and constitutional norms are distinct, in what ways do they conflict? How does this conflict vary across ­jurisdictions, and why? Related to but distinct from general constitutional principles is a more specific concern with democracy in administrative law. Democratic norms arise in the administrative context in three different senses: participation in the administrative process; the control that democratically elected politicians and democratically enacted laws seek to impose on administration; and the role of administrative governance in safeguarding the public sphere. Participatory forms of administration, such as ‘notice-and-comment’ rulemaking in the United States, aim to tap the knowledge and value commitments of affected persons and groups in crafting administrative policies. The administrative guardianship of the public sphere, such as through the regulation of urban space, may aim to preserve certain communal settings for deliberation that make democratic politics possible. Political control over administration, such as through at-will appointment of heads of administrative departments, aims to bind bureaucratic decision-making to the preferences of democratically elected principals. Judicial review of administrative action can fortify (or undermine) each of these democratic objectives. Judges can incentivize agencies to consult the public more fully, bind administrative action to statutory norms, require intensive political supervision over bureaucracies, or recognize public interests in the disposition of nominally private property. Judicial doctrines concerning administrative discretion, reason-giving, and the review of questions of ‘law’ versus ‘fact’ may influence the way states handle both institutional and political friction. But judicial control can weaken democracy and the rule of law by substituting the judges’ view for those of politically accountable or expert administrators. Democratic and political values therefore raise a series of crucial questions for the comparative study of administrative law: Is administrative law merely epiphenomenal to politics, or are there important differences in the way administrative-law regimes respond to, incorporate, dissipate, or perhaps ‘rationalize’ political pressures? What kinds of complementarities and trade-offs are there between control by elected representatives, public participation, and the bureaucratic superintendence of democratic society? How and why do different jurisdictions incorporate and balance these various combinations of representative politics, participation, and publicity? Do doctrines of judicial review account for meaningful differences in how jurisdictions implement democratic choices, or are such variations merely curiosities that conceal the fundamental commonalities in legal order? The distinction between public and private is also essential to administrative law. Common law jurisdictions long sought to downplay the distinction, claiming that the same courts and legal principles should resolve both wholly private disputes and those involving the state. Nevertheless, even in the common law world, debates over the proper role and unique prerogatives of state actors are pervasive. Some scholars still assume that one can compartmentalize regulatory activities and actors into either a public or a private sphere. This may be analytically convenient, but it does not fit the increasingly blurred boundary between state and society. As we have passed from an age of ascendant neoliberalism and privatization to a period that has raised doubts about market-oriented

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Introduction  3 reforms, the line between public and private remains as contested as ever. The question of public-private relationships arises acutely where administrative action intervenes into a sphere that is protected by an individual right. In Europe, for example, courts regularly apply the principle of proportionality—if a policy interferes with a right, then it must be designed in the least restrictive way. As a result, courts have begun to impose standards on government policymaking, at least when rights are at stake. The relationship between the ‘private’ market and the state raises the related issue of the role of economics and social science in administrative policymaking. Administrative law deals frequently with questions of economic regulation, and often uses tools of economic analysis to evaluate such policies. Is administrative law governed by a particular conception of the economy and the state’s role in it? In a period where there is renewed concern about economic inequality, unemployment, and the loss of national sovereignty to international free trade blocs, what resources might administrative law regimes offer to address these worries? International and supranational legal developments are increasingly influencing domestic regulatory and administrative bodies. The project in Global Administrative Law centered at New York University (Kingsbury, Krisch, and Stewart 2005), focuses on the administrative law of international organizations, such as the World Trade Organization. Nevertheless, it often draws on domestic models of the administrative process for inspir­ ation. Our focus here is complementary. This collection emphasizes how the practices of multi-national and regional bodies, especially the European Union, have both emerged out of and affected the administrative process in established states. More than the Global Administrative Law project, however, we emphasize the durable diversity of the structures and normative commitments of domestic and supranational regimes. This volume, like the first edition, attempts to capture the complexity of the field while distilling certain key elements for comparative study. Part I begins by concentrating on the relationship between administrative and constitutional law—uncertain, contested, and essential. Part II focuses on a key aspect of governmental structure—administrative independence with its manifold implications for separation of powers, democratic selfgovernment, and the boundary between law, politics, and policy. Next, Part III highlights the tensions between impartial expertise and public accountability, especially when the executive and independent agencies make general policies. Part IV discusses administrative litigation and the role of the courts in reviewing both individual decisions and secondary norms (‘rules’ in US parlance). Part V considers how administrative law is shaping and is being shaped by the changing boundaries of the state. Part V.A considers the shifting boundary between the public and the private sectors, and Part V.B concentrates explicitly on the European Union and its complex relationship with the Member States.

I. CONSTITUTIONAL STRUCTURE AND ADMINISTRATIVE LAW Constitutional structure and administrative law interact in important ways, shaping the rights and duties of professional administrators, elected politicians, and judges. Assigning activities exclusively to the constitutional or the administrative law category, however, is a challenging and ultimately fruitless enterprise.

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4  Comparative administrative law According to Bernardo Sordi (chapter 1), the emergence of administrative law in Europe is a modern phenomenon that was tied to the increasing ‘specificity and ­subjectivity’ of public administrative power since the end of the eighteenth century. Sordi’s fundamental claim is that ‘administrative power’ and ‘administrative law’ emerged ­contemporaneously—in other words, the new authority and its legal limitation arose together. This conjunction arguably holds true outside of Europe as well. Sordi stresses that old regime monarchies in Europe ruled through a corporatist system of privileges and jurisdictions grounded in conceptions of right (notably ‘property’) that we would today see as private. It was precisely the progressive extrication of ‘public’ authority from this corporatist old regime, as well as the development of a distinct corps of public servants to pursue and defend these new public prerogatives, that marked the emergence of administrative modernity in the Western world. Over the course of the nineteenth century, administrative law began to emerge as a means of setting legal limits on emergent administrative power. Owing to different institutional and conceptual starting points (most importantly, different understandings of the relationship of state to society and of justice to administration), the results of this process often differed. The substantive and procedural distinctions are now well known: Rechtsstaat/Etat de droit enforced by specialized administrative judges, on the one hand; and ‘rule of law’ enforced by the ordinary judiciary, on the other. Which variables have driven the historical process of legal institutionalization in such particular cases? We highlight three broad dimensions: functional, political and cultural. Under the first, functional, dimension, changes in social and economic conditions put pressure on existing institutional structures and legal categories. These pressures can then generate struggles in the second, political, dimension, where interests compete over the allocation of scarce institutional and legal advantages. In the third and final dimension— the cultural—political and social actors mobilize competing conceptions of legitimacy to justify or resist changes in institutions and in the law (Lindseth 2010; see also Lindseth 2017). The functional tasks facing the modern state and public demands for transparency and accountability pose a challenge to conventional constitutional thinking that stresses the three-fold division of the state into legislative, executive and judicial. Bruce Ackerman (chapter 2) argues that constitutional theorists need to go beyond Montesquieu’s tripartite view of the separation of powers—a line of thinking with a deep historical pedigree (see, e.g., Landis 1938). The substantive policy demands facing the modern state have led to all kinds of institutional innovations, beginning with the creation of independent regulatory agencies—for example, central banks and broadcasting commissions. The need for oversight and control to accompany policymaking delegation has led to the creation of monitoring organizations, such as supreme audit agencies, ombudsmen, and judicial review. Peter Strauss (chapter 3) highlights the important difference between parliamentary governments and the US constitutional and administrative system, including, especially, a US judiciary that is subject to considerable political pressures. This theme informs the most recent edition of Strauss’ treatise on US administrative justice, which is intended both for domestic and international audiences (Strauss 2016). Politics and ‘the rule of law’ are in considerable tension, even for normal issues of US domestic policy. Judicial review is a constitutional requisite, but politics operates nonetheless. According to Strauss,

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Introduction  5 administrative law, not just in the US but elsewhere as well, represents ‘a continuing contest between reason and unreason, and one must continuously work to make the influence of the former substantial.’ As Tom Ginsburg points out (chapter 4), even though public administration and the bureaucracy receive little detailed treatment in the texts of most constitutions, they form the backbone of state functioning. Most people are never accused of crimes or detained for political activities that implicate constitutional rights. Rather, they much more often deal with offices that grant licenses, allocate benefits, run schools and clinics, and collect taxes. Good administration is central to the performance of these tasks. The commonplace nature of such activities should not mislead us into thinking that administration is somehow less important than constitutional law from the standpoint of the public. One way to approach the links between constitutional structure and administrative law is through the lens of political economy, and more particularly through the work of positive political theory (PPT). Unlike explicitly normative work in constitutional law and political theory, PPT attempts to model state behavior in terms of the self-interest of the actors involved. (For a collection of articles that apply the approach to administrative law see Rose-Ackerman 2007.) Some PPT takes the basic structure of government as given— for example, a presidential democracy that elects representatives through plurality rule in single-member districts. Other work tries to explain the incentives for political actors to create or to modify the constitutional structure of government. Elizabeth Magill and Daniel Ortiz (chapter 5) take an intermediate position. They ask if PPT research on the US administrative system can be applied elsewhere. PPT explains judicial review in the US as a result of the legislature’s desire to check the executive and its inability to do this effectively on its own. Thus, the legislature is the dominant actor that can assign tasks to the courts. In a parliamentary system the same political coalition controls both branches, and so legislators from the majority coalition would not want the courts to intervene to oversee executive action. Court review of administrative action cannot lock in present political choices because statutes are quite easy to change. They claim that PPT would predict that parliamentary systems would provide for lower levels of judicial oversight of the administration than presidential systems. They show, in contrast, that courts in the UK, France and Germany are, in fact, quite active in reviewing administrative actions. The courts themselves seem to be independent actors at least insofar as they assert ­jurisdiction and oversee the executive. Andreas Voßkuhle and Thomas Wischmeyer (chapter 6) outline the challenge to trad­ itional German and continental administrative law traditions that comes from the Neue Verwaltungsrechtswissenschaft (the ‘new administrative law scholarship’). Voßkuhle and Wischmeyer are referring here to new perspectives on administrative law that respond to changing political and social conditions, especially the privatization of state-owned enterprises in network industries and the move from command-and-control regulation to more collaborative forms of governance. They argue that traditional German administrative law categories that emphasized hierarchy, primacy, and formality are inadequate to oversee administration in a modern welfare state. Scholars revived interdisciplinary links to the social sciences, and a new ‘regulation’ paradigm arose under which the state should engage in ‘steering’ (Steuerung) the private sector, not controlling it outright. As the chapters in Section V.B demonstrate, this shift in perspective was encouraged by the European Union, especially in network industries. Although a debate continues within the field of

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6  Comparative administrative law administrative law in Germany, contributors to the new administrative law scholarship have pushed the field toward both a deeper concern with substantive policy, on the one hand, and a sharper focus on administrative procedure, on the other. Stepping back from recent reform efforts, Marco D’Alberti’s contribution (chapter 7) explores the evolution of administrative law over the last 100 years in Italy, examined from a comparative perspective. Similar to Voßkuhle and Wischmeyer but with a longer historical sweep, D’Alberti stresses how changes in the underlying functions of the state in the twentieth century influenced the development of administrative law. The rise of industries with monopoly power and the privatization of formerly state-controlled sectors produced a demand for the control of markets to which all developed states responded, albeit in different ways. D’Alberti, moreover, discusses the way administrative law has sometimes served as a check on populist or democratic demands by giving organized and powerful economic interest groups a way to challenge policy. He highlights an ongoing tension in the political and historical analysis of administrative law. Public law provisions that are justified as a check on overarching state power can also be a means of entrenching existing private interests. Legal constraints may under some conditions limit the ability of democratic governments to constrain concentrated, monopolistic economic interests. The section closes with Kriszta Kovács and Kim Lane Scheppele’s (chapter 8) reflections on the troubling recent developments in Hungary. These developments raise more general concerns, showing how autocratic trends can develop even in a constitutional system with nominally democratic forms. The dominant party has been able to make constitutional and personnel changes that undermine institutional checks and balances. The regime seems to follow its own rules, and in the process has moved the state in an authoritarian direction. Their contribution also shows the crucial complementarity between the protections of constitutional and administrative law. Although constitutional norms are required to maintain free and democratic societies, the concrete procedures and protections of administration may have more daily impact on citizens and the tenor of their collective social life.

II.  ADMINISTRATIVE INDEPENDENCE Administrative independence is enthusiastically espoused by some and roundly condemned by others. One reason for the controversy is a lack of consensus over what independence is and what it can accomplish. In the contributions in this section, independence generally means that a public entity has some degree of separation from day-to-day political pressures. Martin Shapiro (chapter 14) describes such agencies as ‘fall[ing] outside any cabinet department or ministry organization chart.’ This seems apt, although many such agencies are still subject to some oversight from core government departments or branches. Even in the US, with a history that goes back to the establishment of the Interstate Commerce Commission in 1887, ‘independent agencies’ are not completely independent. The President appoints commissioners with Senate approval, and the chair serves in that capacity at the President’s pleasure. Most agencies operate with appropriated budget funds, and none has constitutional status. Furthermore, the US lacks independent oversight agencies except for the Government Accountability Office,

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Introduction  7 which reports to Congress. Nevertheless, staggered terms that exceed the terms of the President and members of Congress, party balance requirements, and removal only for cause all limit executive control compared with those agencies directly in the presidential chain of command. Independent agencies are also subject to Congressional oversight, which may be relatively stronger in this context simply because presidential oversight is more attenuated. Administrative independence is often defended as a way to assure that decisions are made by neutral professionals with the time, technical knowledge, and practical experience to make competent, apolitical choices. The heart of the controversy over independence, however, stems from the agencies’ disconnect from traditional democratic accountability that flows from voters through elected politicians to the bureaucracy. Attempts to legitimate such agencies in democratic terms often stress the importance of processes that go beyond expertise to incorporate public opinion and social and economic interests. The ideal is an expert agency that is independent of partisan politics but sensitive to the concerns of ordinary citizens and civil society groups. The risk is capture by narrow interests. Daniel Halberstam (chapter 9) explores the question of agency legitimacy from a broad constitutional perspective, arguing that in Germany, France, and the US the turn to administrative agencies can be seen as an attempt to counterbalance perceived structural pathologies of the general branches of government. In contrast to France and the US, where administrative agencies partly reflect a desired move away from ordinary politics to better protect the public interest, in Germany certain aspects of federalism, judicial review, and parliamentary government have supported the continued belief in the ­capacity of the general branches of government to define and pursue rational policy respecting constitutional demands. Halberstam thus finds that, outside certain narrow, functionally specific domains, ‘there are few calls for independent administrative agencies in Germany to serve as a sober counterpoint to raw politics.’ Lorne Sossin (chapter 10) considers administrative independence in common-law parliamentary jurisdictions. In such systems, there is an inherent tension between the government that is organized by the political faction controlling the legislative branch, and ‘the Crown,’ which is supposed to be impartial in dealing with public policy matters. Sossin focuses on what he calls ‘hybrid settings where the political realities of partisanship and the legal structures of autonomy from partisan considerations create . . . a “puzzle” of independence.’ Canada, he argues, is a particularly vexed case because of controversies over the political control of appointments and other dimensions of administrative independence. In contrast, other Commonwealth polities (the UK, Australia and New Zealand) have, in his view, given independent agencies a clearer and more well-articulated position in their governmental structures. In the US, independent regulatory commissions attempt to address democratic concerns by building in partisan balance. Instead of requiring technocratic expertise or professional credentials for the commissions’ leadership, most agency statutes set up a multi-member governing board and require that no more than a majority can be from a single party. As with the US judiciary, the appointment process is highly political. But with fixed, staggered terms and party balance, agencies can, in principle, respond to changing conditions as their membership changes gradually over time. This feature of US commissions, as Martin Shapiro demonstrates (chapter 14, see also Majone 2001),

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8  Comparative administrative law has not been copied in the EU, although, as we see below, it has influenced agency design elsewhere. The European Union has substituted ‘technocratic for democratic legitimacy’ according to Shapiro, although he points out that the staff of EU agencies express ‘strong allegiance to democratic values.’ Agencies have proliferated at the EU level in recent years, but rather than seeking partisan balance based on political party affiliation, Member States are represented on agency boards. This political compromise, in practice, led to the dominance of technical experts who are appointed by Member States and interact with their respective specialized ministries. However, the emphasis on technical competence seems to be coming under increasing strain because the global financial crisis has led to more EU agencies with greater powers and hence to their growing political salience in the Member States (see the contributions in this volume from Saurer, chapter 37; Mendes, chapter 38; Ruffert, chapter 40; and Lindseth, chapter 41). To complement the contrasts between the US and Europe, two chapters consider agencies in polities that have been influenced by both American and European legal models. For example, in Brazil with its strong president, Mariana Mota Prado (chapter 11) shows that the independent agency model, although borrowed from the US, operates quite differently. The theory of congressional dominance that comports with US reality does not describe Brazilian agencies that are clearly subordinate to the executive whatever their nominal form. Drawing on evidence over the last decade, Prado explores both how and why this has occurred. She then considers whether and to what extent institutions originally created in the global north, such as independent regulatory agencies, can have a different political valence in countries like Brazil, where recent shifts in the relationships between state and civil society remain deeply contested. Prado addresses the issue of how ideology can interact with institutional choice and political strategy: in heavily presidential systems such as Brazil, the President may interfere with administrative agencies not merely to advance narrow policy preferences within a particular domain, but rather to implement broader philosophical shifts from a neoliberal ‘regulatory state’ to a less market-oriented and more interventionist ‘developmental state.’ This contribution also highlights terminological difficulties that arise in the comparative study of administrative institutions. In the US, regulatory agencies and the regulatory state generally reflect a ‘progressive’ philosophy of the state, which aims to preserve the market economy, but to address its pathologies and to protect the ‘public interest’ against powerful private concerns. In developing countries such as Brazil or India, and in the EU, independent regulatory agencies are associated with efforts to privatize state-owned enterprises and increase the power of private economic activity vis-à-vis the state. This terminological shift shows how administrative institutions can be repurposed over time to respond to new political movements and interest-group pressures. Jiunn-rong Yeh (chapter 12) reports on Taiwan’s effort to create an independent regulatory agency for telecommunications in the face of a ruling by the Supreme Court striking down an appointments process that gave too large a role to the legislature. The agency is now functioning under a revised mandate. Taiwan has a semi-presidential system and an administrative law structure that has been heavily influenced by German public law. Hence the creation of new regulatory agencies brings to the fore unresolved issues about the relative status of the various parts of government. In comparing the formal independence of Taiwan’s telecoms agency with the practical (but not formal) independence of the central bank, Yeh suggests that ‘legal protection or institutional design of independence

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Introduction  9 is not everything. . .. Leadership and political manipulation may influence the practice of an independent agency.’1 Arun Kumar Thiruvengadam (chapter 13) assesses the evolution of regulatory institutions in India and their links to similar bodies in the UK and the rest of the British Commonwealth. As in Brazil, independent agencies were created as part of a push towards a more market-oriented economy, addressing perceived failures in centralized, state-led planning in areas such as telecommunications, energy, and finance. This development arose from a combination of external pressures—the post-Cold War ‘Washington Consensus’—as well as from policy entrepreneurs within the Indian government who sought to move the country away from the ‘old socialist state of the 1980s.’ This contribution explores how the adoption of independent regulatory agencies has had complex causes and results. Although motivated by internal and external calls for market-oriented reforms, independent agencies also injected sector-specific expertise, transparency, and accountability, at the same time as they heightened the risk of private interest-group dominance in the regulatory process.

III.  TRANSPARENCY, PROCEDURE, AND POLICY-MAKING The role of administrative law in mediating the potential tension between democratic accountability and technocratic expertise is the subject of the contributions to this section. Public agencies promulgate regulations for many different purposes. They seek to correct market failures, protect rights, and distribute the benefits of state actions to particular groups—ranging from the poor or disadvantaged minorities to politically powerful industries such as agriculture or oil and gas. Executive policymaking in democracies raises issues of public legitimacy and democratic accountability. Discussions of ‘good’ policy by social scientists, risk analysts, and other specialists sometimes clash with efforts to maintain the democratic accountability of agency ­policymaking. This tension is especially salient under US notice-and-comment rulemaking and may be less evident in other legal systems where the law emphasizes the adjudication of individual administrative acts, not norm setting (Rose-Ackerman, chapter 15). In the systems that focus on adjudication, judicial review does not check rulemaking procedures for democratic legitimacy. Notice, public input, and reason-giving may be expedient but are seldom legally required in parliamentary systems. Public involvement in individualized capital-investment decisions is, however, spreading in many polities. Rose-Ackerman argues that in some cases such involvement does not further democratic legitimacy, even if it helps limit local opposition. Public debate over broad policy does not occur; rather, the issues at stake often only concern the distribution of the benefits and costs of already decided policies. The US model is the subject of Jerry Mashaw’s essay (chapter 16). Mashaw provides an historical overview of reason-giving as an administrative obligation over the course of

1   Other independent agencies police the behavior of government bodies themselves. The case for independence is particularly strong for such agencies, but so is the need for oversight to prevent either their capture by regime opponents or their lapse into inaction. See Ackerman 2010.

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10  Comparative administrative law the nineteenth and twentieth centuries. A pivotal development in this history was adoption of the notice-and-comment provisions of the Administrative Procedures Act of 1946 (§553) dealing with so-called ‘informal’ rulemaking. These provisions require agencies to provide notice, to allow for outside participation, and to give reasons when they issue a rule. Judicial development, as Mashaw notes, has greatly expanded the robustness of these procedural demands while also expanding the scope of review to include the rational underpinnings of the rule and its consistency with the implementing statute. The US model, however, is not the only way to deal with the tension between technical competence and democratic legitimacy. Under a second model, the decisions of corporatist bodies, which include stakeholder representatives, have legal force. This model, which departs from the quasi-judicial model underlying the US APA, may freeze in place a particular pattern of interest representation in spite of changes in the underlying pattern of affected interests (Rose-Ackerman 2005, 126–62). Furthermore, some of those around the table may be good representatives but poor bargainers. A third model is an explicitly elite process under which a select body reviews general norms and regulations with legal force. The most developed system is found in the French Conseil d’Etat, whose administrative sections review and comment on government drafts and also prepare background material on policy issues. The Conseil, however, is also an administrative court that judges the legality of administrative actions. Dominique Custos (chapter 17) outlines recent French reforms embodied in its first-ever administrative procedure code. Conventionally, administrative law in France has been understood as jurisprudentiel – that is, a product of the case law of the Conseil d’Etat in its judicial mode. Custos, however, notes several long-term trends in national, European and international legislation that have cut into the administrative judiciary’s traditional predominance in defining administrative procedure. The new code builds on, and in some sense consolidates, those trends. Nonetheless, Custos suggests that the incomplete nature of the codification, combined with the well-established interpretive resourcefulness of the Conseil d’Etat, means that the administrative judiciary will retain a key role in the procedural dimension of French administrative law. Javier Barnes (chapter 18) offers a typology of administrative procedures, according to different modes of governance. He distinguishes three generations of administrative procedures. Presently, third-generation procedures take place in a context of networked policymaking, which involves a greater variety of actors and voices. The third generation is  based on procedural collaboration between administrations and/or private parties aiming not only to make individual decisions and regulations, but also to enable participation at different stages (for example, regulatory impact assessments or environmental permit ­procedures). Procedural reforms should take account of the ‘holistic, cross-­ sectional’ nature of many policies. Both integration and collaboration are needed, but, as Barnes realizes, striking the right balance will not be an easy task. Many new regulatory agencies in Europe have introduced accountable procedures on their own initiative even though they were isolated from electoral politics. Dorit Rubinstein Reiss (chapter 19) provides case studies from the UK, France and Sweden. She argues that the regulators supported greater public involvement because they needed outside support to survive and could imitate established models in the US and elsewhere. More participatory and transparent processes were seen as a way of increasing their own legitimacy. However, as she demonstrates, these moves did not always have that effect.

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Introduction  11 Sometimes they simply increased the power of the regulated industry. In some cases, however, the agencies reacted to the risk of capture by taking steps to facilitate consumer input. The executive may seek to monitor and influence agency policymaking even absent external legal control by the courts. In that regard, Jonathan Wiener and Alberto Alemanno (chapter 20) review the experiences of the US and the EU with so-called Regulatory Oversight Bodies (ROBs), carrying out regulatory impact assessments of proposed rules (ex ante RIA) and retrospective regulatory impact assessments of existing rules (ex post RIA). The key body in the US is the Office of Information and Regulatory Affairs (OIRA). In the EU, the Regulatory Scrutiny Board (RSB) (formerly called the Impact Assessment Board (IAB)) plays a similar role. The emergence of ROBs in both the US and the EU, Wiener and Alemanno suggest, ‘demonstrates the transatlantic consensus on the desirability of regulatory oversight at the center of government.’ To the extent that there are differences in approach, these flow from the contrasting US and EU constitutional contexts, leading to procedures that occur ‘at different stages in the policy cycle, with different powers and limitations.’ For example, in the US systematic regulatory review occurs in the executive branch during the implementation phase, rather than when the executive submits draft statutes to the Congress. In the EU, by contrast, the Commission conducts impact assessments for its legislative proposals, using tools of economic policy analysis to frame legislation, rather than the administrative rules that follow from them. The contribution of Giulio Napolitano (chapter 21) flows directly from the increasing use of ROBs and RIA: governments must become ‘smarter’ to carry out policies in a world of shrinking budgets and fiscal deficits, which limit options. Napolitano’s chapter ­considers regulatory policymaking in the light of financial crises and the retreat from neoliberal deregulatory policies. He argues that even if contemporary crises have ­reinvigorated the role of the state, the demand for ‘smarter’ government persists. Following a broad survey of trends throughout the world—importantly in the use of digital ­technologies— Napolitano argues that administrative law must confront the s­carcity of regulatory capacity and limited budgets for social services. However, ‘a new world, based on policy management, cost-benefit analysis, and regulatory review,’ he writes, has also led ‘to the re-discovery of the traditional world of administrative law,’ notably through efforts to codify administrative procedures and to increase transparency and participation rights of the type highlighted elsewhere in this section. As suggested by several of this section’s contributions, many participants in the debate over policy analysis privilege a particular type of expertise derived from science and economics. Others contributors urge more transparent, participatory decision-making processes. The two approaches are compatible so long as public officials recognize that they may not have all the necessary expertise. Participation and transparency can serve not just as rights but also as a means to the end of better policy outcomes. Greater public involvement may not only produce more effective policy but also increase the acceptability of the regulatory process both in representative democracies and in entities, such as the EU, that also seek public legitimacy. Catherine Donnelly (chapter 22) elaborates the traditional tension in administrative law between technical expertise and democratic accountability in a comparative framework. Donnelly shows how this tension has played out in the US, the EU, and the UK and how

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12  Comparative administrative law the courts have tried to manage that tension. Several important differences emerge. In the US and the EU, courts act as a counterweight to the prevailing ethos—upholding expertise in the US, and treating claims of expertise with caution in the EU. The UK courts view both public participation and expertise with caution, and they legitimate administrative action based on a Weberian understanding of a hierarchical, professional, politically neutral civil service. For policies where a cost-benefit test seems appropriate, one response to this tension would be to combine cost-benefit analysis with transparency as a means of blocking agencies from adopting measures that benefit narrow interests. This requirement could have legal force if applied by the courts. As one of us (Rose-Ackerman 1992) argues, a judicial presumption in favor of net benefit maximization increases the political costs for narrow groups, which would have to obtain explicit statutory language in order to have their interests recognized by courts and agencies (see also Sunstein 2002: 191–228). This proposal is, of course, controversial even in the United States and would presumably garner even less support in legal regimes with little court review of rulemaking. Yet it raises an import­ ant question that animates the entire discussion of administrative litigation to which we now turn: What should be the judiciary’s role in reviewing the policymaking activities of modern executive branch bodies and regulatory agencies?

IV. ADMINISTRATIVE LITIGATION AND ADMINISTRATIVE LAW The tension between administration and justice—between the policy prerogatives of the state pursuing regulatory programs, on the one hand, and the demands of justice in individual disputes, on the other—underlies all the contributions to this section. Administrative litigation raises a set of questions familiar to any student of administrative law: Under what circumstances should we allow a private party to enlist the aid of an independent judge to rule on a dispute over administrative action? Who may seek that aid (standing)? When (timing)? On what issues (scope of review)? To what end (remedies)? Concentrating on the UK, US, Canada, and the EU, Paul Craig (chapter 23) assesses judicial review of questions of law, ranging over issues of jurisdiction, other types of legal questions, as well as administrative rationality more generally. This provides an opportunity for a common law / civil law comparison (with the EU largely representing the latter, and the UK, US, and Canada the former). For American administrative lawyers, of course, judicial review of questions of law implicates the much-debated Chevron doctrine,2 which Craig uses as a pivot in contrasting the frameworks developed elsewhere. US and Canadian judges have developed approaches that overtly favor deference, at least in some circumstances. UK judges at one time seemed to share the inclination of their more civilian colleagues in Europe in refusing to defer to the legal interpretations of the government 2  In Chevron, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) the Court upheld the EPA’s definition of the statutory term ‘stationary source’ of pollution. The Court famously outlined a two-step procedure: if the statute’s meaning is clear, that meaning binds the administrative agency’s policy choice; however, if the statute is ambiguous, the court will defer to the agency’s interpretation if it is reasonable.

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Introduction  13 and public agencies, including its administrative tribunals, at least where ‘­jurisdictional’ issues were concerned. However, decisions handed down since the first volume of Comparative Administrative Law suggest a move toward slightly more deference, or at least a willingness to give interpretive weight to an administrative tribunal’s conclusion on an issue of law. But before one begins to think in terms of a simple common law / civil law divide (a position that Craig’s nuanced chapter would not support in any event), we should also consider the Australian case, in which judicial deference on questions of law is clearly disfavored (see Cane 2016). In developing civilian and common law comparisons, the concept of proportionality provides one important point of entry. Jud Mathews (chapter 24) notes that, as a control on exercises of governmental discretion, the ‘global spread of proportionality is one of the worst-kept secrets in comparative law,’ moving well beyond its civilian (particularly European) origins. Much of the existing literature has, however, looked at the question in the constitutional context. Mathews’s focus is on the administrative domain, surveying a diverse range of approaches in the ‘intensity,’ ‘discursiveness,’ and ‘extensiveness’ of proportionality review around the world, and offering hypotheses about the variation that he observes. He notes, for example, that the extensiveness of proportionality analysis within a given legal system will depend on a broader set of administrative law principles, including rules on the scope of review, which may limit its application. The intensity of proportionality may be better ‘calibrated’ to the legal and factual implications of the case in systems where the doctrine has matured, rather than only recently been introduced. The chapter from Gabriel Bocksang Hola (chapter 25) also bridges the civil law / common law divide, describing the deep philosophical issues behind the core activity of judicial review: the declaration of invalidity of administrative action (or, in civilian terms, an ‘administrative act’). The focus is on the distinction between ‘voidness’ and ­‘voidability.’ The chapter suggests that certain systems operate in a ‘monist’ fashion, in which voidness and voidability are not readily distinguished, whereas others are ‘dualist,’ thus retaining the distinction to some degree. These issues, although seemingly abstract, have significant bearing on crucial practical questions, such as standing, the availability and timing of judicial review, and remedies—in short, on the capacity of private parties to enlist the aid of a judge in the task of promoting administrative legality. Where a court characterizes an administrative act as ‘void,’ the availability of review and types of remedies may be significantly greater than where the act is merely characterized as ‘voidable.’ There is a famous adage in French administrative law—juger l’administration, c’est encore administrer—‘to judge the administration is still to administer.’ It recognizes the difficulty, if not impossibility of separating the process of legal control from the underlying process of administration. External legal control, whether exercised by courts or court-like administrative tribunals like the French Conseil d’Etat, will always shape regulatory policy in a myriad of ways. Read most strongly, this French adage implies an ideal of a ‘self-regulating’ administrative sphere that is detached from traditional values of justice and guided by its own sense of policy rationality and its own estimation of the public interest in the construction and regulation of the market (Lindseth 2005: 119). This adage, moreover, underlies the French dualité de juridiction, in which administrative judges organically attached to the executive are primarily competent to hear challenges to administrative action. Jean Massot (chapter 26), a member of the French Conseil d’Etat for over four decades, notes how the French system of administrative justice ‘progressively

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14  Comparative administrative law became both an extremely powerful judge and an institution at least as independent as its judicial counterparts.’ Despite its Napoleonic origins, the Conseil d’Etat eventually woke up to the fact that ‘juger c’est juger’—to judge is to judge—as one leading member put it in the mid-nineteenth century (Vivien 1852). In other words, French administrative judges came to realize that, despite the potential impact of their rulings on administrative policymaking in the ‘general interest,’ their office still required independence, procedural fairness, even a willingness to revisit certain aspects of the underlying administrative act in the interest of justice in the particular case. In their contribution, Michael Asimow and Yoav Dotan (chapter 27) ask what materials a reviewing court should be allowed to consider, in terms of evidence, reasons, and arguments, even if those materials may not have been before the administrative body when it undertook the action now under challenge. Comparing the US and Israel, the authors distinguish between systems that require relatively open or closed evidentiary records, as well as those that adopt rules regarding open or closed reasons or open and closed arguments. They find that the US falls near the closed end of the spectrum and may have the most closed system, whereas Israel falls closer to the open end of the spectrum, although its practice is inconsistent. More importantly, they suggest that understanding how a system opts for closed or open review provides a window into the division of responsibilities between the administrative bodies and the judges reviewing for legality in that system. In a system like the US that is firmly committed to the separation of powers and that invests heavily in the development of an administrative record, closed review ensures a degree of administrative autonomy from judicial review. In Israel, by contrast, courts intervene much more widely in reviewing administrative decisions because the division of responsibilities is less clear, and there is less emphasis on the soundness of the initial administrative determination. Athanasios Psygkas (chapter 28) also explores this division of responsibility in his examination of a specialist regulatory court in the UK, the Competition Appeal Tribunal (CAT). Psygkas argues that, because of the CAT’s institutional design and operation in practice, it combines the advantages of a specialist court, in terms of more in-depth substantive review, while mitigating the associated risks of specialization (insularity and the loss of broader perspective, as well as overly aggressive substitution of judgment). But Psygkas is most impressed by the capacity of the CAT to weave together review of both process and substance, which ‘enhances the robustness of the decisionmaking process by ensuring, for instance, that public consultation has been properly conducted in a way that has allowed the voices of different stakeholders to be heard or that the cost-benefit analysis demonstrates an appreciation of the complexity of the interests at stake.’ Cheng-Yi Huang (chapter 29) considers the question of deference in emerging democracies. Huang’s contribution explores recent developments in constitutional courts in Poland, Taiwan, and South Africa. He notes that the transition to democracy from a period of dictatorship or authoritarianism often can trigger profound hostility to administrative power and unchecked legislative delegation. In Huang’s account, this translates into judicial activism for constitutional courts in the early post-transition years. However, in the second decade after democratization, courts in each of these countries relaxed standards of judicial review to allow for legislative delegation to the executive. More recently, administrative law has been marked by a ‘fear of authoritarian resurgence,’ as dominant party governments expand their power. In South Africa and Taiwan, courts have responded by ‘proceduralizing’ judicial review: they refrain from questioning the

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Introduction  15 ultimate wisdom of the policy choices or determinations of administrative bodies, but nonetheless police the procedures through which those decisions are made to insure that they are transparent and fair. Poland has not followed this same trend, retaining a substantively and procedurally deferential posture towards the executive, and failing as yet to develop a ‘defensive jurisprudence’ against an emboldened executive. Kovács and Scheppele provide a particularly clear case of this latter outcome, as mentioned above. The contributions of Narufumi Kadomatsu (chapter 30) and Thomas Perroud (chapter 31) provide comparative perspective on administrative litigation in a particular domain— the protection of public spaces. In so doing, they touch on many of the core issues of this section. Kadomatsu looks at the regulation of private property, while Perroud considers the regime to which public property is subject. Kadomatsu proposes two models in his analysis: a ‘rights-based model’ and a ‘consultation and coordination model.’ He then explores the Japanese judiciary’s traditional role as resolving only ‘legal disputes’ (along with associated justiciability doctrines familiar in other administrative law systems), which is grounded in the rights-based approach and has traditionally restricted access to the courts. Nonetheless, Kadomatsu suggests that the judiciary may be moving more toward a ‘consultation and coordination model’ that will facilitate the involvement of stakeholders in administrative decision-making in the urban context in Japan. Perroud, for his part, notes that ‘public property law’ is a major topic of administrative law scholarship in France but receives very little attention in common law systems such as the UK and the US. Perroud is particularly interested in the managerial and proprietary powers that administrative actors possess in the context of public property that could conflict with the public character of the property itself. How do the courts respond to this challenge? Perroud discerns some common goals in the two systems, most import­ antly the desire to vindicate the rights of citizens as well as placing curbs on state power. Nonetheless, Perroud also locates some potentially troubling historical trends, notably the privatization of the public space (e.g., malls), with concomitant potential adverse impacts on the ‘public sphere’ that is essential for healthy democratic life.

V. ADMINISTRATIVE LAW AND THE BOUNDARIES OF THE STATE A.  Public and Private The contributions from Kadomatsu and Perroud that close the previous section raise issues that are also essential to questions of administrative law and the boundaries of the state. Especially in countries with a civil law tradition, the distinction between public law and private law has been central to the development of administrative law. The common law tradition often obscured this boundary, but today all modern states recognize its existence in their efforts to construct a specifically public law. Given the existence of a distinctive public law everywhere, the move over the last several decades to privatize and contract out government services presents a particular challenge. What legal principles should apply to private bodies that carry out formerly public functions or that take on new tasks under contract? Will the trend toward the use of nominally private firms lead to the integration of public and private law, even in states, such as France and Germany,

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16  Comparative administrative law where the public law/private law distinction has deep historical roots? The chapters in this section raise these questions and provide some tentative answers. As outlined by Daphne Barak-Erez (chapter 32), privatization has many meanings, but we highlight three salient ones derived from her more detailed taxonomy. First, in its strongest form, privatization means that the state exits entirely from a sector or policy area leaving it to be governed only by the laws that regulate the actions of all private businesses and that frame private interactions. Second, a public utility may be converted into a private firm, with or without a ‘golden share’ remaining in state hands, and placed under the supervision of an independent regulatory agency. The agency itself is obviously a public law entity and may hold public hearings, comply with transparency requirements, and so forth. Thus, the private firm is essentially a private law entity that must subject itself to scrutiny by a specialized public law agency. Third, the state may decide that a nominally private firm must comply with some public law strictures in carrying out its business, even in the absence of oversight by a specific agency. Some of the proposals to resolve the financial crisis have taken that form. However, the most common examples occur when a private firm contracts with the government to provide a service—for example, in-patient care for the mentally ill, incarceration of prisoners, health care, and security services such as guard duty. Here, the state explicitly requires the contractor to act in accord with public values by, for example, providing due process guarantees to applicants, operating with a level of transparency not usual in the private sector, or, in the national security context, complying with military norms and rules of behavior. This last category raises the most direct challenge to traditional public law/private law distinctions, especially in states with a civil law tradition. They also challenge libertarian presumptions about the inherent value of private enterprise compared to public bureaucracies as service providers. Jean-Bernard Auby (chapter 33) discusses the way contracts with government can extend public values to private service-delivery firms, but he stresses the risks inherent in programs of private provision for formerly state-supplied services. These concerns have produced legal limits on contracting out in many countries, but they have also generated a range of responses—from careful contract drafting to self-regulatory mechanisms. Laura Dickinson (chapter 34) extends this analysis to the US military, often understood as beyond the scope of administrative law. She grounds her study in organizational theory by examining the relative impact of inside socialization and sanctions versus outside incentives in influencing behavior, a contrast with broader relevance beyond the specific case she examines. Dickinson shows how the existence of ‘compliance agents’—in this case, military lawyers embedded with US troops—promotes respect for public law values through their direct contact with commanders and troops in the field. In this way, Dickinson’s chapter opens up our perspective to an important new terrain for administrative law scholarship (comparative or otherwise): the role of compliance within large-scale organizations subject to regulation. Promoting or mandating compliance systems is a way that regulators, in effect, encourage organizations to internalize enforcement functions and build mechanisms and staff to enhance conformity with regulatory demands. Concerns over regulatory compliance not only push up against the public-private boundary but also that of the law strictly speaking, in which more intangible concerns such as ‘tone at the top’ become crucial to ensuring that a culture of compliance is properly in place. Victor Ramraj (chapter 35) closes out this section by examining the public-private

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Introduction  17 boundary in transnational regulation. As Ramraj opens his contribution, ‘[t]wo contemporary developments are challenging our understanding of administrative law: the privatization of regulation and its increasingly transnational nature.’ Thus, his chapter straddles the issues raised here and in the next section. To him, the combination of privatization and transnational regulation falls into a ‘blind-spot’ in traditional administrative law. The purpose of his chapter is ‘to define the contours of transnational non-state regulation and identify the assumptions of domestic administrative law that make it largely invisible, and consider how domestic law might respond to transnational non-state regulation.’ This form of regulation is here to stay, and thus administrative law must begin to play ‘an important complementary role in checking concentrated forms of power and facilitating good administrative practices beyond the confines of the modern state.’ He considers three possible responses—isolation; formal incorporation; and recognition, engagement, and cooperation—as a means of exploring the nature and legitimacy of this form of regulatory power. Skeptical that isolation or incorporation are desirable or practical, Ramraj proposes that states and other public authorities consider the legitimacy of transnational non-state regulators when they engage with their normative output. The crucial factors in assessing the legitimacy of such non-state actors are: the degree to which the authority claimed by these regulators is accepted by the community they affect, the expertise of the bodies, and the quality of their regulatory product. B.  Administrative Law beyond the State: The Case of the EU Administrative law’s role beyond the state is the central focus of this final section, using the experience of the European Union as a case study. The section begins with theoretical considerations. Peter Cane (chapter 36) builds on his comparative work on Australia, England and the US (Cane 2016) to extend his reach to supranational and transnational authorities, especially the EU. Cane is concerned with the distribution of power ­(concentrated or diffused) and the corresponding control regimes (‘accountability’ and ‘checks-and-balances’). Insofar as the EU is concerned, Cane seeks to break from the overarching debate about the EU’s ‘constitutional’ versus ‘administrative’ character (about which more below) and instead understands EU law and governance in terms of his own conceptual framework. What he finds is a system of diffused power that, consistent with his theory, necessarily must rely on checks-and-balances as opposed to hierarch­ ical accountability. The remaining chapters in the section (Saurer, chapter 37; Mendes, chapter 38; Hofmann and Schneider, chapter 39; Ruffert, chapter 40; and Lindseth, chapter 41) engage either implicitly or explicitly in the ‘constitutional’ versus ‘administrative’ debate that Cane’s chapter avoids. The dominant discourse understands EU public law, at least in part, as a kind of constitutional law, albeit beyond the confines of the state. As Peter Lindseth’s contribution (chapter 41) summarizes: ‘The implication is that the centralized rulemaking process in the EU—in which the Commission “proposes” and the Council and EP together “dispose” in various ways—is also of a “constitutional” character, serving as the EU’s “legislature.” In this view, the EU’s “administrative” sphere begins where this “legislative” sphere ends.’ All the contributions in this section, save that of Lindseth, operate within this framework. Johannes Saurer (chapter 37) focuses on ‘agencification’ in the EU—that is the

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18  Comparative administrative law c­ reation of agencies beyond the European Commission. Saurer speaks in terms of a ‘new constitution of supranational administration,’ drawing his conclusions from an analysis of the 2014 ruling of the European Court of Justice (ECJ) in a dispute over the powers of the European Securities and Markets Authority (ESMA) in the context of the global financial crisis.3 Saurer sees this as a landmark decision that potentially marks the transition to a ‘new constitutional order’ allowing for the transfer of greater power to rules of binding application within EU agencies. Joana Mendes (chapter 38) builds on Saurer’s analysis by delving into the theoretical underpinnings of the ECJ’s approach. She provides a wide-ranging discussion of what the Court’s approach might portend for judicial review of administrative discretion more generally. Her focus is on ‘how law (i.e., legal norms and legal principles that administrative action ought to concretize and respect) may constrain and structure the substantive choices that EU administrators make within the spaces of discretion,’ rather than on how courts review an exercise of discretion. She worries that forms of deference (in particular, in ‘technical’ domains) may allow certain exercises of discretion to escape meaningful external review entirely. Consequently, she proposes that discretion be viewed as ‘a reconstruction of value judgments underlying legal norms,’ an exercise that must be ‘explicit and justified by reference to those norms. In this way, law would remain constitutive of discretion irrespective of possibilities of judicial review.’ Herwig Hofmann and Jens-Peter Schneider (chapter 39) are also deeply concerned with the exercise of administrative discretion in the EU. Their contribution reviews the proposals issued by the Research Network on EU Administrative Law (or ‘ReNEUAL’), in which they both were participants. This project, organized by a group of leading European administrative law scholars, has drafted model rules for EU administrative law informed by a comparative perspective. The backdrop is a status quo marked by ‘significant fragmentation into sector-specific and issue-specific rules and procedures.’ Although the ReNEUAL participants do not object to this diversity in itself, they also argue that it is time to develop ‘procedures in which actors from various jurisdictions, both national and European, contribute to one single administrative procedure.’ Consequently, the ReNEUAL project not only covers the administrative activities of EU bodies strictly speaking, but also those of national bodies implementing EU law. The project also includes the EU’s participation in a variety of international regulatory and enforcement schemes that can also be understood in administrative law terms. The final contributions to this section, by Matthias Ruffert (chapter 40) and Peter Lindseth (chapter 41), return to the question of the constitutional and administrative character of EU public law. Ruffert focuses on the question of the constitutional basis of EU administrative law rather than the character of EU law per se. He acknowledges the debate over that issue, as well as that over whether the EU actually has or needs a constitution. But he suggests that the debate can now be put by the wayside because ‘the hierarchical nature of the Union’s legal order’ is now generally accepted. The real challenge is dealing with the extraordinary complexity of EU administrative governance, which he summarizes in some detail. Lindseth would generally agree as to hierarchy and

3   Case C-270/12, United Kingdom v. European Parliament and Council (ESMA), [2014] 2 CMLR 44.

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Introduction  19 complexity but with one important caveat on the question of legal character. If the EU is, as Lindseth maintains, of an ultimately administrative character, then the primacy (or, in constitutionalist language, the ‘supremacy’) of EU law is not an absolute, certainly not as interpreted by the ECJ. Rather, the hierarchical character of the EU legal order should be understood only as a kind of functional ‘pre-commitment’ that is governed by ‘strong deference.’ This still allows national high courts, in extremis, to override the ECJ in the interest of the superior democratic and constitutional legitimacy on the national level.

CONCLUSIONS We have aimed for a broad coverage of contemporary themes in administrative law, especially those that raise similar issues in legal systems across the globe. We were pleased with the reception of the first edition of Comparative Administrative Law and hope that our new volume will have a similar impact. We have included both researchers at an early stage in their careers and more established scholars, and we have tried for coverage of a number of important legal systems. We hope that the questions that are posed here will help the field continue to grow in depth and coverage, and we urge others to further develop the important themes we introduce here in other contexts throughout the world.

NOTE The views expressed in this Introduction do not represent those of the Administrative Conference of the United States or the federal government of the United States.

REFERENCES Ackerman, J.M. (2010) ‘Understanding the Independent Accountability Agencies,’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, Cheltenham UK: Edward Elgar, 265–76. Cane, Peter (2016), Controlling Administrative Power: An Historical Comparison, Cambridge: Cambridge University Press. Kingsbury, Benedict, Nico Krisch, and Richard B. Stewart (2005), ‘The Emergence of Global Admimistrative Law,’ Law and Contemporary Problems, 68, 15–61. Landis, James (1938), The Administrative Process, New Haven, CT; London: Yale University Press; Oxford University Press. Lindseth, P.L. (2005), ‘“Always Embedded” Administration?: The Historical Evolution of Administrative Justice as an Aspect of Modern Governance,’ in Christian Joerges, Bo Stråth and Peter Wagner (eds), The Economy as a Polity: The Political Constitution of Contemporary Capitalism, London: UCL Press. Lindseth, P.L. (2010), Power and Legitimacy: Reconciling Europe and the Nation-State, Oxford; New York: Oxford University Press. Lindseth, P.L. (2017), ‘Between the “Real” and the “Right”: Explorations Along the InstitutionalConstitutional Frontier,’ in Maurice Adams, Ernst Hirsch Ballin, and Anne Meuwese (eds), Constitutionalism and the Rule of Law: Bridging Idealism and Realism, Cambridge, UK: Cambridge University Press. Majone, G. (2001), ‘Two Logics of Delegation: Agency and Fiduciary Relations in EU Governance,’ European Union Politics, 2(1), 103–22. March, James G., and John P. Olsen (1989), Rediscovering Institutions: The Organizational Basis of Politics, New York: Free Press. March, James G., and John P. Olsen (1998), The Instiutional Dynamics of International Political Orders, International Organization 52, 943–69.

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20  Comparative administrative law North, Douglass C. (1990), Institutions, Institutional Change and Economic Performance, New York: Cambridge University Press. Rose-Ackerman, Susan (1992), Rethinking the Progressive Agenda, New York: Free Press. Rose-Ackerman, Susan (2005), From Elections to Democracy: Building Accountable Government in Hungary and Poland, Cambridge UK: Cambridge University Press. Rose-Ackerman, Susan (ed.) (2007), ‘Economics of Administrative Law,’ in R.A. Posner and F. Parisi (eds), Economics Approaches to Law vol. 15, Cheltenham UK: Edward Elgar. Strauss, Peter L. (2016), Administrative Justice in the United States, 3rd ed., Durham, NC: Carolina Academic Press. Sunstein, Cass (2002), Risk and Reason, Cambridge UK: Cambridge University Press. Vivien, Alexandre-François (1852), Etudes administratives, 2d. ed., Paris: Guillaumin.

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PART I CONSTITUTIONAL STRUCTURE AND ADMINISTRATIVE LAW: TRADITIONS AND TRANSFORMATIONS

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1.  Révolution, Rechtsstaat and the Rule of Law: historical reflections on the emergence and development of administrative law Bernardo Sordi

The historical origins and evolution of administrative law continues to be a controversial issue. While some scholars identify a strong continuity between pre-modern and contemporary reality (Mestre 1985; Craig 2015), other interpretations emphasize a fundamental rift in the eighteenth century: with the displacement of the Ancien Régime by the French Revolution, jurists for the first time defined a conception of ‘administrative law,’ distinguishing administrative bodies, functions and duties from those of the judiciary (Mannori-Sordi, 2001; 2009). This chapter pursues the second interpretation. Without denying certain hidden continuities, it explores the discontinuity of language, terminology, and concepts that was most clearly marked between the end of the eighteenth century and the start of the nineteenth. It is worth noting that the terms administration publique and bureaucratie make their appearance in France around the mid-eighteenth century; the term droit administratif is confirmed only in the first years of the nineteenth century. With the end of the eighteenth century, a complex comparative legal history began. The terminologies and the contents of the ‘administrative’ legal universe were not identical across jurisdictions, nor did the different national experiences take place with the same chronology. The descriptive terms Rechtsstaat, État de droit, and Rule of Law were coined in legalpolitical thought to describe the new structures of public power. These concepts are not immediately equivalent to each other, and for a long time they maintained important traits of individuality. This chapter aims to briefly reconstruct their development, presuming that the emergence of the administrative power and of a law defined as administrative is an intrinsically modern problem, that cannot be dated back to before the end of the eighteenth century. It traces the broad contours of the administrative law of France, Germany, England, and, later, the United States through the mid-twentieth century.

1.  RÉVOLUTION: THE FRACTURE LINE AT THE ORIGIN OF ADMINISTRATIVE MODERNITY IN EUROPE At least since the publication of Tocqueville’s 1856 masterpiece, L’Ancien Régime et la Révolution, scholars have raised questions about the continuity or discontinuity across the divide marked by 1789. In one of his most famous passages, Tocqueville himself asked whether Richelieu would have been pleased with ‘the new order of things’ emerging in the first year of the Revolution (Tocqueville 1969: 96). To what extent did the administrative inheritance of the ancien régime continue to condition institutional and legal decisions throughout the Revolutionary decade and after? At what point do state functions become 23 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 23

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24  Comparative administrative law broadly perceived as ‘administrative’, separated from other forms of public power, like defence and public order? To mark the emergence of administrative power as such, we have nothing comparable to the seemingly precise dates in history (for example, during the American or French Revolutions) when a ‘constituent’ power – the ‘nation’, or the ‘people’ – purported to abrogate a constitution ancienne, proclaiming the principle of legal equality in place of centuries-old hierarchies and corporatist distinctions. We also have nothing comparable to the adoption of a new code civil that, in much of continental Europe at least, created a new legal order able to unify the old legal pluralism. The emergence of administrative power, which was closely followed by that of administrative law, unfolded over a longer time span, which undoubtedly included the Revolutionary decade and a good portion of the Napoleonic era. However, administrative power could not separate itself so sharply from its roots under the ancien régime. Indeed, at the end of the seventeenth century, an ancien régime jurist like Jean Domat could classify public powers in a triad of justice, police, finance (Domat 1756: II, I, I, 15, p. 151), symbolizing the growing complexity of the absolute monarchy and the first significant imposition of sovereignty over corporatist society. Administrative power and law, therefore, undoubtedly have an ancient soul, deeply bound up with the capacity of political absolutism to govern. And yet, in the legal universe of the ancien régime, the power of command generally remained firmly in the hands of ordinary judicial jurisdictions. Governance in old Europe was very much juridictionnel – that is, tied to the vast array of adjudicative bodies – even as the bureaucratic apparatus of the emergent absolute monarchies expanded. This situ­ ation eventually gave rise to a political and legal dialectic between justice and what would, by the mid-1700s, come to be defined as administration publique. New forms of gouvernamentalité (Foucault 1994) or arts de gouverner (Senellart 1995) emerged in the eighteenth century, marked by an intense and completely new regulatory attention to the population and the territory as a whole. The Revolution of 1789 therefore did not so much invent but rather catalyze administration publique. It reformulated institutional and conceptual materials that had been developing since at least the middle of the seventeenth century. But in breaking definitively and abruptly with the old corporatist order, the French Revolution also marked a critically important fracture line. The Revolution radically overturned the organization, functions, and conceptual-legal vocabulary of the old regime. ‘The gigantic broom of the French Revolution’, as Marx called it (1973: 218), also operated with great intensity on the terrain of administration, marking an irreversible point of no return. Innovations in social and political organization – most importantly the abolition of corporate bodies and the creation of a single class of citizens – loom large in our analysis: As Tocqueville put it, ‘equality facilitates the exercise of power’ (1969: 98). In the place of the old corporate order, an enormous empty space emerged between the state and the individual citizen, artificially conceived as isolated. The Assemblée Constituant replaced the old institutional patchwork of gothic overlaps with an ordered, thorough, and hierarchical pyramid of districts and apparatuses, seemingly geometrical in their dimension, organization and function. The old société de sociétés (Portalis 1999: 14) disappeared for good. The state conquered the centre of power once and for all, and became the exclusive artificer of the legal and institutional order.

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Révolution, Rechtsstaat and the Rule of Law  25 The composite monarchy of the past, with its heavy reliance on corporatist adjudication, would make way for a machine-state with its own institutional capacities, pursuing its own tasks and its own interests. Political obligation became simpler: henceforth, the institutional map encompassed only two figures, that of the state, on one hand, and that of the citizen, on the other, which occupied and shared the political space. It is at this point that one sees the birth of ‘administration’ in a modern sense. The separation of powers was proclaimed generically in article 16 of the Declaration of Rights of Man, and was first articulated functionally and organizationally in the decree concerning the institution of primary assemblies and administrative assemblies of December 22, 1789. The institutionalization of the separation of powers continued throughout the Revolutionary and Imperial periods, with the law of August 16–24, 1790 prohibiting ­ordinary judicial courts from reviewing administrative acts, the first regulations attributing jurisdiction of the affaires contentieuses to the administration and, lastly, the law of 28 Pluviôse, Year VIII (February 17, 1800) concerning the division of French territory and the administration. Each of these acts helped to shape the specificity and subjectivity of administration as a separate and distinct form of public power. Parallel to this new manner of exercising sovereign power, which the Revolution defined as administrative, a new manner of describing and conceptualizing public power took hold, radically different from the old notions. The French Revolution went beyond a simple constitutional acknowledgement of the public rights of an administrative power that had existed since the formation of the modern state. This traditional nineteenthcentury reading of the transformation of the Polizeistaat into the Rechtsstaat (something we take up in the next section) did not fully grasp how the exercise of sovereignty led to the suppression of corporate society and did not adequately capture the monopolistic concentration of public tasks into the hands of the state. ‘Administrative power’ and ­‘administrative law’ emerged contemporaneously. The shift from corporatist society to liberal society required a machine state with the ‘rapidité du fluide électrique’ (Chaptal 1800). It also required the invention of new institutional and legal guarantees – first and foremost, administrative justice. Finally, it entailed a new dialectic between centre and periphery, seeking legal uniformity and control, while also allowing for decentralized spaces. However one chooses to interpret the link between the ancien régime inheritance and the revolutionary innovations, the new juridical discipline of administrative law makes its first appearance on the continent in the strategic passage out of the late eighteenth century. It then fully unfolds in the nineteenth century, which throughout Europe becomes ‘the century of administration (Verwaltung) and of the emergence of administrative law (Verwaltungsrecht)’ (Stolleis 1992: 229). But it was France, during the Napoleonic era, that marked the definitive emergence of droit administratif, with the birth of the contentieux administratif and the new regime of administrative acts. Justice and administration were firmly divided and separated: juger l’administration c’est encore administrer (‘to judge the administration is still to ­administer’). For the ordinary courts, judicial review of the administrative action was impossible: the ordinary judge could only adjudicate civil and criminal cases. A centralized administration, endowed with its own adjudicative capacities, guided and controlled a country that Tocqueville described as an equal surface. Modernity henceforth had the unmistakable seal of administration.

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26  Comparative administrative law In the classical declination of the separation of powers by Montesquieu, distinguishing between ‘the executive with respect to things dependent on the law of nations’ (peace, war, diplomacy) and ‘the executive in regard to matters that depend on the civil law’, or rather civil and penal jurisdiction (Montesquieu 1914: XI, 6), a subject of a new type interposed itself between ‘the general order of the state’ and jurisdiction, labelled for the first time as administration générale de l’État. This new subject assumed the multitude of regulatory tasks that the prince and the corporate bodies of the ancien régime had previously divided between them. Administrative power and law now appeared on the continent as irreplaceable pilasters of the entire liberal society: ‘une des formes de l’État nouveau du monde; nous l’appelons le système français; c’est le système moderne qu’il faut dire’ (Tocqueville 1866: 73).

2.  RECHTSSTAAT: THE GERMAN CONCEPTUAL CONTRIBUTION AND THE LEGAL LIMITS OF ADMINISTRATIVE POWER Even in countries like Prussia and Austria, which were seemingly immune from the French revolutionary events, there were pressures toward the development of administration and administrative law. Rather than abrupt revolutionary shifts, however, Prussia and Austria witnessed the slow advance of reforms. As in France, these reforms began in the mideighteenth century and gathered momentum in the context of the Napoleonic wars. But unlike France, there were no clear constitutional ruptures, no overthrow of the existing corporate order. On the level of legal language, the transformation was also less pronounced: for decades, the new language of administrative law continued to coexist with older conceptual terms and traditions, first and foremost the eighteenth-century notion of Polizeiwissenschaft (Police Science). Once the idea of administration as a power of the state over society gained widespread acceptance, the European continent witnessed a profound reconsideration of the nature of political obligation, which became centred on the state-citizen relationship and the authority-freedom dialectic. A new theme emerged, that of legal guarantees for society and for the individual. The end of the Revolution indeed left a formidable administrative machine on the institutional landscape, endowed with a vast and unprecedented number of imperative powers to dispose of the properties and freedom of private parties. Administration emerged as a strategic support of an atomized and dispersed society suddenly deprived of its centuries-old corporative ties. But, at the same time it emerged as a pressing danger for individual rights. Nineteenth-century administration served as both a condition for, and a menace to, the freedom of the moderns. It became necessary to define legal limits and guarantees within the confines of a system of administrative ‘justice’ worthy of the name and to develop means whereby liberal society could defend itself against the absolutely unprecedented concentration of public powers. Political freedom certainly did not exclude administrative despotism. On the contrary, as Tocqueville observed in Démocratie en Amérique (with a pinch of regret for the pluralist order displaced by the Révolution), it is precisely ‘those democratic peoples which have introduced freedom in the sphere of politics’ who also increased ‘despotism in the administrative sphere’ (Tocqueville 1994: 694).

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Révolution, Rechtsstaat and the Rule of Law  27 Much of nineteenth-century legal development, at least in the realm of administration, focused on checking powers, functions and offices. Drastic amputations of responsibilities and functions were felt necessary; new balances between centre and periphery were understood to be needed to temper the unbearable administrative c­entralism; and substantial restitutions to the social sphere were urged, mostly in vain, in order to escape the providential crutches of the state. Calls for decentralization were recurrent in liberal European society from the 1830s onward. There was a palpable desire to re-establish relationships between society, territory, and public power that were less artificial and mechanical than in the Napoleonic era, and therefore more solid and profound. Concerns were less about the lack of democratic control than about the administration’s seeming separateness from society, most importantly from the influence of local notables. Adding to the atmosphere of liberal anxiety was the rise of the ‘social question’ – the increasing tensions between the working classes and the bourgeoisie in a period of industrialization and urbanization – which made itself felt both in the revolutions of 1848, and then later in the Paris Commune of 1871, posing a challenge to the precarious liberal hegemony. The inexorable development of administrative power captured the attention of jurists and politicians. Old representations of power were set aside; new typological models emerged. Most importantly, continental jurists developed the idea of the Rechtsstaat (Stolleis 1982), a new theoretical lemma which originated in German doctrine but rapidly found equivalent expressions in other continental European legal languages (Stato di diritto, État de droit, Estado de derecho). This typological model sought to reconcile the new ‘laws of freedom’ (Kant 1991: 129) with the eclipse of the judicial regimes of the old order and the full deployment of state sovereignty through administrative power that emerged in the Revolutionary and Napoleonic eras. In German legal culture, from Kant to Mohl, from Stahl to Gerber, from Hegel to Stein, from Bähr to Gneist (Stolleis 1992) – indeed, in continental legal culture as a whole – the Rechtsstaat expressed both the new demand for guarantees as well as the acknowledgment of the irrevocable transform­ ations since the end of the eighteenth century. The goal was to circumscribe the enormous power that executive administrations had conquered with the French Revolution and the Napoleonic era. The notion of Rechtsstaat sought to reconcile the ‘freedom of the state’ with that of the citizen; it attempted to make the primacy of the administration compatible with the respect for individual guarantees. It reflected the broadly accepted idea that power and freedom developed symbiotically. The Rechtsstaat was thus never conceptualized as a spontaneous, natural order, pre-existent to power. On the contrary, rights would cohabit with a sovereignty personified by the centrality of legislation, which became the principal guarantee of rights. Hence the increasing importance of the principle of legality in Verwaltungsrecht: from this moment onward, the prerequisite for every manifestation of authority was the legal source. It was therefore the task of nineteenth-century legal doctrine to conceptualize administration both as a power and as a field needing legal limits. Administrative legality came to be understood as an essential guarantee of freedom. As numerous commentators reiterated in different national contexts over the course of the nineteenth century, from Barthold Georg Niebuhr to Rudolf von Gneist to Silvio Spaventa, up to the American Woodrow Wilson: ‘liberty depends incomparably more upon administration than upon

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28  Comparative administrative law constitution’ (Wilson 1887: 211). This was a significant affirmation. On one hand, it pointed to the fact that, in Europe at least, constitutional review of legislation was still a distant goal. On the other hand, it suggested that it was in the administrative context, where the construction of power was strongest and most incisive, that the provision of efficient guarantees of rights was perceived as the most urgent task. Legal control of administrative action became the banner of the century: in the administrative universe, power and freedom did indeed advance hand in hand. It was precisely in this search for a kind of judicial review of administrative action that the ideal of the Rechtsstaat acted as a force for institutional modernization. Administrative justice stood as a guarantee of legality, as a mechanism to ensure the administration’s conformity to the law. But because administrative action was immune from the control of the ordinary courts, administrative justice would not, strictly speaking, entail ‘judicial review’. Rather, the continental interpretation of the separation of powers required the establishment of a new, specifically ‘administrative’ judge, one who was often organically attached to the executive (as with the French Conseil d’Etat), or at least separate from the ordinary courts. In short, we can say that the continental model of the Rechtsstaat entailed three fundamental elements: the supremacy of the legislative power, the existence of a strong administrative power, and the existence of a special judge for administrative matters.

3. RULE OF LAW: THE ANGLO-AMERICAN VARIANT IN THE LAW OF ADMINISTRATION At first glance, the English path diverged sharply from the continental route, whether measured by the abrupt changes engendered by the French Revolution, or the slow progression of reforms in the Austrian-German context. Instead, the English process of constitutional modernization was much older, the process of displacing corporative plur­ alism in favour of a more individualist order was slower and arguably less painful, and the primacy of Parliament was more deeply rooted and undisputed. The construction of a modern public authority thus proceeded in parallel rather than in conflict with the expansion of political participation, which conserved and transformed, but did not deny, the old pluralism of freedoms. Thus, the pre-eminent vocation of the state could still be that of mediating between divergent interests rather than that of expressing unitary values. ‘Justice’ associated with the common law courts, rather than absolutist ‘administration’, remained central. English administrative development can be traced to distinctive features of its law and culture: ‘the importance given to institutional continuity within the common law habit of thinking’ was essential to the ‘Whig fundamentalism’ that was by far the prevailing interpretation of English constitutionalism, expressing the ‘high degree of cohesion within the governing class’ (Loughlin 2009: 156, 163). As a consequence, England did not exhibit the same fracture lines that were taking shape in continental history. The peculiarities of the English state, on one hand, combined with a very resistant way of thinking, on the other, represented an insurmountable barrier to the development of an administrative apparatus on the continental model. The old and traditional judicial model for the exercise of public power did not lend itself to radical transformation; moreover, there was

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Révolution, Rechtsstaat and the Rule of Law  29 no similar lexical revolution in England as occurred on the continent with the end of the eighteenth century. And yet, in England too, the nineteenth century saw an administrative space progressively take root, prompted by the demands and problems that exploded with the Industrial Revolution. This space emerged gradually, in a perhaps confused and disorderly manner, in response to specific and concrete problems posed by a rapid urbanization, the emergence of the social question, and the need to regulate the socio-economic relations that broke sharply with the past (reflected on the constitutional level in the increasingly more insistent pressures to extend suffrage). Case by case, through a process of learning by experience, an administrative apparatus developed, which focused variously on the regulation of work, railways, health, public education, and poor relief. Thus, in England too, ‘administration’ – even if not understood in a continental sense – began to flank the trad­ itional judicial apparatus. ‘The great body of such changes were natural answers to concrete day-to-day problems, pressed eventually to the surface by the sheer exigencies of the case’ (MacDonagh 1958: 65). Built either by statute or by the shift of regulatory authority to the executive (‘delegated legislation’), England saw the creation of a broader network of administrative authorities holding executive prerogatives and discretionary powers. The appearance of a functionally driven and unplanned administrative centralization, with the institution of the first boards and central departments, as well as the birth of administrative forms of adjudication beyond the purview of the common law courts, increasingly displaced Parliament as the hinge between central and local government, and complicated the traditional judicial model of the exercise of public power. Nevertheless, these developments did not impose an epochal change in the state organization or the adoption of new legal categories comparable to the French administration publique or to the Staatsgewalt of the German tradition. Instead, they were generally regarded as exceptional, inserted among the consolidated principles of common law governance. Even local government in England, though heavily influenced since the early Victorian age by the profound functional transformations affecting both state and society more generally, conserved features of strong continuity with the previous territorial constitution. England gradually grafted administrative innovations onto the fabric of common law, updating but not altering the furrow of tradition and the relative conceptual universe. Most importantly, England did not establish a specifically ‘administrative’ judge whose constitutional function would be to defend administrative prerogatives. It was thus unnecessary to alter the traditional way of thinking, which regarded the common law courts as the pre-eminent defenders of the ‘Rule of Law’, to which all litigants, including the executive, had to submit. Indeed, in nineteenth-century England, the very idea of the Rule of Law emerged in legal scholarship explicitly to delimit administrative powers analogous to those of the continent. In this, the idea of the Rule of Law shared much with the Rechtsstaat: both sought to reconcile state sovereignty with the need for legal guarantees of individual rights, and both acknowledged a general presumption of freedom, as well as the primacy of individual property. Indeed, both the Rechtsstaat and the Rule of Law acknowledged the pre-eminence of legislation: in the first case, as the expression of the sovereignty of the state, and in the second as the expression of ‘Parliamentary Sovereignty’ – ‘the sovereign and uncontrollable authority’ of Parliament, as Blackstone had long before put it (Blackstone 1884: 159). Finally, both reflected considerable prudence towards what appeared to be a dangerous democratic drift, certainly in terms of

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30  Comparative administrative law the generalization of political rights, but also in terms of social rights, the development of which remained far in the future. Strong divergences remained, however. The continental concept of Rechtsstaat referred to a state that stood above society, instituting and rationalizing the social sphere, privil­ eging legislative over customary law, entrusting absolute centrality to codification. The Rechtsstaat was also a markedly administrative state, as we have seen, manifesting this axiom in continental legal science: ‘one can conceive of a despot who governs without laws and without judges, but a State without an administration would be anarchy’ (Jellinek 1914: 612; and see the bitter objections of Kelsen 1968a: 2, 1647). On the continent, the centrality of administration translated into the idea that the administrative sphere expressed the very essence and continuity of the state’s sovereignty. It did so on the level of organization, by means of centralized administrative control of the periphery. It did so on the level of law, through the regime of the acte administratif and justice administrative, which prevailed in the face of contrary claims of common law and judicial authority exercised by the ordinary courts. The Rule of Law in England, by contrast, confirmed itself as a purely and typically judicial regime in which there had to be a compromise between the omnipotence of Parliament, though formally acknowledged, and the substantial intangibility of the ‘common law of the land’, in which the execution of the law and respect for common law rights was still essentially the duty of the jurisdictional function. As a consequence, an administrative sphere distinct from the legislative and the judicial powers, one capable of affecting the rights of citizens, encountered a number of legal-conceptual obstacles in its struggle to emerge. It was no coincidence that only in the English milieu did the common law courts succeed in monopolizing (at least well into the twentieth century) the forms of judicial defence before public power, preserving the unity of jurisdiction. On the organizational level, the greater weight of local government, with its separate functionaries, duties, and financial autonomy, along with a persistent non-bureaucratic ideal of self-government, drastically marked the limits of the dimensions and activity of the central administration and delayed the bureaucratization of the civil service. This explains why, from John Stuart Mill to Walter Bagehot, nineteenth-century commentators classified the English system as a non-bureaucratic order, viewing bureaucracy as a typically continental creature. Even in the late nineteenth century, when the gap between the continental administrative regime and the persistent English judicial regime closed considerably, Dicey ‘emphasized, not the state, but the “ordinary law” applied by the “ordinary law courts”’ as the cornerstone of the English system (Allison 1996: 72). Dicey expressly based his understanding of the English constitution on what he discerned as the three founding principles of the Rule of Law: first, ‘the absolute supremacy or predominance of regular law as opposed to the influence of arbitrary power’, which excludes ‘the existence of arbitrariness, of prerogative, or even of wide discretionary authority on the part of the government’; second, the ‘universal subjection of all classes to one law administered by the ordinary courts’; and finally, the preservation of ‘the rights of individuals’ via the negation of any droit administratif in England (Dicey 1959: part 2, chapters 4 and 12). The historian F.W. Maitland was considerably more cognizant than Dicey of the increasingly administrative character of Victorian governance (Maitland 1908: 505); nevertheless, he too reaffirmed the English divergence from the path of the Rechtsstaat, which consisted primarily in the absence of bureaucratization comparable to that on the continent. According to Maitland, in

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Révolution, Rechtsstaat and the Rule of Law  31 England ‘we have no practical experience of a Polizeistaat or Beamtenstaat’ (1987: XLIII). Continental jurists, by contrast, unvaryingly conjugated the Rechtsstaat with the existence of a system of separate administrative judges, now recognized as the cornerstone of the administrative regime. In the most famous handbook of administrative law of Wilhelmine Germany, Otto Mayer could thus identify the Rechtsstaat precisely with the state having ‘a well-ordered administrative law’ (Mayer 1924: vol. 1, 58). Even in England, however, by the end of the nineteenth century, the progress toward an ‘administrative law’ worthy of the name was a reality that observers found increasingly hard to ignore as a consequence of intense functional pressures on the state. As Woodrow Wilson put it in 1887, in terms that applied equally well to the English case: ‘the functions of government are becoming every day more complex and difficult; they are also vastly multiplying in number’ (Wilson 1887: 200). England, like its common law confrère across the Atlantic, was quickly filling the ‘hole’ in the constitution where administration might have been (Mashaw 2012: 30), as a consequence of nearly a century of institutional and regulatory experimentalism. Like Wilson, Maitland also saw that ‘year by year the subordinate government of England was becoming more and more important’ (Maitland 1908: 501). Dicey himself, in 1915, with an essay of unequivocal title, The Development of Administrative Law, acknowledged the emergence of a distinct legal regime (Dicey 1915).

4.  RECHTSSTAAT AND THE RULE OF LAW FACED WITH STATE INTERVENTIONISM At the beginning of the twentieth century, the previously distinct and different traditions of Rechtsstaat and the Rule of Law seemed to finally converge onto common and shared paths. Frank Goodnow, an American legal scholar who had studied administrative law in Berlin with Rudolf von Gneist, diagnosed this development. In Comparative Administrative Law (1893), he described a common juridical world based on the universality of administrative law. His opinion represents an absolutely opposite point of view to that of Dicey: ‘the general failure in England and the United States to recognize an administrative law is really due, not to the non-existence in these countries of this branch of the law but rather to the well-known failure of English law writers to classify the law’ (Goodnow 1893: 6–7). But had administrative law already managed to secure an unquestionably global dimension, reuniting legal language and institutions, previously marked by an unmistakeably national character? If the position expressed by Dicey in 1885 and his peremptory denial of the existence in England of administrative law was largely based on an erroneous representation of the reality of the situation in England, Goodnow’s position was no less so. In the pages of Comparative Administrative Law we witness a mechanical transplant of the German nineteenth-century theory of law and state into the common law world. Concepts, notions and definitions were imported directly from Germany and France. This is particularly evident with reference to three basic conceptual topics, alien to the Anglo-American mentality: the idea that administration represents the very essence of the state; the sharp distinction (a real conceptual divide) between public and private law and between administrative powers and judicial powers; and finally, the inherent public law nature of administrative law.

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32  Comparative administrative law Dicey’s negationist interpretation was as false as Goodnow’s idea of a natural convergence towards administrative law in continental Europe and the Anglo-American countries. On one hand, the noble lie of the Rule of Law; on the other hand, the noble lie of the universality of the German Rechtsstaat, in its typical declination based on the primacy of public administration. In other words, the idea that the Rule of Law would not permit the existence of a droit administratif was undoubtedly an ideological one, but so was the theory of convergence toward a common administrative system under the German theory of law and state. Only in interwar Western Europe did a real convergence emerge between the two different mentalities. Faced with state interventionism and the development of the welfare state, legal scholars were finally pushed and encouraged to update their traditional jurid­ ical way of thinking. The Weimar Constitution of 1919 epitomizes this shift of mentality. Social rights and ‘life of the economy’ became part of the constitutional framework. Social and economic democracy complicated the catalogue of civil rights. Public interest invested private law with a growing focus on production and economic organization. New juridical sectors acquired a new disciplinary autonomy such as the public law of economy, taxation law and labour law. However, the problem was not exclusively German. On the contrary, the same shift from the liberal state to the welfare state was seen throughout Europe after World War I. The state’s entrance into the economy was a generalized phenomenon in the Western world, caused by the influence of the war economy, the technological revolution, the impact of social conflict rekindled by the Russian Revolution, and by the financial i­nstability that  would explode with the world crisis of 1929. The liberal strategy of ­devolving the regulation of the economy to society was replaced by the state-regulated economy. In the French Third Republic, Maurice Hauriou and Léon Duguit pointed out the great transformations of sovereignty already underway in the last decade of the nineteenth century. Before the First World War, in French juridical culture, la puissance publique – ‘the administration as the representative of the sovereign’ in Goodnow’s words (Goodnow 1893: 11) – was already flanked by another form of public activity, the principal function of which became that of ‘giving satisfaction to the mass of elementary needs’ (Duguit 1913: XVII). The French École du service public was the first to describe the unprecedented level of social and co-operative activity and the new dimension of service provision. Duguit in particular, according to the sociological inquiry of Emile Durkheim, developed a frame of general theory capable of depicting the strong growth of public tasks. Hans Kelsen, the founder of the School of Vienna and one of the founding fathers of the Austrian Constitution in 1920, starting from a different theoretical basis, discovered the state of direct administration and distributive justice: ‘the state that goes into action’ (Kelsen 1968b). In German legal culture, Ernst Forsthoff and Ernst Rudolf Huber, two young legal scholars educated in the school of Carl Schmitt, developed a public law of the state economy and an administrative law of the public services during the 30s, between the Weimar Republic and the Nazi regime. For these two thinkers, attention to the relevant modernizations which began in the performance of public functions with the First World War led to totalitarian tendencies. The period of economic interventionism transverses the various political regimes. England, too, is marked by the spirit of the time. The End of Laissez Faire was published

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Révolution, Rechtsstaat and the Rule of Law  33 by John Maynard Keynes in 1926. Only one year before, in A Grammar of Politics, Harold Laski – a follower of Duguit’s thought and the translator into English of his masterpiece, Law in the Modern State – defined the state as a ‘public service corporation’ whose activity unfolds toward the realization of a new economic and social democracy (Laski 1925). Already in October 1927, in the introduction to the first edition of Justice and Administrative Law, William Robson was able to conclude on the basis of a specific jurid­ ical approach in the following way: There can be no doubt that the rise of Administrative Law is mainly due to the vast extension in the work of government which has taken place in England during the past few decades, and to the rapid increase in power of the executive which has accompanied that extension. The trad­ itional Court system, in which isolated individuals contest disputed rights of property or person, has been superseded by an entirely new type of judicial process so far as concerns controversies arising in connection with the new social services undertaken by the State (Robson 1928: XXX).

The different traditions of Rechtsstaat and Rule of Law thus started to converge in Europe for the first time; and they converged toward the depiction of a new social service state. From the continental legal scholars to the interdisciplinary English group at the London School of Economics (from Beveridge to Laski, from Robson to Jennings), administrative law marked out new boundaries between authority and individual rights, ‘furthering a policy of social improvement’ (Robson 1928: 438). The way to comparison was finally opened, notwithstanding ‘the lurid journalism’ (Frankfurter 1930: 157) of Lord Hewart and his infamous 1929 diatribe, The New Despotism (Lindseth 2005). Despite the persist­ ent Dicey-based rhetoric therefore, even in England ‘the State either through the central government or the local authorities, has “gone into business”’ (Robson 1928: 443). In the United States during the same years, the functions of the government were growing, driven by the needs of the second industrial revolution and the social question. A modern regulatory state was developing, able to accommodate the demands of modern society upon government and the growing ‘interplay of economic enterprise and government’ (Frankfurter 1930: 1–2). Thus, even in America ‘those simple days’ (Frankfurter 1930: 19) of limited government seemed far off now, symptoms of a nineteenth-century world: a world far away, marked by elementary needs and limited public functions. Anticipated by the late nineteenth century creation of administrative agencies, Roosevelt’s New Deal, with its political target of ‘Freedom from Want,’ seemed to follow a path in some respects similar to that of the European countries. The ‘administrative oversight’ of ‘public utilities’ and ‘interstate public services’ (Frankfurter 1930: 83–5) grew to the point where it was considered that even across the Atlantic, because of the increasing subjection of private enterprises to ‘the fostering guardianship of the state’, the ‘laissez faire came to an end’ (Landis 1938: 14, 8). Even in a constitutional system like the American one which, in its classic eighteenthcentury form left no space for a ‘fourth branch of Government,’ ‘the rise of administrative process’ could now appear ‘by all odds the most significant development in legal history in the last century’ (Landis 1940: 1078). The United States, therefore, joined the mainstream and saw, between the two World Wars, a sudden acceleration. With ‘The Growth of Administrative Power’, ‘the difference between Anglo-American and French and Continental Law diminishes’ (Freund 1923:

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34  Comparative administrative law 15–16). However, significant differences remain between the American and the European path. Above all, in the United States, ‘the struggle for administrative legitimacy’ (Kessler 2016: 718) was far from resolved by the outbreak of World War II. The great conflict between the New Deal coalition and the Supreme Court reflected, but in certain terms even surpassed, the political and economic struggles of the time (Ernst 2014). It was rooted in the eighteenth-century constitutional framework and the objective difficulty of the quest to normalize the administrative government within a consolidated balance of powers that seemed to exclude a truly administrative function. This classical liberal constitutional framework expressed a system of judicial review firmly entrusted to courts of general jurisdiction. It was based on property rights and economic rights, conceived by the seventeenth and eighteenth century Law of Nature, which in Europe were progressively losing ground to the affirmation of social rights and the principle of the indivisibility of rights. In spite of the significant progress in social security in the Roosevelt years, ‘the United States remained a residual provider of welfare, preserving insurance-based benefits for particular groups deemed to be deserving and failed to develop major state service’ (Oxford Handbook of the Welfare State 2010: 7). The history of American administrative law can certainly be described as the ­‘occasional tilt’ between ‘progressive’ and ‘libertarian administrative law’ (Sunstein and Vermeule 2015: 473), a frequently recurring theme. The opposing ideological forces found in the 1946 Administrative Procedure Act (APA) a decisive point of compromise and equilibrium. As the ‘only general charter for judicial review of administrative action’, (Vermeule 2009: 1107) the APA has remained the cornerstone of federal administrative law, even as its meaning has evolved over time through judicial interpretation and in reaction to changing constellations of political power and ideology. After the war, with Truman’s Fair Deal, a solid reconciliation finally became possible between the culture of the lawyers, deeply rooted in common law and still loyal in its underlying principles to the version of Dicey’s Rule of Law, and the new managerial culture of the administrators of the New Deal. It is difficult, nevertheless, to think of anything similar on the European continent. What appeared to some as ‘Tocqueville’s Nightmare’ in America (Ernst 2014) took on in Europe the appearance of a reassuring Etat providence, a welfare state, an Etat gestionnaire which was willing to take charge of an increasing number of social needs, widely accepted and increasingly present in the daily lives of European citizens. The common spirit of the time, for the whole Western universe, does not translate immediately into a set of institutions fully in tune with one another. The question of legal guarantees for administrative actions on the continent was primarily an issue in the nineteenth century, undergoing a phase of only gradual adjustment between the two World Wars. There were few great changes, even in the German and Italian totalitarian system or in Vichy France. In the United States, on the contrary, judicial review was central to the American path in the first half of the twentieth century, due to contests over its scope of application and the content and intensity of the control over administrative action. Precisely because of this control function, doctrines of judicial review became the main instrument for refining a now consolidated administrative law. In Europe the issues of the administrative organization instead became absolutely central. Alongside authorities exercising the traditional puissance publique, and bodies carrying out the new tasks of service public, public corporations emerged, which were

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Révolution, Rechtsstaat and the Rule of Law  35 wielded by the öffentliche Hand (public Hand) but performed exclusively commercial activities. This is a further element of difference compared to the American path. The second industrial revolution in Europe was possible only due to direct state intervention in the economy. The state took action and intervened directly, as an economic player, in the market equilibrium. Even the services of economic interest were (or soon became) public services. The term ‘public’ should be interpreted not only in the sense that they must serve a general pool of users, as a universal service, but also because it refers to services performed by the state (or in any case by the public administration or by private enterprises under government concessions). Similar examples of public interventionism soon involved the banking and insurance sectors and even quite a few manufacturing sectors, especially in the field of heavy industry. The state that made inroads on the continent in the nineteenth and twentieth century was at the same time an Etat Providence and an entrepreneurial state.

CONCLUSION The English and continental developments in administrative law reflect different starting points, paths and conceptions of legitimate governance that can be traced at least to the end of the eighteenth century. Only at the beginning of the twentieth century does the vocabulary start to become uniform. The content instead, again during the period between the two World Wars, continues to reflect the varying constitutional and government architectures and national experiences. The equilibrium between public and private, in particular, is very different on the two sides of the Atlantic. In this sense, Dicey’s famous 1915 definition was correct: ‘a body of administrative law resembling in spirit, though certainly by no means identical with the administrative law (droit administratif) . . . of France’ could no longer be denied in England (1915, 148) (emphasis added), or in the United States. It is only over the last several decades that we have witnessed an increasing effort to definitely reconcile continental and common law traditions. Droit administratif has narrowed its radius of application, while also rediscovering judicial and procedural outlooks of a seemingly more Anglo-American character. In place of administration based on the idea of service public, one sees increased regulation and privatization. On the other hand, Anglo-American administrative law has increasingly distanced itself from its common law underpinnings, focusing instead on the prerogatives of general regulatory power in the face of social change. Globalization and the persistent economic crisis have further focused the attention of jurists on the still extremely fragmentary answers to global economic, political, and regulatory problems. Today, all administrative traditions face the same challenge: to offer global answers to problems of the public regulation of markets and society that now often transcend the borders of nation-states in which the particular traditions of administrative law developed.

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36  Comparative administrative law

REFERENCES Allison, John W.F. 1996. A Continental Distinction in the Common Law: A Historical and Comparative Perspective on English Public Law. Oxford: Oxford University Press. Blackstone, William. 1884. Commentaries on the Laws of England (1st ed. 1765). Chicago: Callaghan. Chaptal, Jean-Antoine. 1800. Corps législatif. Session du 28 pluviôse an VIII. Archives parlementaires, 2ème série, t.I, p. 230. Craig, Paul. 2015. UK, EU and Global Administrative Law. Foundations and Challenges. Cambridge: Cambridge University Press. Dicey, Albert Venn. 1915. The development of administrative law in England. Law Quarterly Review. 31: 148–53. Dicey, Albert Venn. 1959. Introduction to the Study of the Law of the Constitution. 10th ed. London: Macmillan (1st ed. 1885). Domat, Jean. 1756. Le droit public, suite des Loix civiles dans leur ordre naturel. In Domat, Jean. Les Loix civiles dans leurs ordres naturel; le droit public et Legum delectus. Vol. 2. Paris: Cavelier. Duguit, Léon. 1913. Les transformations du droit public. Paris: Colin. Ernst, Daniel R. 2014. Tocqueville’s Nightmare. The Administrative State Emerges in America, 1900–1940. Oxford: Oxford University Press. Foucault, Michel. 1994. La gouvernementalité. In Foucault, Dits et ècrits 1954–1988, vol. 3, 1976–1979. Paris: Gallimard, 635–57. Frankfurter, Felix. 1930. The Public and its Government. New Haven and London: Yale University Press. Freund, Ernst. 1923. Historical Survey. In The Growth of American Administrative Law (E. Freund, R.V. Fletcher, J.E. Davies, C.W. Pound, J.A. Kurtz, C. Nagel). St. Louis: Thomas Law Book Company, 9–41. Goodnow, Frank J. 1893. Comparative Administrative Law. An Analysis of the Administrative Systems National and Local of the United States, England, France and Germany. New York-London: G.P. Putnam’s Sons. Jellinek, Georg. 1914. Allgemeine Staatslehre. 3rd ed. Berlin: Springer (1st ed. 1900). Kant, Immanuel. 1991. The Metaphysics of Morals. 1. The Doctrine of Right. Ed. by Mary Gregor. Cambridge: Cambridge University Press (1st ed. 1797). Kelsen, Hans. 1968a. Die Lehre von den drei Gewalten oder Funktionen des Staates (1st ed. 1923–24). In Die Wiener Rechtstheoretische Schule. Schriften von Hans Kelsen, Adolf Merkl, Alfred Verdross (edited by Hans Klecatsky, René Marcic, Herbert Schambeck), vol. 2. Wien: Europa, 1625–1660. Kelsen, Hans. 1968b. Justiz und Verwaltung (1st ed. 1929). In Die Wiener Rechtstheoretische Schule. Schriften von Hans Kelsen, Adolf Merkl, Alfred Verdross (edited by Hans Klecatsky, René Marcic, Herbert Schambeck), vol. 2. Wien: Europa, 1459–83. Kessler, Jeremy K. 2016. The struggle for administrative legitimacy (book review Tocqueville’s Nightmare). Harvard Law Review. 129: 718–73. Keynes, John Maynard. 1926. The End of Laissez Faire. London: Hogarth Press. Landis, James. 1938. The Administrative Process. New Haven and London: Yale University Press. Landis, James. 1940. Crucial issues in administrative law. The Walter-Logan Bill. Harvard Law Review. 53: 1077–102. Laski, Harold J. 1925. A Grammar of Politics. London: Allen & Unwin. Lindseth, Peter. 2005. ‘Always embedded’ administration?: The historical evolution of administrative justice as an aspect of modern governance. In The Economy as a Polity: The Political Constitution of Contemporary Capitalism (edited by Christian Joerges, Bo Stråth and Peter Wagner). London: UCL Press. Loughlin, Martin. 2009. Why the history of English administrative law is not written. In A Simple Common Lawyer. Essays in Honour of Michael Taggart (edited by David Dyzenhaus, Murray Hunt, Grant Huscroft). Oxford and Portland: Hart, 151–73. MacDonagh, Oliver. 1958. The nineteenth-century revolution in government: a reappraisal. The Historical Journal. 1: 56–67. Maitland, Friedrich William. 1908. The Constitutional History of England. Cambridge: Cambridge University Press. Maitland, Friedrich William. 1987. Translator’s Introduction. In Otto von Gierke, Political Theories of the Middle Age. Cambridge: Cambridge University Press (1st ed. 1900), VII–XLV. Mannori, Luca and Sordi, Bernardo. 2001. Storia del diritto amministrativo. Rome-Bari: Laterza. Mannori, Luca and Sordi, Bernardo. 2009. Administration and Administrative Law. In A Treatise of Legal Philosophy and General Jurisprudence, vol. 9, A History of the Philosophy of Law in The Civil Law World 1600–1900 (edited by Damiano Canale, Paolo Grossi, Hasso Hofmann). Dordrecht: Springer, 225–61. Marx, Karl. 1973. The civil war in France. In K. Marx-F. Engels, Selected Works, Moscow, Progress, 178–243. Mashaw, Jerry L. 2012. Creating the Administrative Constitution: The Lost One Hundred Years of American Administrative Law. New Haven and London: Yale University Press.

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Révolution, Rechtsstaat and the Rule of Law  37 Mayer, Otto. 1924. Deutsches Verwaltungsrecht. 3rd ed. Berlin (Reprint Berlin 1961: Duncker & Humblot) (1st ed. 1895). Mestre, Jean-Louis. 1985. Introduction historique au droit administratif français, Paris PUF. Montesquieu, Charles de Secondat et de. 1914. The Spirit of Laws. Transl. T. Nugent and J.V. Prichard. London: G. Bell & Sons (electronic edition). Oxford Handbook of the Welfare State. 2010 (edited by F.G. Castles, S. Leibfried, J. Lewis, H. Obinger, C. Pierson). Oxford: Oxford University Press. Portalis, Jean-Etienne-Marie. 1999. Discours préliminaire du premier projet de Code civil. Paris: Confluences. Robson, William. 1928. Justice and Administrative Law. A Study of the British Constitution. London: Macmillan. Senellart, Michel. 1995. Les arts de gouverner. Du regime médiéval au concept de gouvernement. Paris: Seuil. Stolleis, Michael. 1982. Rechtsstaat. In Handwörterbuch zur deutschen Rechtsgeschichte (edited by Adalbert Erler and Ekkehard Kaufmann). Berlin: Schmidt, vol. 4, 367–75. Stolleis, Michael. 1992. Geschichte des öffentlichen Rechts in Deutschland, vol. 2 1800–1914. Munich: Beck. Sunstein Cass R. and Vermeule Adam. 2015 Libertarian administrative law. The University of Chicago Law Review. 82: 393–473. Tocqueville, Alexis de. 1866. Rapport fait à l’Académie des Sciences Morales et Politiques (1846) sur le livre de M. Macarel, intitulé Cours de droit administratif. In Tocqueville, Œuvres Complètes. Vol. 9. Etudes économiques, politiques et littéraires. Ed. by Mary de Tocqueville and Gustave de Beaumont. Paris: Lévy, 60–75. Tocqueville, Alexis de. 1969. L’Ancien Régime (edited by G.W. Headlam). Oxford: Clarendon Press. Tocqueville, Alexis de. 1994. Democracy in America. (edited by J.P. Mayer, translated by George Lawrence). London: Fontana (1st ed. 1835; 2nd ed. 1840). Vermeule, Adam. 2009. Our Schmittian administrative law. Harvard Law Review. 122: 1095–149. Wilson, Woodrow. 1887. The study of administration. Political Science Quarterly. 2: 197–222.

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2. 

Good-­bye, Montesquieu Bruce Ackerman

If the field of comparative administrative law is to have a future, we must build a new framework for analysis. The traditional contrast between common and civil law systems is a non-­starter: Whatever its value in the private sector, it was never built to highlight the distinctive characteristics of administrative law. The same holds true for familiar models focusing on comparative criminal procedure (Damaska 1986). Models built on particular national experiences have their uses. The French Conseil d’Etat has had an influence in some other nations; as has the German system of administrative courts. But in the twenty-­first century, we need a much broader framework that invites disciplined comparisons on a world-­wide basis, and informed normative r­ eflection on the evolving lessons of experience. This requires us to move decisively beyond Montesquieu’s reflections on the separation of powers (Montesquieu 1989). No other field of academic inquiry is so dominated by a single thinker, let alone an eighteenth-­century thinker. However great he may have been, Montesquieu did not have the slightest inkling of political parties, democratic politics, modern constitutional designs, contemporary bureaucratic techniques, and the distinctive ambitions of the modern regulatory state. And yet we mindlessly follow him in supposing that all this complexity is best captured by a trinitarian separation of power into the legis­ lative, judicial, and executive – with comparative administrative law somehow captured in the last branch of the trinity. Give Montesquieu his due. His theory represented a fundamental advance over trad­ itional Aristotelian understandings of mixed government. Within this earlier framework, different branches represented different social classes – for example, the British House of Commons represented the class of commoners; the Lords, the lords; and the Crown, the biggest honcho of them all (Vile 1967). Montesquieu rejected this class-­ based understanding. His different branches corresponded to different functions of government. In taking this functionalist turn, he followed Locke, who had also separated out three government functions for separation-­ of-­powers treatment. But Locke’s trinity was different: He placed the judiciary in the ‘executive’ box, filling the void with a ‘federative power’ dealing with foreign relations, yielding legislative-­executive-­federative as his trio (Locke 1987). Because Montesquieu was himself a judge,1 he believed it especially important to emphasize the independence of the judiciary in the French monarchy, but he did so at the cost of suppressing Locke’s insights into the distinctive functioning of the state in foreign affairs. And so he derived the now-­classic trinity: legislative, executive, judicial. Apparently, trinitarian thinking was

1   Technically, Montesquieu was President of the Parliament of Bordeaux, and it is an oversimplification to describe this body as a court. But its judicial function provided an important check on the absolutist ambitions of the French monarchy.

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Good-­bye, Montesquieu  39 so overwhelming in the eighteenth century that Montesquieu could not tolerate four boxes in his conceptual scheme. Almost three centuries later, it is past time to rethink Montesquieu’s holy trinity. Despite its canonical status, it is blinding us to the world-­wide rise of new institutional forms that cannot be neatly categorized as legislative, judicial, or executive. Although the traditional tripartite formula fails to capture their distinctive modes of operation, these new and functionally independent units are playing an increasingly important role in modern government. A ‘new separation of powers’ is emerging in the twenty-­first century. To grasp its distinctive features will require us to develop a conceptual framework containing five or six boxes – or maybe more. And so we must say a fond farewell to Montesquieu, and create a new foundation for comparative administrative law that is equal to the challenges of modern government. To see my point, look at what is actually happening in the twenty-­first century: Can we observe world-­wide tendencies to insulate certain functions from the legislative, ­executive and judicial branches of government? If so, what are they? For starters, consider the world-­wide rise of independent election commissions. In which of the three boxes do they belong? Occasionally, courts do function to check the integrity of elections, as in the case of the French Conseil Constitutionnel (Turpin 1986: 265–82). But more frequently, these special electoral institutions are entirely separate from the regular judiciary as well as from the political branches. For good reason. On the one hand, it makes sense for the independent electoral commission to run the ballot process from start to finish, and not only to act like a court, intervening afterwards to determine whether there was cheating going on. At the same time, it is essential to insulate its operation from the political branches – because it is precisely the sitting politicians in charge of the ‘executive branch’ who have the incentive and the power to manipulate the vote-­count to insure their reelection. As a consequence, modern constitutions increasingly treat election commissions as a distinct branch of government, taking special steps to protect their integrity. And even if a country’s constitution does not formally guarantee the independence of the electoral commission, statutory law frequently insulates it from political interference in a host of unconventional ways (Ackerman 2000: 716–21). Using the electoral commission as an example, consider the four-­stage analysis that permits an assessment of an institution’s legitimate position in the new separation of powers. The first step involves the identification of a fundamental governmental value: in this case, the proponents of electoral commissions invoke the value of democracy in making their case for institutional independence. The next step requires proponents to explain why their favored value requires the institution to receive special constitutional protection from outside forces. In this case, proponents of independent commissions point to the obvious danger of the ‘fox guarding the henhouse’ – political incumbents awarding themselves another term in office by manipulating the vote-­count. The third step identifies techniques of institutional insulation that will give the ‘newly separated power’ an incentive to do a better job. This emphasis on institutional design, in turn, leads to the fourth and final step: comparative empirical analysis. For example, why does the Indian Electoral Commission do a relatively good job insuring an accurate vote count in a bureaucratic system otherwise scarred by massive corruption and inefficiency (Ackerman 2000: 718–21)? What lessons can be learned from the recent unsatisfactory

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40  Comparative administrative law performance by the Mexican commission in handling the contested presidential election of 2006 (Ackerman 2010)? And so forth. On the basis of these comparative inquiries, scholars may contribute to the design of better institutions and provoke critical inquiry into the distinctive weaknesses of different constitutional systems. Consider, for example, the infamous election contest between Bush and Gore in 2000. Montesquieu must take part of the blame for the spectacularly poor performance of American institutions in resolving the dispute. Given the country’s traditional commitment to Montesquieu’s trinity, it seemed obvious to the leading participants that the administration of elections is just-­another-­ordinary-­part of the executive branch. After all, it certainly is neither legislative nor judicial – and the only other box that remains is executive. Therefore, voting administration must be executive – it’s positively un-­American to think that there is a fourth category, isn’t it? This unthinking trichotomy allowed the Florida executive to engage in political shenanigans as she supervised the administrative process through which Bush was finally declared the ‘winner’. America badly needs an independent electoral commission, but it will not get one until it awakes from its Montesquieuan slumbers and joins the movement toward a new separation of powers sweeping the world today. There are, as we have seen, compelling reasons for independent electoral commissions; compelling enough for most countries to put the idea into practice. Why shouldn’t the USA take notice? Another world-­wide trend suggests the potential scope of the four-­stage analytic framework that I have sketched. Consider the massive shift toward independent central banks during the past half-­century (Kleineman 2001). Substantively, central banks look very different from electoral commissions. But analytically, they raise the same questions. Begin by defining the fundamental values at stake. Here the governing value certainly is not democracy. It is instead neo-­liberal economic theories that emphasize the importance of insulating the money-­supply from short-­term political manipulations, and insist that economic science has provided technocrats with superior analytic tools for regulating key macro-­variables. As before, the first task is to evaluate the relevant value judgments underlying neo-­liberal economic philosophy; the second task is to assess claims about political incentives – is it really true that political incumbents have counterproductive incentives to manipulate the money-­supply to win reelection? The third task explores different institutional designs for independence – how does the design of the Federal Reserve differ from that of the Bank of England? Finally, we need extensive empirical work to figure out how different designs work out in practice. I have explored other aspects of the new separation of powers elsewhere (Ackerman 2000). But for now, it is enough to note a couple of obvious issues. First, the question of coordination: the more power-­centers we insulate from the classic political and judicial institutions, the greater the problem we have in coordinating the proliferating number of separated powers into a coherent whole. Second, the question of democratic legitimacy: if we go too far in insulating too many branches from direct political control, we may deprive the democratic process of its central significance – leaving elected representatives of the people at the mercy of independent central bankers, and others, who are insulated from their direct control. These two problems suggest care in creating new independent power-­centers. But they do not suggest that it never makes sense to create a new separation of power. Instead, they suggest a cautious approach: we should reserve this strategy for the protection of

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Good-­bye, Montesquieu  41 especially fundamental governmental values, in contexts where normal political incentives are especially pernicious, and with institutional designs that are well-­conceived, and if at all possible, empirically tested. The construction of new power-­centers, in short, requires a host of complex and context sensitive judgments. Only one thing is clear: We will get nowhere in making these judgments if we content ourselves with repeating Montesquieu’s mantra. Instead, we must modify the mantra to take account of an institutional world in which independent institutions play increasingly important functions – even though they cannot be classified as legislative or judicial or executive. The holy trinity has a second defect; it encourages us to ignore the different dynamics governing administrative operations in parliamentary and presidential regimes. Formally speaking, it is easy for Montesquieuans to disregard this difference when describing the separation of powers in legal terms. On the standard account, both presidents and prime ministers are the head of the executive branch, and, therefore, the head of public administration. But serious comparative studies must go beyond this formal parallelism. The prime minister and his cabinet really can exercise monopoly control over the bureaucracy; but presidents must compete for control with an independently elected Congress. Legislative leaders have their own weapons for pushing the bureaucracy in their direction – most importantly, they can threaten the agency with reduced funds if it does not follow their priorities. To parry these threats, presidents appoint political loyalists to the upper reaches of the administration. President Obama, for example, has to fill 3000 positions before his government can become fully operational (Lewis 2008: 56). By putting loyalists in charge, the president hopes to guarantee that the ministries and agencies will use their discretion to follow his priorities, not those of his political rivals in the legislature. But this technique by no means assures that he will exercise the same degree of administrative control as that asserted by a prime minister. By assuming, with Montesquieu, that presidents are chief executives, comparatists run the risk of ignoring this key point. The conflict between presidents and legislatures is mediated by the particular rules and structures put in place by different constitutional regimes. If presidents must gain Congressional approval for their appointments, it will be tougher for them to colonize the bureaucracy with super-­loyalists. At the same time, Congressional control over the budget varies from system to system. This opens up a rich field for comparative study, as we consider the impact of different constitutional regimes on the on-­going competition between president and Congress for bureaucratic influence. These fascinating variations should not drown out a common theme: Presidential systems encourage the politicization of the bureaucracy, leading to the demotion of career civil servants to second-­tier positions as presidents keep pushing political loyalists into key administrative positions in their on-­going struggles with Congress. This basic dynamic raises a fundamental normative issue. Quite simply, the politicization of bureaucratic leadership raises a fundamental challenge to the Rule of Law. Presidential loyalists will be sorely tempted to ignore the law if this furthers their leader’s political interests. Administrative law in presidential systems should be especially attuned to this threat. This rule-­of-­law strategy can be pursued in different ways in different places, and may well rely on special administrative structures, and not only courts. Comparative

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42  Comparative administrative law law has a key role to play in gaining perspective on the merits of competing institutional strategies. Beyond these important questions of institutional design lurks a larger question: Are the participants in one-­or-­another presidential system even aware that they have an especially acute rule-­of-­law problem? In the United States, for example, the answer is No. The prevailing Chevron doctrine legitimates massive judicial deference to administrative legal determinations, opening up a wide space for the political abuse of agency discretion.2 Bureaucratic dynamics in parliamentary systems lead to very different abuses. The prime minister and his cabinet are themselves the leaders of the parliamentary majority, and their direct control over the legislature eliminates the inter-­branch competition that politicizes presidential bureaucracies. Because the prime minister’s political monopoly over the bureaucracy is assured, he can take a very different view of the professional civil service. He need not worry that bureaucrats will succumb to pressure from Congressional barons. Instead, he can view them as a key resource in his struggle for political survival. After all, the professionals have a deep understanding of the basic issues, as well as a sense of bureaucratic realities and possibilities. If the prime minister manages to harness their energies, they can help him deliver on his political promises, and increase his chances of victory at the next election. From this perspective, it makes good sense for the top politicians to support a highly professional civil service. The better it is, the better their chances of victory. This political dynamic is not inevitable. Prime ministers may choose to populate the bureaucracy with their cronies, and use their control over parliament to silence criticism. Cronyism may maximize short-­term political support, despite professionalism’s long-­run political attractions. But once a strong civil service has been established, the political logic of parliamentarianism is likely to sustain the professional tradition – as the examples of the UK, Germany, Italy, and France (in the Third and Fourth Republics) suggest. This means that parliamentary systems generate distinctive administrative pathologies. Although the civil service in presidential systems tends to be too weak, it now risks becoming too powerful. Prime ministers will come and go, but professionals will stick around for decades, and they can use their monopoly of expertise to manipulate their titular polit­ ical bosses. A strong civil service may also insulate itself from broader currents of public opinion, and fail to appreciate when its actions seem autocratic or silly or worse. Indeed, it may also insulate itself from on-­going currents of scholarly research, and persist with bureaucratic practices and policies that have long since been discredited in serious academic circles. A culture of secrecy is likely to exacerbate all of these bureaucratic rigidities. This leads to a different set of normative challenges. Administrative law reform in parliamentary systems should emphasize bureaucratic responsiveness to the larger political and social environment. Begin with politics. When a new leadership wins a parliamentary majority, it often confronts a relatively unified team of high civil servants, who may present them with a very limited set of policy options. Special structures are needed to enable a newly elected political majority to gain a broader understanding of their realistic

2  See Chevron, Inc. v. Natural Resources Defense Council, 467 US 837 (1984). It is one thing for courts to say that they will defer; quite another, for them to act deferentially in concrete cases. The extent of this gap is explored by Eskridge and Baer (2008).

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Good-­bye, Montesquieu  43 opportunities. One option is a mechanism to facilitate the creation of different teams of top bureaucrats to present rival plans for implementation – with special incentives for Team B to think out of the box. In the same spirit, top bureaucrats should keep in touch with evolving social real­ ities. Statutes should require administrators to hold broad-­based public hearings before promulgating administrative regulations with large-­scale impact. And agencies should be required to defend these rules in appeals before courts or other neutral review bodies. I have pursued such proposals in greater detail elsewhere (Ackerman 2000). For the moment, it is more important to ask the same question we raised in connection with presidential systems. Is one or another national legal culture prepared to do something serious to control the distinctive pathologies characteristic of their parliamentary system? Quite often, the answer is No. For example, parliamentary systems in Europe have generally been very reluctant to require public hearings, and appellate procedures, of the kind envisioned by the American Administrative Procedure Act – even though bureaucratic responsiveness to civil society is even more important in these systems than in the presidential regime of the United States (Rose-­Ackerman 1995). Comparative administrative law can become an intellectual force for constructive critique. Just as it exposes the American failure to recognize the distinctive need for the rule of law in presidential systems, it also exposes the European failure to recognize the distinctive need for bureaucratic responsiveness in parliamentary regimes. In conclusion: Good-­bye Montesquieu; hello, the twenty-­first century and its promise of a new agenda for the comparative study of administrative law.

REFERENCES Ackerman, Bruce. 2000. ‘The New Separation of Powers’, Harvard Law Review, 113: 633–729. Ackerman, John M. 2010. ‘The 2006 Elections: Democratization and Social Protest’, in Andrew Selee and Jaqueline Peschard, eds., Democratic Politics in Mexico, Stanford CA: Stanford University Press-­Woodrow Wilson Center for International Scholars, CN. Damaska, Mirjan R. 1986. The Faces of Justice and State Authority, New Haven, CN: Yale University Press. Eskridge, Willam N. Jr. and Lauen Baer. 2008. ‘The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan’, Georgetown Law Review, 96:1083–1226. Kleineman, Jan, ed. 2001. Central Bank Independence: The Economic Foundations, the Constitutional Implications and Democratic Accountability, The Hague; and Boston: Kluwer Law International. Lewis, David E. 2008. The Politics of Presidential Appointments: Political Control and Bureaucratic Performance, Princeton, NJ: Princeton University Press. Locke, John. 1987. Two Treatises of Government, Richard Ashcraft, ed., London, and Boston: Allen & Unwin. Montesquieu, Charles de Secondat. 1989. The Spirit of the Laws, Anne M. Cohler, Basia Carolyn Miller and Harold Samuel Stone, trans., New York: Cambridge University Press. Rose-­Ackerman, Susan. 1995. Controlling Environmental Policy: The Limits of Public Law in Germany and the United States, New Haven, CN: Yale University Press.  Turpin, Dominique. 1986. Contentieux Constitutionnel, Paris: Presse Universitaires de France. Vile, M.J.C. 1967. Constitutionalism and the Separation of Powers, Oxford: Clarendon Press.

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3.  Politics and agencies in the administrative state: the U.S. case Peter L. Strauss

The American presidential election pending as this chapter goes to press, culminating a period of extreme political partisanship in our national government generally, gives point to an essay on politics and agencies in the American regulatory state. In our two-party system, it has often been the case in recent times, including the last six years, that the President comes from one of the parties and one or both houses of our legislature are controlled by the other. All American agencies (including, in the American case, the so-called independent regulatory bodies) are associated with the President in the executive branch, yet dependent on the Senate for confirmation of their heads and other important officers and on the agreement of both houses for their budgets. So, with constitutional structure as a focus, one might ask what, if any, necessary structural relationship do bodies within the executive have to the legislature? Must there be a connection? What kind of a connection, and how assured? What, if any, work is excluded from their purview because it is necessarily the work of a legislature? Alternatively, one might ask, more descriptively: what are the actual relationships; how do executive and legislative politicians influence the administrative state, either before or after it takes action? These are large subjects for inquiry, whose dimensions can only be sketched here. More extensive treatment of these subjects and other matters can be found at length in the just published third edition of my Administrative Justice in the United States (Strauss 2016). In comparative perspective, one immediately notices that American government is both presidential and federal,1 complicating relationships both horizontally and vertically; and also that, at present, our national legislature, if not our judicial system, is dysfunctional. One hopes that this latter state of affairs will prove transitory, despite the increasing partisanship of American politics. Where partisanship has produced divided government – the presidency in the hands of one party, Congress controlled by the other – unwillingness to compromise has generated repeated budgetary crises, long senatorial delays in confirming presidential nominations to important administrative positions (and even outright rejections), and significant reductions in actual legislating. Presidents, in turn, have been driven to increasingly rely on self-help – the use of officials who do not require Senate confirmation to oversee important policy developments, enhanced control over administrative activity, and reliance on regulations and soft-law instruments to do the work that might ordinarily be expected of legislation. In individual states, increasingly identified as “red” or “blue,” divided government is less common. A stable one-party dominant state can drift away from the political middle ground; yet as a colleague has recently suggested (Bulman-Pozen 2016), interactions between the President and the governors of one-party

1

  Of possible interest on the federalism front is the very recent Young (2015).

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Politics and agencies in the administrative state: the U.S. case  45 states in conducting shared governmental business have contributed to a form of executive federalism that may seem familiar to comparativists. It might be added that, from a comparative perspective, politics has an unusually strong hold on the American judiciary as well. The United States does not have a professional judiciary, given special education and promoted over the course of a single career through increasingly demanding judicial assignments. American judges, educated as all American lawyers are, ascend to the bench mid-career, from private or public practice or from the academy. With few exceptions,2 the positions to which they ascend are generalist positions in a single judicial hierarchy that encompasses both public and private disputes, both ­ordinary and constitutional litigation. In a majority of states, judges are elected, making both their selection and their continuance in office not only a matter of political will, but also the result of electoral campaigns to which, under current American law, substantial sums may be contributed by persons believing the outcome may affect their interests. Federal judges are appointed to life terms – nominated by the President subject to confirmation by the Senate. The process has become intensely partisan, as has been illustrated by the controversy over filing the Supreme Court vacancy created by Justice Antonin Scalia’s death.3 The Court’s authority over such socially divisive issues as abortion, gender identity, gun control and the political rights of corporations underscores the stakes. Presidents seek appointments that will project their political preferences well past their terms in office; and Senators from the other party, aware of this, use the confirmation process to slow or even block appointments. Even positions on the intermediate United States Circuit Courts are contested, with the responsible Senate Committee withholding approval of politically controversial nominations, and other members of the Senate working to obstruct the confirmation of nominees made by Presidents of the other party.

1.  PRESIDENTIAL, NOT PARLIAMENTARY Differences between parliamentary and presidential systems have important implications for administrative governance in relation to the legislature. Formation of a multi-party coalition government in a parliamentary system may be complex and delayed well past the election date; yet the government once formed will immediately be led by a full complement of politically responsible officials with, typically, a rather thin political layer of 2   A few jurisdictions treat criminal trials or appeals separately; monetary claims that would operate on the state or national treasury may involve specialist courts; and the initial stage of bankruptcy proceedings, as well, occurs before ‘bankruptcy judges’ who hear only that kind of case. 3   Justice Scalia, a conservative stalwart on the Supreme Court for 30 years, died 13 February 2016, as presidential election campaigns were heating up. With four months remaining in the current Term of the Court, and certainty that a new President could not place a nominee on the Court until at least half the following year’s cases had been heard, President Obama nominated Judge Merrick Garland for the position. Garland was unusually old (63) in relation to recent appointments, and his long tenure as a judge on the country’s second most important court for decisions affecting governmental interests, the D.C. Circuit, had established him as an apolitical, centrist candidate. Nonetheless, reflecting the political importance of the position, the Republicancontrolled Senate made clear that no hearings would be held on the nomination, or votes permitted, before the November election.

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46  Comparative administrative law officials overseeing the work of civil servants. The government rises and falls as a whole when elections are held or confidence is lost. If its Ministers are able to reach agreement on a draft of legislation, their relation with the Parliament virtually assures its enactment. The drafting is collegial – the Prime Minister does not put before the Parliament proposals bearing his imprint only. And the collective imprint, together with the identification of the Ministers with the parliamentary majority, substantially eases the enactment process. Often, if not invariably, Ministers are members of the Parliament and participate fully in its proceedings. If that legislation creates ministerial bodies with the authority to issue secondary legislation – that is, regulations – the Council of Ministers or Cabinet is likely to assure that those regulations, also, will be a collective product. Perhaps it will be necessary to lay them before the Parliament against the (slim) chance they will be disapproved; in any event, the Minister will be directly answerable to that body. And the Prime Minister, herself, is dependent on collective support for her continued authority; should she lose it, someone else will ascend to her position. If independent bodies are placed outside this politically unified system in parliamentary systems, one consequence could be that any authority they have to adopt secondary legislation (regulations) requires the use of public procedures (like the American noticeand-comment procedures), which are not required of ministerial agencies adopting such measures. The important point for present purposes is to understand that American practice makes no such distinction. Here, public notice-and-comment procedures are generally required for the adoption of secondary legislative measures, without regard to agency type. Collectivity is missing from the American presidency, unity from presidential-legislative relations. The Constitution explicitly forbids Members of Congress to serve in executive office in any capacity.4 And the executive branch as a whole functions under the oversight of one individual and his immediate advisors (the President and the Executive Office of the President), not a collective cabinet. Cabinet secretaries and other heads of government agencies can take office only on the Senate’s confirmation of their nomination – a process that is often contentious and time-consuming (O’Connell 2010). For just this reason even the fact of nomination may be considerably delayed while possible candidates are “vetted” against the possibility of embarrassing outcomes. The political layer of officialdom beneath them is considerably thicker than is common in parliamentary systems. Although its membership may not be subject to the Senate’s direct control, it is unlikely to be completely formed before the Senate confirms the political heads. In the confirmation process, the political heads may have been induced to make promises about their conduct in office that can then influence their actions; yet once they are in office, only the President controls their tenure. The difficulties of political leadership can be especially important in departments or agencies in which vacancies occur, through death or resignation, in the midst of a presidential term. In nominating a successor, the President’s choices may be sharply limited by the politics of the moment; in general, that successor cannot take office immediately but must await Senate confirmation, which – again – may be significantly delayed. Perhaps a secondary official in the agency will serve as an “acting” head, but that person may not be 4

  U.S. Constitution, art. I, § 6.

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Politics and agencies in the administrative state: the U.S. case  47 the President’s nominee. This issue has been further complicated by the Supreme Court’s recent acceptance of a Senate practice effectively denying the possibility of presidential self-help during periods in which important positions are vacant for extended periods.5 The Constitution permits the President to “fill up all Vacancies that may happen during the Recess of the Senate by granting Commissions that shall expire at the end of their next Session.”6 Reflecting the history of uses of this power over the centuries, the Court has interpreted this phrase to reach all vacancies – whether they are present during an intra-session recess as well as between formal sessions, and without regard to when they have occurred; it is only necessary that the vacancy persists during a period of formal Senate inactivity. However, that formal period of inactivity must have a fixed duration, perhaps ten days or more. In the case before it the Senate had provided by resolution for pro forma meetings each three days during what would otherwise have been its extensive winter break. The Court concluded that those meetings – a minute or two in length, and rarely with more than one Senator apparently in attendance – sufficed to defeat the President’s power. A Senate controlled by the opposite party than that of the President, then, can readily keep vacancies from being filled by other than the normal nominationand-­confirmation process – and can defeat that “normal” process by delay and extended hearings The absence of collective political responsibility for executive actions means that no council of ministers needs to agree to the President’s acts; cabinet secretaries have neither control over his tenure in office nor any capacity, by agreement among themselves, to approve or disapprove any action he might take. It is the President who submits nomin­ ations to high office and legislative proposals to Congress, and while he does so after consultations, in the end his wishes control. Then, when those proposals get to Congress, its processes are independent of his wishes. The public’s votes for its members may or may not have coincided with the vote for him, but in any event they are independent of his political preferences. They do not constitute a singular “government” in the parliamentary sense. In the case of divided government, the enactment of legislation that the President supports is far from assured. Enactment of a presidential draft into law is quite unlikely, even on topics with bipartisan support. Collectivity and responsibility to the legislature are missing as well from the administrative generation of secondary legislation, that is, regulations. Congressional authorizations for rulemaking, as this process is called, almost invariably place it with a particular administrator. ‘In the framework of our Constitution, the President’s power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker,’7 but it has long been accepted that Congress can place the power to adopt regulations, a form of hard law, in the hands of a particular administrator, who generally acts after the public consultation process specified by the federal Administrative Procedure Act.8 Once it has done so, its 5   N.L.R.B. v. Noel Canning, 134 S. Ct. 2550 (2014). Even this result was quite narrowly reached. Four concurring Justices, the conservative bloc, would have limited the applicability of the Vacancy clause to inter-session recess vacancies, and even then only if those vacancies actually arose, not merely persisted, during that particular recess. 6   U.S. Constitution, art. II, sec. 2. 7   Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952). 8   5 U.S.C. § 553. The process is described in Strauss (2016).

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48  Comparative administrative law formal capacity to alter administrative actions (beyond, that is, the discipline that may be inflicted by budgetary restrictions or oversight hearings) is limited to new statutory measures – which, quite beyond the difficulties created by the internal complexities of the legislative process, must be able to survive a presidential veto. The Executive Office of the President, and not a ministerial collective, is also responsible for any oversight of agency notice-and-comment rulemaking, the American secondary legislation process. Here, political (but not legally required) considerations differentiate its relation to rulemaking in independent regulatory bodies and other elements of administrative government. Statutorily, rulemaking is an activity internal to the individual governmental units on which Congress has conferred the power to engage in it. Beginning in the administration of President Jimmy Carter, however, and as it became evident that rulemaking had become a major source of legal obligation in the American economy, Presidents have used Executive Orders9 to put in place measures that require presidential engagements with important rulemakings. These measures (which, again, have a singular, not a collective, political character)10 have steadily grown stronger over the years. They invite all agencies to participate in an annual regulatory planning activity, permitting presidential input into agency policymaking priorities and eventuating in a public ‘Regulatory Plan’ creating advance notice of possible forthcoming regulatory activity. Executive agencies, but not the independent bodies, are then required to engage in cost-benefit analysis procedures under the supervision of a White House office, the Office of Information and Regulatory Analysis (OIRA) for their important individual rulemakings. In American administrative law, it may be remarked, these “ministry-level” bodies (such as the Environmental Protection Administration, the Occupational Safety and Health Administration or the National Highway Traffic Safety Administration), and not the independent regulatory commissions, are the ones responsible for the bulk of regulations having an important impact on the American economy. Whether the resulting presidential power over the bodies Congress has authorized to engage in rulemaking has become excessive, whether that power is exercised as transparently as it should be, and whether it has become excessively politicized (rather than grounded in objective and normative policy considerations) are matters now hotly debated in the American literature. (Kagan 2001; Calabresi and Yoo 2008; Strauss 2007). But instincts grounded in expectations about parliamentary government – that this activity is a coordinated activity for which the government is collectively responsible – must be suppressed when considering the American practice.

 9   These are presidential directives to administrators, legally effective within the government but lacking direct force on private parties. 10   The current form is Executive Order 12866, 58 Fed. Reg. 51735 (1993), only slightly amended (strengthened) since President Clinton adopted it early in his administration. E.O. 13563, 76 Fed. Reg. 3821 (2011).

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Politics and agencies in the administrative state: the U.S. case  49

2.  CONGRESS AND ADMINISTRATIVE AGENCIES 2.1 Formation As has often been remarked, there is a hole in the American Constitution (Mashaw 2012). The government is not there – well, barely there. Article I speaks to the Congress and its powers; Article II to the President and his powers; and Article III to the judiciary. A clause in Article I authorizes Congress to enact any legislation “necessary and proper for carrying into execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof,” but notwithstanding these words the Constitution vests no powers “in the government of the United States, or in any department or officer thereof.”11 This phrase appears to be an overlooked residue of an earlier draft that would have specified several cabinet departments with particular responsibilities. The universal understanding today is that the national government is exclusively to be created by statute and, save for the powers the Constitution vests in the President himself and any that might be found implicit in his personal office (Monaghan 1993), executive bodies only take the form and enjoy only the legal authority that Congress enacts. Save as statutes might authorize him to do so, the President cannot himself create governmental bodies, or reallocate their functions as he might prefer. Indeed, Article II, addressing the President and his authority, is explicit both that there will be a government with Departments headed by individuals other than himself, and that they will have responsibilities defined by law. Presidential powers are defined by the second section of Article II, which relevantly provides: The President shall be Commander in Chief of the Army and Navy of the United States . . .; he may require the Opinion, in writing, of the principal Officer in each of the executive Departments, upon any subject relating to the duties of their respective offices . . . He . . . shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . all other Officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

Both the fact of required confirmation, which creates in officials a relationship of honor if not legal obligation between themselves and the Senate, and the striking contrast between “Commander in Chief ” and “Opinion, in writing,” suppose a certain distance between the President and the heads of the bodies Congress creates to carry out the laws it enacts. Readers perhaps know that, despite this striking textual contrast, some scholars and some presidential actions argue that the President’s authority over domestic government is plenary – that the discretionary authorities Congress may have created in particular agencies are in fact his to exercise (Calabresi and Yoo 2008; Prakash 2016). In the author’s judgment, these propositions cannot be squared with the constitutional scheme – and,   U.S. Constitution, art. I, § 8.

11

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50  Comparative administrative law indeed, suggest a potential for one-person government that would have been alarming to the Constitution’s drafters (Strauss 2007). In a famous concurrence denying President Truman’s exercise of an authority not congressionally conferred, and emphatically rejecting the Solicitor General’s argument that the vesting clause ‘constitutes a grant [to the President] of all the executive powers of which the Government is capable,’ Justice Jackson understandably characterized the ‘Opinion, in writing’ power as ‘trifling.’12 Although the principal officers of government bodies – that is, those subject to supervision only by the President – must be senatorially confirmed, Congress can authorize the appointment of inferior officers by the President acting alone, or by the heads of particular Departments or agencies. To do so, as it often has, gives up the controls inherent in the confirmation process. When it then delays or even refuses confirmation of principal officers, government agencies are controlled by these inferior officers, responsible only to the President or perhaps even civil service officials; in the case of multi-member commissions, the agencies may lack the quorum necessary to act. Since the adoption of the Constitution, Congress has created governmental and quasigovernmental bodies in a great variety of forms, varying considerably in their relationships to the President and to itself, in their constitution and powers, and in their leadership. Within the government today, three forms dominate: cabinet departments headed by a Secretary and generally embracing within themselves a variety of subordinate bureaus or agencies; single-purpose agencies headed by a single administrator, such as the Social Security Administration or the Environmental Protection Agency; and multi-member bodies (often called independent regulatory commissions) such as the Federal Reserve or the Securities and Exchange Commission. Little question remains about Congress’s power to create “independent commissions,” typically headed by multi-member commissions serving staggered fixed terms in office. The leadership of these bodies must be established by the nomination-and-confirmation process. All are elements of the executive branch, and hence within the President’s obligation to “take Care that the Laws be faithfully executed.”13 Differences to other parts of the executive are a matter of degree and detail only (Strauss, 1984). Because the President alone has the responsibility for assuring the faithful execution of the laws, only executive officials – not the Congress – enjoy the power to appoint or remove subordinate executive officials from office.14 (Less important officials within the “Civil Service” of the executive branch are neither appointed nor may they be dismissed ­politically.) As respects single administrators appointed with senatorial advice and consent, the removal power is in general unlimited; they serve “at will,” and typically resign at a change in presidential administration. Congress has successfully required the President to make a showing of “cause” if he wishes to remove some advice-and-consent officers, notably but not exclusively the commissioners of the independent regulatory commissions serving fixed terms of office.15 Emphasizing commissioners’ necessary subjection to presidential oversight, however, the Court recently found Congress constitutionally precluded 12   Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 640-41 and n. 9 (1952) (Jackson, J., concurring). 13   U.S. Constitution art. II, § 3. 14   Bowsher v. Synar, 478 U.S. 714 (1986). 15   Humphrey’s Executor v. U.S., 295 U.S. 602 (1935).

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Politics and agencies in the administrative state: the U.S. case  51 from to assigning a similar “for cause” removal authority to an independent regulatory commission that Congress had empowered to appoint and control a subordinate board of independent actors; that, the Court reasoned, would place those board members at too great a distance from the constitutionally requisite possibility of presidential oversight.16 In creating various subordinate governmental and quasi-governmental bodies, Congress has been highly imaginative over the years, and this has occasionally given rise to questions about the limits of its authority to do so. Mixed bodies have been with us since the First Bank of the United States (1791). Quasi-governmental bodies today include the National Passenger Railroad Corporation (AMTRAK), the United States Postal Service, the Federal Deposit Insurance Corporation, the Federal Open Market Committee, the Tennessee Valley Authority, and many others serving important functions in the national economy. Their leadership may be wholly or partially comprised of government officials appointed by constitutional processes. Typically not defined as ‘agencies’ of the federal government, still they may be subject to numerous of its constraints – such as exposure to the Freedom of Information Act, or subjection to the constraints of the Bill of Rights. Important questions respecting their status have recently arisen in litigation involving AMTRAK, and it seems possible they will become the object of considerable contestation during the 21st century that was missing during the 20th.17 2.2 Authority Agencies have only the authority Congress creates for them, both as to the subject matter of their work, and the forms of action they may use in doing that work. Thus, statutory constraints, substantive and procedural, are always in question in relation to administrative agency behaviors affecting the public. Typically, subject matter is focused in a particular area of concern, although the terms for agency action are often stated in capacious terms. The Clean Air Act, for example, provides that the Administrator of the Environmental Agency is to adopt primary and secondary national air quality standards for each air pollutant she has identified such that: (1) National primary ambient air quality standards . . . shall be ambient air quality standards the attainment and maintenance of which in the judgment of the Administrator, based on such criteria and allowing an adequate margin of safety, are requisite to protect the public health. . . . [and] (2) Any national secondary ambient air quality standard . . . shall specify a level of air quality the attainment and maintenance of which in the judgment of the Administrator, based on such criteria, is requisite to protect the public welfare from any known or anticipated adverse effects associated with the presence of such air pollutant in the ambient air. . . .18

  Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477 (2010).   Department of Transportation v. Assoc. of American Railroads, 135 S.Ct. 1225 (2015), ­reinstated on remand Ass’n of Am. R.R. v. United States DOT, 2016 U.S. App. LEXIS 7750 (2016); these questions will not be discussed here. 18   42 U.S.C. § 7409(b)(1,2). 16 17

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52  Comparative administrative law It should be apparent that this statute provides the Administrator with substantial choice over regulatory targets, as well as a good deal of room (“based on such criteria and allowing an adequate margin of safety, . . . requisite to protect the public health”) within which to act against them. The Administrator is authorized not only to adopt these standards, following the statutorily prescribed rulemaking procedures, but also to enforce them, and to seek penalties for their violation in proceedings that begin within the agency, before one of its administrative law judges. In a constitutional system that radically separates the powers of Congress, President, and courts, one might think Congress would be precluded from empowering the executive to adopt secondary legislation and initially to adjudicate its violation, as well as to enforce it. Often styled “delegation of legislative authority,” the regulatory adoption problem is better characterized as “creation of executive authority.” This authority then is conditioned by judicial control of the legality of its exercise. As may be surprising to persons used to parliamentary governments, once Congress has authorized an executive actor to adopt secondary legislation implementing a statutory charge, it can disapprove it only by enacting a statute doing so19 – and that, of course, requires either a presidential signature (unlikely to be used to defeat an act of his administration) or the supermajorities required for both houses successfully to override a presidential veto. There is, to be sure, a special statute, the Congressional Review Act (CRA), that assures prompt notification to Congress of rules once adopted and provides a rapid means for summary disapproval;20 but prior to 2017, the CRA had been successfully used only once in the almost two decades since it was enacted,21 and then because a change in presidential administration intervened between the rule’s adoption and its disapproval. John Locke, (Locke 1690), an English philosopher who had a considerable influence on the thinking of our founding generation, denied outright the capacity of a legislature to confer legislative authority on others. Yet the American legislature, like virtually all others in the world, regularly confers on administrative agencies the authority to adopt secondary legislation that, if valid, has the force and effect of a statute. Three constraints differentiate these measures from statutes: they must be statutorily authorized; they must be adopted following statutory procedures that enable significant public input to which reasoned responses must be made; and their legally validity (and factual support) is subject to considerably greater judicial scrutiny on review than would be the case for statutes.22 Proper statutory authorization depends on the existence of an ‘intelligible principle’ so that a reviewing court can assess their legality.23 By requiring an ‘intelligible principle,’ American courts constrain the scope of agency discretion by themselves delimiting the space within which agencies are empowered to act, and by checking as well the reason­ ableness of agency actions. Reasonableness review of regulations is a process considerably more intensive than attends inquiries into the constitutionality of primary legislation. To be sure, an ‘intelligible principle’ is not a very demanding standard, and much of the American debate over “delegation” has addressed its indefiniteness. The very existence     21   22   23   19 20

Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983). 5 U.S.C. § 801. Pub. L. No. 107-5, 115 Stat. 7 (2001). 5 U.S.C. §§ 553, 706. Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 474 (2001).

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Politics and agencies in the administrative state: the U.S. case  53 of the requirement, however, gives agency officials an incentive to frame their actions to support the appearance of legality, incorporating extended explanations of their reasoning process in their required explanatory statements, supplying and explaining supporting data, and so forth (Stack 2015). The intensity of judicial review characteristic of the most important rulemaking only heightens that impulse. In a number of cases, the courts have adopted constructions of agency authority narrowing the policy space within which agencies are able to act – refusing, as Justice Scalia once colorfully put it, to find that Congress would “hide elephants in mouseholes.”24 The more important point, however, is that the courts regularly uphold agencies in their authority, for example, to define acceptable levels of ozone in the atmosphere; to require that cars contain air bags having defined operating characteristics; to specify the terms of valid offerings and sales on stock exchanges; and so forth. 2.3  Subsequent Control Once Congress has created an agency with an initial scope of authority, its subsequent direct controls over agency behavior derive from agencies’ need to secure additional congressional statutes authorizing further actions they might wish to take, their usual need to secure congressional funding for their activities in the annual appropriations process (some agencies are given, to greater or lesser extent, the possibility of self-funding through fees they are permitted to charge for the services they render) and – politically – through the possibility of calling agency officials to appear before them in “oversight” hearings in which their conduct of office might be publicly and embarrassingly challenged. A further inhibition on the American Congress’s possibilities of control, already mentioned, may seem quite remarkable in comparative context. Once an executive official is in office, Congress’s capacity to remove her is limited to the cumbersome process of impeachment. Congress might successfully limit the President’s authority of removal by requiring him to demonstrate “cause” for removal. Whether “cause” has successfully been demonstrated has never to my knowledge arisen as a legal issue, but in practice, like ordin­ ary civil service protections, the requirement provides some assurance of continuance in office. And Congress’s possibility to impose such a limit seems substantial. It clearly lacks the authority to do so only for those few officers (such as the Secretary of State) who of necessity serve, as Chief Justice Marshall early put it, as “the mere organ by whom [the President’s] will is communicated,” so that “nothing can be more perfectly clear than that their acts are only politically examinable,”25 and the consequent need for peremptory presidential control of their tenure in office is obvious.26 The bulk of executive officials, however, exercise a discretion that is tolerable only because it is constrained by law and subject to judicial control for its legality;27 as to these officials, who are not the President’s 24   Id. at 468. On the related judicial presumption that Congress does not generally delegate to agencies the authority to settle questions of ‘vast economic and political significance,’ see Emerson (forthcoming 2018). 25   Marbury v. Madison, 5 U.S. (1 Cranch) 137, 165–66 (1803). 26   272 U.S. 52 (1926). 27   “Congress has been willing to delegate its legislative powers broadly – and courts have upheld such delegation because there is court review to assure that the agency exercises the ­delegated power

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54  Comparative administrative law alter ego, the possibility that Congress can prevent the President from removing them except for “cause” seems considerably stronger. Although dicta in the strongest Court statement about presidential removal authority, Myers v. United States,28 flatly asserted that no such distinction could be made, it did so only in the service of precluding Senate participation in the removal decision. That the Senate’s consent may not be required for the removal of any executive official settles a question quite different from whether Congress can condition the President’s removal of officers with duties separable from his own on the existence of ‘cause.’ Subsequent decisions have made this clear (Strauss 2011). In parliamentary systems, the political allegiances between those who are responsible for creating the national budget and those who will enact it more-or-less assure that the budget will reflect political consensus about how the nation’s available financial resources should best be distributed. The “power of the purse” is indeed a potent political instrument, and congressional use of it can create situations quite at odds with presidential preferences. The President may have staffed the Department of Labor’s Occupational Safety and Health Administration with appointees strongly favoring regulatory actions to safeguard worker health and safety; but if Congress only appropriates funds sufficient to attend to forty thousand of the nation’s more than eight million workplaces, its preferences for weak enforcement will prevail. In recent years, budgetary enactments have tended to be part of omnibus legislation that effectively precludes significant congressional debate over their specifics, considerably empowering the appropriations committees that consider particular elements of the President’s annual budget submission. That these enormous, consolidated bills are subject to a simple up-or-down vote permits, as well, the intrusion into them by a Member or Members of particular riders forbidding the expenditure of any funds to support activities of which he or they disapprove. And the President is then able to approve or disapprove only the appropriations measure as a whole; he cannot veto particular elements he finds unwise (as the governors of some American states can under their state constitutions), or improperly supportive of special interests.29 In conducting oversight hearings, congressional committees exercise no formal authority over executive action, but they may nonetheless be able to produce significant practical constraints on agency action. Congressional demands for agency information are not readily blocked by assertions of executive privilege (and efforts to make such assertions have on occasion led to litigation), and the potential for embarrassment through revelation of what the agency would prefer not to disclose can itself inhibit. Agencies have relations with at least four committees – appropriations and subject matter committees in each chamber – and any of them may require the presence of agency officials, typically its political leadership, at a hearing. Even if the hearing is not motivated by hostility, as in the case of divided government or in the wake of calamity, having to prepare and then testify subtracts time and energy from the agency leadership, and these necessities may arise with great frequency. within statutory limits, and that it fleshes out objectives within those limits by an administration that is not irrational or discriminatory.” Ethyl Corp. v. EPA, 541 F.2d 1, 68 (1976) (Leventhal, J., concurring). 28   272 U.S. 52 (1926). 29   Clinton v. City of New York, 524 U.S. 417 (1998).

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Politics and agencies in the administrative state: the U.S. case  55 A professional body now known as the Government Accountability Office,30 several thousand strong, serves Congress both as a financial auditor of the legality of appropriations expenditures, and as a performance auditor seeking out waste and inefficiencies in agency function. Like the Inspectors General serving government departments and important agencies, these bureaucrats may be housed in the agency itself, and enjoy unimpeded access to agency officials and documents; their reports, provided to agency heads for possible response before transmission to Congress, earn considerable attention there, as well as informing Congress.

3. COURTS, ADMINISTRATIVE AGENCIES AND THE PLACE OF POLITICS One might think control of administration by courts, “the rule of law,” to be entirely distinct from political controls, and the Supreme Court’s first discussion of constitutional review appeared to draw that line explicitly. For highly political acts, where executive officials serve as “the mere organ by whom [the President’s] will is communicated,” Chief Justice Marshall wrote in Marbury v. Madison, “nothing can be more perfectly clear than that their acts are only politically examinable.”31 In fact, however, this “political question” proposition is quite limited in its application. Congress typically provides for judicial review of completed agency actions affecting private interests, and the courts generally apply a strong presumption favoring it even in circumstances where one might think it questionable.32 In the ordinary administrative context, in which delegations of rulemaking authority must be purchased with the coin of judicial review, government lawyers can make the claim that review is precluded – that courts cannot appropriately assess the legality of the government’s actions, perhaps because “intelligible standards” are missing – only at the risk of having the court conclude that, therefore, the challenged delegation of authority is invalid.33 Indeed, when questions have been raised about the permissibility of substituting administrative for judicial decisionmakers in settings that could readily be placed in courts, the judicial analysis now parallels that for the accommodation made to the authorization of executive rulemaking, previously discussed.34 So long as the assignment does not substantially displace courts’ traditional common law responsibilities for resolving private disputes or determine criminal guilt as such, effective judicial review of agency adjudication of disputes suffices to permit Congress to assign initial adjudication of disputes to an executive branch agency.35 Unlike European systems, America lacks an administrative

  Formerly the General Accounting Office, and under both names the GAO.   N. 25 above. 32  E.g., Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986). The occasional statute entirely precluding review generally concerns matters outside ordinary domestic administrative action, or for discrete and usually quite minor matters effectively assigned to non-judicial actors. 33   As happened in South Dakota v. Dept. of the Interior, 69 F.3d 878 (8th Cir. 1995), vacated on other grounds, Department of the Interior v. South Dakota, 519 U.S. 919 (1996). 34   Compare n. 27 above. 35   CFTC v. Schor, 478 U.S. 833 (1986). 30 31

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56  Comparative administrative law judiciary; its hearing officers, today styled Administrative Law Judges or Administrative Judges, are civil servants, not members of the judiciary, and the administrators who may be empowered to act on their decisions are political appointees of the executive branch. Administrative agencies like the Environmental Protection Agency (EPA) and the Social Security Administration (SSA) regularly use trial-like hearings to decide matters (such as civil penalties) that one might expect to be assigned for trial in the ordinary courts. The financial stakes of decision can be great, and the volume of these trial-like proceedings can be enormous; EPA’s civil penalties run to millions of dollars, and the SSA has a docket of disability cases greater than that of the federal judicial system. The possibility of judicial review suffices to permit these assignments. Beginning around 1970, perhaps as an outgrowth of the successful use of the courts to battle racial injustice in public administration, litigation to promote “public interest” propositions dramatically increased. The “political question” exclusion of such issues as legislative districting ended.36 With growing awareness of the environmental impact of super-highways and other governmental projects, lawsuits to enforce statutory constraints became common.37 Although standing to invoke the courts’ aid has long required the demonstration of an injury in fact, caused by government action and remediable by the courts, a decision of the 1970s significantly expanded this access; it treated as the necessary “injury in fact” any harm resulting from a challenged action that could reasonably be associated with the concerns of the statute plaintiffs were attempting to enforce. Injury to a conventional legal right would not be required.38 For example, someone regularly using a particular element of public lands could have standing to challenge a governmental action that would impair her aesthetic enjoyment of the land, endanger the trout she liked to fish for, or end its wilderness character. This liberal access to judicial review corresponded with, and reinforced, growing perceptions that federal agencies facing judicial review only at the behest of those they regulated had become insensitive to the public values they were charged to protect (Stewart 1975). And because expanded standing required agency attention to the wider range of interests that now might subject its actions to judicial review, the expansion provided some protection against what one noted scholar once characterized as the ‘daily machine-gun-like impact on both agency and its staff of industry ­representation’ (Landis 1960). As the Supreme Court’s membership became more conservative, justices frequently expressed concern that courts were being pulled into domains proper only for politics. A dominating case, Lujan v. Defenders of Wildlife,39 recently became the most cited of all Supreme Court administrative law decisions. It concerned a “citizen suit” provision of the Endangered Species Act, authorizing any person to challenge alleged violations. Two individuals and an NGO concerned with endangered species challenged a regulation that excluded terrestrial species of other lands from what until that time had been a requirement of interagency consultation about actions that could affect endangered species.   Baker v. Carr, 369 U.S. 186 (1962).   The Sierra Club and the Audubon Society, major “public interest” organizations, appear as parties in only one federal case in the 1960s, over one hundred in the 1970s, with consistent growth in each succeeding decade. 38   Association of Data Processing Service Organizations v. Camp, 397 U.S. 150 (1970). 39   504 U.S. 555 (1992). 36 37

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Politics and agencies in the administrative state: the U.S. case  57 However, the two members had no fixed and imminent plans to visit the foreign lands where American foreign aid to support construction projects might have contributed to the extinction of endangered species they hoped to view in the wild. They had shown no imminent, concrete harm to the aesthetic interests necessary to qualify for standing. And government’s curtailment of the statutory duty of interagency cooperation could not independently establish standing, absent some discrete, concrete injury flowing from it. To allow Congress to authorize such an action absent a caused and remediable concrete injury to the plaintiffs would permit litigation simply to enforce the proper administration of the laws in the abstract, impermissible under Article III of the Constitution as the majority concluded it must be understood. The Court remarked: When . . ., as in this case, a plaintiff’s asserted injury arises from the government’s allegedly unlawful regulation (or lack of regulation) of someone else, . . . causation and redressability ordinarily hinge on the response of the regulated (or regulable) third party to the government action or inaction – and perhaps on the response of others as well. . ..[I]it becomes the burden of the plaintiff to adduce facts showing that those choices have been or will be made in such manner as to produce causation and permit redressability of injury. Thus, when the plaintiff is not himself the object of the government action or inaction he challenges, standing is not precluded, but it is ordinarily “substantially more difficult” to establish.

In an email to me, Professor Cynthia Farina well captured the stakes in the ongoing Court disputes over this quite complex, even abstruse, question: All these efforts to restrict access to judicial review create asymmetric pressure on agencies because they disproportionately close out intended and incidental beneficiary challenges. So, judicial review works as a one­way ratchet, always pushing in the deregulatory direction. . .. [T]here is no way to understand standing doctrine except as a series of battles . . . in a war between two irreconcilable political philosophies about the appropriate role of government. If we [the holders of the more conservative philosophy] can’t limit regulatory programs directly via a robust non­delegation doctrine, we can at least ensure that judicial review always works against assertions of regulatory authority.40

Recognition of the possibilities of political oversight and control can be found in numerous judicial lines of analysis about the limits of judicial review. Agencies are limited, in justifying their decisions, to those factors made statutorily relevant and not, for example, simple political preferences.41 Yet absent the clearest indications of abuse, American courts will refuse to look behind stated reasons for “real” ones, and accept that when a record could support various outcomes, unrevealed presidential inputs may have influenced the choice actually made.42 Justice Stevens’ famous opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,43 second only to the Lujan case in citation volume, substantially relies on the fact of politically responsible presidential oversight in justifying its position treating agency determinations of matters fitting within legislative gaps as matters for oversight only, not independent judicial decision.

    42   43   40 41

Email of 17 November 2015, on file with author. For example, Massachusetts v. EPA, 549 U.S. 497 (2007). Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981). 467 U.S. 837 (1984).

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58  Comparative administrative law Of course in judicial review many issues arise that are not associated with the relation of political to judicial oversight, or the recent conservative judicial concerns about substituting judicial for political controls. Many of the chapters in this volume address judicial review issues, comparatively or in relation to particular legal systems, and the tight constraints of space allotted to individual contributions essentially preclude discussion of these issues here. The author’s views on such questions as “hard look review,” “Chevron deference,” “arbitrary and capricious,” etc. are set out in some detail elsewhere (Strauss 2002; Strauss 2016). Here, only a few cautionary remarks for readers coming to the subject from other systems will be offered. The standards of judicial review applicable to federal administrative action are dealt with in Section 706 of the APA.44 A number of organizing concepts are central. “Allocation” governs much of the thinking – that is, an appreciation for the division of responsibility between agency and court. “Deference” is a word one frequently encounters in this context, and it is important to understand that it has at least two senses – one, expressing the “weight” that would be appropriate for a court to afford agency judgments when deciding matters for which the court is independently responsible; and the other, acknowledging the “space” within which the agency has been authorized to decide matters subject to judicial oversight (Strauss 2012). To invoke a sports analogy, in the first sense the court is the “player” in the game, whose independent actions might be influenced by the views of another; in the second, it is in the position of “referee,” who must permit others to play within established boundaries, subject to its enforcement of the game’s rules. “Discretion” is another term of uncertain meaning, that we have met in the contrast between the acts of those who serve as the President’s alter ego (say, the Secretary of State), outside the ambit of judicial controls, and the decisions of those on whom Congress has conferred an authority that can only be sustained if its legality can be assured on judicial review. The APA provides for judicial review of “discretion” of the latter, but not the former, type;45 and even within that type what constitutes an “abuse of discretion” is not a singular concept, but varies in intensity among the variety of contexts in which it occurs (Strauss 2016).

4. CONCLUSION Perhaps by the time this chapter is in print the current American political uncertainties will have been somewhat resolved – at least until the following elections. What one can understand is that in the American system, in ways distinct from what one might experi­ ence in parliamentary democracies with a judiciary less subject to political selection, politics and “the rule of law” are in considerable tension. American jurisprudence has come well past Chief Justice Marshall’s declaration that courts could have no business examining (and hence constraining by the operation of law) any matter committed to the executive’s discretion. For the normal issues of domestic policy, judicial review is, in essence, a constitutional requisite. Politics operates nonetheless. Over the library entrance to Columbia Law School, where I teach, looms Jacques

44 45

  5 U.S.C. § 706.   5 U.S.C. §§ 701(a)(2), 706(2)(A).

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Politics and agencies in the administrative state: the U.S. case  59 Lipchitz’s enormous sculpture, Bellerophon Taming Pegasus – a metaphor for reason’s struggle with unreason, well suited to a school of law. The force of the metaphor is all the clearer when one sees that the sculptor has merged Pegasus into Bellerophon’s head – the unreason he is taming, quite a painful struggle to judge by the horse’s expression, is his own. In the United States if not elsewhere, administrative law sits in that painful place, a continuing contest between reason and unreason, and one must continuously work to make the influence of the former substantial.

REFERENCES Bulman-Pozen, J. (2016), ‘Executive Federalism Comes to America,’ Virginia Law Review, 102: 954–1030. Calabresi, S. G. and Yoo, C. S. (2008), The Unitary Executive: Presidential Power from Washington to Bush, New Haven: Yale University Press. Emerson, B. (forthcoming 2018), ‘Administrative Answers to “Major Questions”: On the Democratic Legitimacy of Agency Statutory Interpretation,” Minnesota Law Review 102, no. 5. Kagan, E. (2001), ‘Presidential Administration,’ Harvard Law Review 114: 2245–385. Landis, J. (1960), Report on Regulatory Agencies to the President-Elect. Locke, J. [1690] (1960), Two Treatises of Government, Cambridge: Cambridge University Press. Mashaw, J. (2012), Creating the Administrative Constitution: The Lost One Hundred Years of American Administrative Law, New Haven: Yale University Press. Monaghan, H. (1993), ‘The Protective Power of the Presidency,’ Columbia Law Review, 93: 1–74 (1993). O’Connell, A.J. (2010), Waiting for Leadership, Washington D.C.: Center for American Progress. Prakash, S. B. (2016), Imperial from the Beginning: The Constitution of the Original Executive, New Haven: Yale University Press. Stack, K. (2015), ‘Purposivism in the Executive Branch: How Agencies Interpret Statutes,’ Northwestern University Law Review 109: 871–932. Stewart, R. B. (1975), ‘The Reformation of American Administrative Law,’ Harvard Law Review 88: 1667–813. Strauss, P. (2016), Administrative Justice in the United States, 3rd ed., Durham, N.C. Strauss, P. (2012), ‘“Deference” is too Confusing – Let’s Call Them “Chevron Space” and “Skidmore Weight,”’ Columbia Law Review 112: 1143–73. Strauss, P. (2011), ‘On the Difficulties of Generalization: PCAOB in the Footsteps of Myers, Humphrey’s Executor, Morrison and Freytag,’ Cardozo Law Review 32: 2225–2283. Strauss, P. (2007), ‘Overseer or the Decider? The President in Administrative Law,’ 75 George Washing Law Review 75: 696–760. Strauss, P. (1984), ‘The Place of Agencies in Government: Separation of Powers and the Fourth Branch,’ Columbia Law Review 84: 573–669. Young, E. A. (2015), ‘The European Union: A Comparative Perspective,’ available at http://ssrn.com/abs​ tract52742307, accessed 7 September 2016.

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4. Written constitutions and the administrative state: on the constitutional character of administrative law Tom Ginsburg

Administrative law is the poor relation of public law; the hard-­working, unglamorous cousin laboring in the shadow of constitutional law. Constitutional law, it is generally believed, resolves the great issues of state and society, while administrative law, in its best moments, merely refines those principles for dealing with the administrative state. Law students flock to constitutional law classes, of which most law schools have three or four in the curriculum. The same students enroll in administrative law with a sense of obligation, as if the subject is a chore one has to manage. The two fields are, of course, intimately related, and share an overarching purpose of managing the relationship between state and citizen, with an emphasis on protection of the latter in democratic states. On the other hand, the fields reflect different legal sources and modalities. In some countries, they are adjudicated by entirely different courts. While constitutional law is becoming ever more comparative, with judges regularly citing each other’s opinions, administrative law remains bound to the nation state. This chapter makes three arguments. First, it argues that the conceptual division between administrative and constitutional law is quite porous, and that along many dimensions, administrative law can be considered more constitutional in character than constitutions. Second, it shows that written constitutions do relatively little to legally constrain the administrative state. Rather, their role is to establish the broader structural apparatus of governance and accountability, in which the bureaucracy is the great unspoken. This leaves administrative law as a relatively free-­standing field characterized by great flexibility and endurance, features that are usually thought to be more embodied in constitutions. Third, the chapter concludes that the exercise of comparison helps to expose the limits of written constitutions, and to call for greater attention to comparative administrative law as a feature of the unwritten constitution of nation states.

1. ON THE CONSTITUTIONAL CHARACTER OF ADMINISTRATIVE LAW The conventional understanding is that the fields of constitutional and administrative law share similar purposes of protection of rights, control of agency costs, and limitation of government. The primary difference, in this view, concerns their place in the hierarchy of public law: constitutional law regulates the highest norms of the state, while administrative law governs sub-­legislative action, somewhat lower in the hierarchy of sources, and hence in importance. In contrast, I argue that along several dimensions, administrative law should be under60 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 60

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Written constitutions and the administrative state  61 stood as more ‘constitutional’ than constitutional law. Consider the widely ascribed functions attributed to constitutions (Breslin 2009). Many would place the function of constitutionalism itself or limitation of government by law, at the fore. With regard to this limiting function, it is quite obvious that administrative law overlaps a good deal with constitutional law, and has a wider scope in the sense that it touches far more behavior. The average citizen is not a dissident who is concerned with the state limiting her political speech; nor is the average citizen a criminal concerned with criminal procedure provisions in constitutions. Rather the average citizen encounters the state in myriad petty interactions, involving drivers’ licenses, small business permits, social security payments, and taxes. It is here that the rubber meets the road for constitutionalism, where predictability and curbs on arbitrariness are least likely to be noticed but most likely to affect a large number of citizens. So it seems clear that administrative law is constitutionalist in orientation and arguably more important to more people than the grand issues of constitutional law. Constitutionalism, though, is hardly the only function of constitutions. Indeed, constitutions exist in a wide variety of states that cannot be called limited in any real sense. Nor are these ‘paper’ constitutions to be characterized as useless (Brown 2008). Even in dictatorships, constitutions can provide accurate maps of what institutions matter. Autocrats and oligarchies need to coordinate their own internal expectations about the mechanisms of rule, and constitutions can play an important role in aligning such expect­ ations. In some cases, constitutional rules provide useful frameworks for resolving intra-­ elite disputes (Barros 2002). This function of constitutions is not limitation but definition, constituting government by empowering it and establishing organizations to carry out its tasks. The administrative law analogue to this function of setting up government agencies is captured by organic statutes. These are rarely the subject of legal dispute except in terms of scope of delegation by the legislature.1 Another set of functions widely ascribed to constitutions are symbolic or expressive. In some polities, constitutions reflect and sometimes even create a shared consciousness, and so overcome regional and ethnic divisions. In South Africa, for example, the 1996 Constitution became a symbol of participation and reconciliation, and retains popularity notwithstanding major social problems and disaffection from government. The Mexican Constitution of 1917 is widely attributed to have had great symbolic value even though it took many decades before it was effectively enforced. The symbolic or expressive function of constitutions emphasizes the particularity of constitution-­making. It is We the People that come together, and so the constitution embodies our nation in a distinct and local way different from other polities. So constitutions limit government, establish institutions, and serve as important symbols for the polity. The mode by which constitutions carry out these functions is familiar. Constitutions work through entrenchment, providing an enduring set of foundational rules, structuring and facilitating normal politics in a particularistic way that reflects local values. Administrative law accomplishes some but not all of these functions, and does so in a less grand manner. Very little writing on administrative law discusses the symbolic   For a broader perspective on coordination in administrative law, see Ahdieh (forthcoming).

1

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62  Comparative administrative law ­ imensions of articulation of state-­society relations. Organic statutes for particular d agencies are not always entrenched, and the major instruments governing administrative procedure and adjudication are typically statutory in character, in principle amendable as conditions change. My first argument is that administrative law is often a better reflection of the local and that it is administrative law which provides for more endurance in many polities. Only at a symbolic level, then, can constitutions claim distinct functions that administrative law does not accomplish: only constitutions can be said to constitute the nation or bind the people together through common understandings. But this symbolism is in turn based on an illusion and a misunderstanding of the crucial constitutional characteristics of endurance and localism. Constitutions serve as important symbols because people believe they do things that they do not. Administrative law systems, in turn, are more localized and more enduring, and hence worthy of greater attention in trying to understand the effective legal regulation of government. 1.1  Localism: Constitutions Converge More than do Administrative Law Systems The classic image of constitution-­making is of a discrete group of citizens coming together to empower a government. This social contract imagery is temporally and geographically bounded. We the People produce the constitution as a distinctive reflection of our local values. But this imagery is wrong on several scores. First, international actors increasingly have a stake in constitution-­making and take substantive positions in the drafting process (Lollini and Palermo 2009). Second, and somewhat related, constitutions have converged in substance over time. A substantial body of research has demonstrated that provisions of national constitutions have come to reflect a kind of script of national modernism in which the local is subordinate to global norms (Go 2003, Boli 1987, Boli-­ Bennett and Meyer 1978, 1980). The basic forms of governance, too, seem to divide into fairly predictable variants. Why might this be the case? Because constitutions are the highest legal norms of a state, they have expressive elements, and these are often addressed outside the nation state at an international community. Constitutions are signals of modernity and sovereignty, designed not only to empower a government but to secure recognition of that act on the international plane. The result is that there has been a significant amount of constitutional convergence. Consider menus of human rights, for example. Constitutional collections of rights have tended to converge over time, particularly following the passage of the major i­ nternational human rights instruments (Elkins and Ginsburg 2009). The international covenants and regional charters of rights serve as menus for constitution-­makers, and so it is hardly surprising that constitutions have become more similar to each other over time. There are many possible explanations for this phenomenon. Convergence may in part result from mimicry, in which countries need to signal their modernity and so adopt institutions most reflective of the international. It might alternatively reflect collective learning, as countries learn from each other and from international institutions about the quality of different institutional configurations. Whatever the explanation, the result is that constitutions can no longer be viewed, if they ever could, as exclusively local affairs. Contrast the situation in administrative law. Surveying global developments, the over-

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Written constitutions and the administrative state  63 arching impression must be one of continued stickiness of national institutional configur­ ations. Taking four major jurisdictions, France, Germany, the US and the UK, it is clear that great institutional and ideational divergence remains. France retains its tradition of oversight by expert administrators in the Conseil d’Etat, with the droit administratif considered a separate and autonomous body of law (Brown and Bell 1998). Germany too retains specialized administrative courts, but unlike the French tradition centers its practice around an administrative procedure code that embodies the principles to be overseen by judges. In scope, too, the traditions differ in that tort liability and government contract law are seen to be outside the realm of German administrative law.2 While it can also include general policy directions, German administrative law focuses more on individual rights-­type issues than on public participation in rule-­making, which is where much of the action is in American administrative law. In the UK, administrative law has long labored under Dicey’s suspicion of the very concept (Lindseth 2005, Williams 1994). Dicey saw virtue in control by the common law courts rather than a distinctive set of institutions, but as the modern state expanded, it became clear that the sheer volume of appeals would overwhelm the traditionally small English judiciary. The result was the creation of independent ‘tribunals’, distinct from the common law courts, to hear appeals from initial decisions by administrators. These are specific and specialized, tied to individual bureaucracies such as the Health Service, Immigration, and Social Welfare bureaucracies, although recent reforms under the Tribunals, Courts and Enforcement Act 2007 promise to consolidate the structure (Carnworth 2009). The  tribunals have a statutory obligation to deliver independent justice, and they rely on notions of ‘natural justice’ in developing constraints on administrative discretion and procedure. In the United States, in contrast, the Administrative Procedures Act focuses a good deal of its energy on the practice of rule-­making, and it is here that the largest battles in the administrative state are conducted. To be sure, there has been some convergence across jurisdictions in the norms of administrative law. Most major systems involve questions of balancing, proportionality and procedural transparency. One can generalize that in all four jurisdictions one can describe administrative law as largely judge-­made (counting the Conseil d’Etat as a judicial organ), in which courts apply a set of open-­ended standards to myriad factual situations. But each system remains its own distinctive animal. Furthermore, there is little of the transnational judicial borrowing that has drawn such attention in comparative constitutional interpretation. One of the reasons that administrative law may have converged less than constitutional law is the lack of agreement over the scope of the field. Constitutions, for nearly all modern states today, are defined in relation to (even if not exclusively bounded by) authoritative texts called constitutions. There is less conceptual agreement on the ­boundaries of ­administrative law: while all the administrative law schemes rely heavily on a notion of internal and external boundaries of the system, the precise lines differ (for example, with regard to where government contracts fall), as does the precise mix of tort

2   The scope of government liability is in fact less extensive in Germany than in France. In Germany, it is covered by principles of negligence, whereas in France, no-­fault liability for ­regulations is allowed (Singh 2001: 257).

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64  Comparative administrative law liability, judicial remedies and other mechanisms of control. Administrative procedure calibrates the rigidity of the boundaries and reflects different conceptions of public and private. For example, continental and Japanese systems draw on a strong conceptual distinction between public and private law. In the United States, the public-­private distinction is less rigid, with private law regularly utilized to accomplish regulatory ends, and hence the proper boundaries of administrative law as a field may be somewhat more open. The relative mix of natural law principles and positivistic focus on proper ­delegations also varies across systems. Institutional structures differ, too, with distinctive administrative courts in France and Germany, while the Anglo-­American systems rely on the generalized notion of the Rule of Law to subject the state to ordinary courts, on an equal footing as citizens. The systems also exhibit divergence on the extent to which administrative law has been developed primarily through case-­by-­case judicial decision-­making or through legislative exercises in codification; though again it must be said that judicial development has played a promin­ ent role nearly everywhere. In short, there may be less convergence in administrative law than in constitutional law, where judges regularly look to decisions of other courts, and constitutional drafters draw on foreign models. Forces against convergence in administrative law include institutional inertia, entrenched political interests, path dependencies, and cultural preferences that render some solutions unattractive in particular polities. Many scholars have argued that public law should see less convergence than corporate or private law because it reflects values rather than interests, and hence is less likely to be shaped by short-­term economic factors. Professor Schwarze (2004, see also Lindseth 2005), for example, catalogues the traditional arguments that administrative law expresses ‘national particularities’ and therefore is relatively impermeable to change. Administrative law concerns the control of regulatory institutions, and regulatory institutions are difficult to establish. Once established, they are even harder to get rid of. An alternative to eliminating agencies is to seek to exercise greater control over them, and administrative law becomes a natural solution. It is perhaps no surprise that all industrialized countries have developed extensive bodies of administrative law in the past century. But administrative procedures, like primary regulatory rules, also have the quality of establishing their own communities around them. The much-­criticized Administrative Procedures Act in the United States has never been changed despite numerous pro­posals to that effect. Nor is it likely that specialized administrative courts can be disbanded without a major constitutional revolution. While we have seen the establishment of new administrative courts and specialized benches (for example, in Korea, with similar ­proposals currently circulating in Japan), it is rare to see an administrative court merged into the ordinary court system. Indeed, in the French case, the Conseil Constitutionnel has even held that one has the right to recourse to an administrative judge. In short, then, inertia can make switching costs of change prohibitive and the disbanding of institutions difficult. Thus we see substantial divergence in the structures of administrative law. A corollary of this continued divergence is that administrative law systems reflect localism more than constitutional law, which is now embedded in open and vigorous transnational dialogues about particular issues (Jackson 2009).

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Written constitutions and the administrative state  65 1.2  Endurance: Administrative Law Institutions Endure, while Constitutions do not Constitutions are defined by entrenchment, and their authors and audiences presuppose that they provide a set of relatively enduring norms. To be sure, constitutions are subject to amendment procedures, but these are assumed to be exercised relatively infrequently and only for issues of sufficient importance. Constitutions are higher law and hence to be protected against frequent change. Indeed, the very notion of constitutionalism presupposes a certain level of endurance. Yet written constitutions do not endure in most countries (Elkins et al. 2009). Even among industrial democracies, France (with its 11 constitutions since 1791) is more typical than the United States, with its venerable 220-­year old document. In Western Europe, the region of the world where constitutions are most enduring, the average document will last only about 30 years, and the figure for countries in other parts of the world is much lower. Constitutional change is sometimes associated with drastic changes in the character of the regime, in the design of political institutions, and the mechanisms of ensuring political accountability. Contrast administrative law institutions. The venerable Conseil d’Etat has survived episodic swings between monarchy and republic, presidentialism and parliamentarism, dictatorship and democracy. It has maintained a relatively autonomous system of monitoring bureaucratic behavior and ensuring legality in administration. (Indeed, one might argue that the formal constitution matters less in the French tradition precisely because the autonomous state endures.) Nor is France alone. The Swedish ombudsman institution dates back to 1809 and has survived major transformations of the political structure. And distinct administrative courts in the German tradition have been enduring.3 The Soviet procuracy survived myriad constitutional changes, and indeed has retained its role of general supervision in some post-­Soviet constitutions notwithstanding complete regime transformation. When one moves beyond Western Europe, constitutions become more ephemeral but administrative law structures may be relatively stable. Thailand, with its 18 constitutions since 1932, may be an extreme case, but bureaucratic autonomy centered around a Council of State has been an enduring feature.4 Similarly, the institution of amparo in Latin America has enjoyed widespread and continuous usage, notwithstanding constitutional instability (Brewer-­Carias 2008). Institutional structures are distinct from legal norms. The norms of administrative law do change with developments in technology, with ideas about rights, and with the emergence of communities of accountability, all of which may reflect changes embodied in constitutional texts. Nevertheless, this discussion suggests that administrative law structures are relatively enduring, in many cases more so than constitutional regimes. Indeed,

3   Japan did change its structure of administrative law with the 1946 Constitution, shifting away from the German tradition of distinct administrative courts toward the American model of unified jurisdiction. Some attribute Japanese judges’ reluctance to challenge administrative action to the institutional residue associated with this shift – ordinary judges do not have confidence in their ability to second guess administration (Haley 1991). 4   The 1997 Constitution corresponded with the introduction of an administrative court that did have important ramifications for Thai administrative law. But this was the exception that proved the rule (Leyland 2008).

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66  Comparative administrative law endurance at the administrative level may ameliorate the negative effects of instability at the constitutional level: whatever the machinations over political institutions, citizens may enjoy relative predictability in relations with the state bureaucracy. 1.3  Symbolism: the Inferiority of Administrative Law Systems To summarize the argument so far, administrative law is enduring and it retains a local quality even in an era of globalization. Constitutional law, in contrast, is increasingly transnational as well as, too frequently, transitional. One might then view administrative law regimes as better embodying constitutional values than constitutions themselves. One distinct feature of national constitutions, however, is their ability to bind the polity together through symbolic expression. Not all constitutions effectively play this role, but it is an aspiration of many. In contrast, administrative law is rarely ascribed symbolic resonance. Few are willing to die for the principle that expert regulators ought to hold a public hearing before deciding how many parts per million of a pollutant can be released by a smokestack, or that an individual has a right to pre-­deprivation hearing regarding loss of social security eligibility. Here, then, we expose what is truly distinctive about constitutional law, and the one sense in which constitutions can be said to be more constitutional than administrative law regimes. Constitutions express ideas about the polity, and do so largely on an international stage. We the People are signifying that we are not those other people, and so adopt statements of our distinct national character embodied in constitutional institutions. And because the statements are directed, to some degree, outside the state, they require a common language to be understood. Convergence in constitutional vocabulary in some sense facilitates the distinct ­communicative quality of written constitutions. Perhaps it is too much to say that administrative law systems lack symbolic value. Some scholars have talked about the communicative and legitimating virtues of administrative process. But one would be hard-­pressed to argue that the degree of symbolic importance attached to administrative law systems approaches that of constitutions. Written constitutions embody moments of great struggle and high stakes, and hence mark the great junctures of national history.

2. WRITTEN CONSTITUTIONS AND THE ADMINISTRATIVE STATE This part of the chapter examines the constitutional treatment of administrative law. In general, written constitutions tend to say relatively little about the administrative state, though the establishment of a government structure is a core function of constitutions. While the rules governing selection and activities of executives and parliaments are described in great detail, the sub-­political institutions of government are not consistently or thoroughly regulated. Written constitutions tend to focus on providing chains of accountability and democratic legitimacy for the decisions of administrators, rather than detailed rules regulating the administration. In other words, constitutions tend to regulate administration structurally rather than legally. A search of several hundred contemporary and constitutional texts reveals that only a

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Written constitutions and the administrative state  67 handful mention the bureaucracy at all, and often use bureaucracy as an epithet.5 In terms of legal constraint on the state, general due process-­type considerations may apply particularly to administrative agencies.6 But provisions such as South Africa’s Art. 33, constitutionalizing rights to ‘lawful, reasonable and procedurally fair’ administrative action and a right to receive reasons for adverse actions, are truly exceptional.7 General due process requirements, which are found more broadly (roughly 10% of national ­constitutions) are on their face frequently restricted to criminal proceedings, and hence may not automatic­ ally facilitate judicial oversight of administration. What one does see is that written constitutions reflect developments in the technology of governance. Thus, the creation of the independent regulatory agency is reflected in constitutional texts: the US Constitution of 1789 of course does not mention any independent agencies (it barely mentions ‘departments’), while the average constitution drafted in the 1990s mentions more than three such bodies. And certain administrative law institutions, like the ombudsman or human rights commissions, have become more popular: roughly 20% of constitutions currently in force provide for an ombudsman, for example. A smaller number, less than 10%, provide for a counter corruption commission. Historically, the regulatory body most relevant to checking the administrative state is a council or court of audit, and these institutions are relatively frequently observed: nearly 20% of all constitutional texts coded to date in our project (700 total) include some agency designed to supervise accounts or audit.8 Another way in which constitutions may affect the administrative state is through the establishment of a public service commission or other device to guarantee meritocratic employment practices. In many societies, state jobs are highly desirable and so the temptation to utilize them as a form of patronage is great. A pre-­commitment to meritocracy is a constitutional function. As early as 1824, Brazil’s Constitution felt the need to say that ‘all individuals are equal to occupy public offices; talent and virtues will determine if a person can occupy a public office’.9 The Republic of China went so far as to establish an entire branch of government, the Examination Yuan, just to administer state exams. This body still functions in Taiwan today, and as a formal matter has equal status with the Legislative and Executive branches of government. Its head is equivalent to the Premier. The Republic of China also established a ‘Control’ branch of government, set up to audit and fight corruption. Though these innovations have not been borrowed elsewhere, their motivation is widespread. Finally, constitutions engage with administrative law through the designation of administrative court systems. These are found in countries from Mexico to Mongolia,

5   For example, the Constitution of Vietnam (1992), Art. 112 (power of government to ‘fight against bureaucracy’ in state administration). The sample is from the Comparative Constitutions Project, www.comparativeconstitutionsproject.org. 6   For example, the Constitution of Dominican Republic (1966), Art. 8.2.j (no sentence without procedure established by law); Constitution of Ireland 1937, Art. 38 (no person shall be tried on any criminal charge save in due course of law). 7   See also Draft Constitution of Kenya (1999), Art 70. 8   For details, see www.constitutionmaking.org and www.comparativeconstitutionsproject.org or contact author. 9   Art. 179.14.

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68  Comparative administrative law though they are not always constitutionalized (only about 2% of cases in our sample include them). Even the French Constitution makes only incidental reference to the Conseil d’Etat, which is not properly speaking a creature of the political constitution. But the designation of an administrative jurisdiction can have very important consequences on the ground. In some transitioning democracies, it is the administrative courts rather than the higher profile constitutional court that have actually served to constrain the state. Two examples here are Indonesia (Bedner 2001) and Thailand (Leyland 2008). In each case, a constitutional court created as part of a transition to democracy was set up alongside a new or recently created administrative court. In each case, the constitutional court was called on to adjudicate high-­profile political issues that led to a political backlash against the court. In contrast, the administrative law systems worked at a lower level of government and served to provide, for the first time in many areas, genuine legality in administration. This is an example of how a lower-­profile administrative court may have more impact in furthering constitutionalist values than a higher-­profile ­constitutional court. In short, written constitutions are short on detail about legal control of administration. Administrative action is regulated through structural provisions on the design of government and accountability chains, through the creation of specialized monitors such as ombudsmen and administrative courts, and through provisions requiring merit-­based selection of agents. To understand the functioning of administrative law in various countries, written constitutions turn out not to be very helpful, notwithstanding the ­constitutional character of many of the norms and purposes of administrative law.

3. ADMINISTRATIVE LAW SYSTEMS AS AN ELEMENT OF THE UNCODIFIED CONSTITUTION In recent years, scholars have renewed their attention to the so-­called unwritten constitution (Grey 1978, Ackerman 2007, Young 2008, Tribe 2008). It has, of course, long been recognized that, in any constitutional system, the language of constitutional text is modified and interpreted by political actors and courts. In the United States, judges of the Supreme Court have filled in the details of the vague 18th century document to make it suitable for modern life, notwithstanding the lack of explicit textual basis for constitutional review. More broadly, extraconstitutional mechanisms of constitutional change have in some sense involved or relied on unwritten constitutional conventions (Ackerman 1993, Munro 1928, Tiedeman 1890). Constitutional functions are also performed by written texts beyond the constitution itself. Some statutes have been considered to be ‘super-­statutes’ that are practically entrenched, even if not formally so (Eskridge and Ferejohn 2005). Although the writers on super-­statutes focus on particular regulatory instruments, such as the Sherman Antitrust Act and the Civil Rights Act of 1964, procedural laws surely fit into the category in the sense of meeting criteria of de facto entrenchment and substantive reach. Administrative procedures laws are meta-­regulations, designed to govern the way in which substantive regulations are generated and operate. It seems difficult to exclude the US Administrative Procedures Act, for example, from the scope of the ‘constitution outside the constitution’.

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Written constitutions and the administrative state  69 Perhaps, then, the analysis here suggests the need to keep our eyes wide in looking for legal instruments that embody constitutionalism. The core critique of the uncodified constitution is, unsurprisingly, rooted in the lack of a rule of recognition. Without a clear rule that helps to identify particular norms as constitutional or not-­constitutional, the boundaries of the category become fuzzy. But the discussion at the outset of this chapter seems potentially helpful for articulating constitutional boundary criteria. Constitutions, we have seen, focus on regulating interactions between the state and the people, and are at least imagined to be relatively enduring. In considering what norms outside the constitution might be considered uncodified constitutional norms, it seems clear that those rules that are relatively enduring, and purport to regulate the relationship between the state and society, should be within the definition. What are the normative consequences of treating administrative law systems as essentially constitutional in character? First, such constitutional realism helps us to focus on those areas where constitutionalist values are most frequently encountered, even if not always the matters of the highest stakes. Routine matters like drivers’ licenses and building permits make a difference to more people than the high principles of constitutional text, even if they do not always carry great symbolic weight. Second, this focus on the micro-­ level interactions of citizen and state draws needed attention away from the constitutional courts, heretofore considered central actors in upholding the rule of law. Constitutional courts, by the very nature of their exclusive and high jurisdiction, frequently become embroiled in high profile politics that can undermine rather than enhance their ability to constrain the state. Administrative courts may in such circumstances be more import­ ant on a number of levels. Finally, such an approach helps to highlight the importance of the discipline of comparative administrative law. While the field is still nascent, the various contributions in this volume help to draw out the rich array of possibilities for the discipline.

REFERENCES Ackerman, Bruce. 1993. We The People, Cambridge, MA: Harvard University Press. Ackerman, Bruce. 2007. ‘The Living Constitution’, Harvard Law Review, 120: 1737–812. Ahdieh, Robert B. Forthcoming. ‘The New Regulation: From Command to Coordination in the Modern Administrative State’, manuscript. Barros, Robert. 2002. Constitutionalism and Dictatorship: Pinochet, the Junta, and the 1980 Constitution, New York: Cambridge University Press. Bedner, Adriaan. 2001. Administrative Courts in Indonesia: A Socio-­ legal Study, Boston: Kluwer Law International. Boli, John. 1987. ‘Human Rights or State Expansion? Cross-­national Definitions of Constitutional Rights, 1870–1970’, in George Thomas et al., eds., Institutional Structure: Constituting State, Society, and the Individual, Beverley Hills, CA: Sage Publications. Boli-­Bennett, John and John W. Meyer. 1978. ‘The Ideology of Childhood and the State’, American Sociological Review, 43: 797–812. Boli-­Bennett, John and John W. Meyer. 1980. ‘Constitutions as Ideology’, American Sociological Review, 45: 525–27. Breslin, Beau. 2009. From Words to Worlds: Exploring Constitutional Functionality, Baltimore, MD: Johns Hopkins University Press. Brewer-­Carias, Alain. 2008. The Constitutional Protection of Human Rights in Latin America: A Comparative Study of Amparo Proceedings, New York: Cambridge University Press. Brown, Nathan. 2008. ‘Reason Interest Rationality and Passion in Constitution Drafting’, Perspectives on Politics, 6: 675–89.

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70  Comparative administrative law Brown, Neville L. and John S. Bell. 1998. French Administrative Law, 5th edition, New York: Oxford University Press. Carnworth, Robert. 2009. ‘Tribunal Justice: A New Start’, Public Law, 2009: 48–69, at http://www.chba.org.uk/ library/seminar_notes/?a=75725. Elkins, Zachary and Tom Ginsburg. 2009. ‘Constitutional Convergence in Human Rights’, manuscript. Elkins, Zachary, Tom Ginsburg and James Melton 2009. The Endurance of National Constitutions, New York: Cambridge University Press. Eskridge, William and John Ferejohn. 2005. ‘Super-­statutes’, Duke Law Journal, 50: 1215–75. Go, Julian. 2003. ‘A Globalizing Constitutionalism? Views from the Postcolony, 1945–2000’, International Sociology, 18: 71–95. Grey, Thomas C. 1978. ‘Origins of the Unwritten Constitution: Fundamental Law in American Revolutionary Thought’, Stanford Law Review, 30: 843–93. Haley, John. 1991. Authority without Power: Law and the Japanese Paradox, New York: Oxford University Press. Jackson, Vicki C. 2009. Constitutional Cosmology and Transnational Engagements, New York: Oxford University Press. Leyland, Peter. 2008. ‘The Emergence of Administrative Justice in Thailand under the 1997 Constitution’, in Tom Ginsburg and Albert Y.C. Chen, eds., Judicialization and Governance in Asia, London: Routledge. Lindseth, Peter. 2005. ‘“Always Embedded” Administration: The Historical Evolution of Administrative Justice as an Aspect of Modern Governance’, in Christian Joerges, Bo Strath and Peter Wagner, eds., The Political Construction of Modern Capitalism, London: GlassHouse Press. Lollini, Andrea and Francesco Palermo. 2009. ‘Comparative Law and the “Proceduralization” of Constitution-­ building Processes’, in Julia Raue and Patrick Sutter, eds., Facets and Practices of State-­Building, Boston: Martinus Nijhoff, 301–26. Munro, William Bennett. 1928. Makers of the Unwritten Constitution, New York: Macmillan. Schwarze, Jürgen. 2004. ‘Enlargement, The European Constitution, and Administrative Law’, International and Comparative Law Quarterly, 53: 969–84. Singh, Mahendra P. 2001. German Administrative Law in Common Law Perspective, 2nd edition, New York: Springer. Tiedeman, Christopher. 1890. The Unwritten Constitution of the United States, New York: G.P. Putnam and Sons. Tribe, Laurence. 2008. The Invisible Constitution, New York: Oxford University Press. Williams, David. 1994. ‘Law and Administrative Discretion’, Indiana Journal of Global Legal Studies, 2: 191–211. Young, Ernest A. 2008. ‘The Constitution Outside the Constitution’, Yale Law Journal, 117: 100.

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5.  Comparative positive political theory and empirics M. Elizabeth Magill and Daniel R. Ortiz

Little in the last thirty-five years has so changed thinking about American administrative law as Positive Political Theory (PPT). Before PPT emerged, American administrative law scholarship largely focused on how doctrine fit together, how we should reform it to promote particular normative aims, how it expressed the commitments of larger political theory, and how it furthered or frustrated effective administration. At its apotheosis in Richard Stewart’s The Reformation of American Administrative Law (1975), it did all these things—and more—in aid of tracing American administrative law’s development. Soon, however, political scientists encroached on the field. They brought a set of tools to the study of administration that they had designed to analyze how political institutions function. The PPTers, in particular, ‘focused on how political institutions and the career objectives of elected officials shape political decisions’ (McNollgast 1999: 182). They sought to explain, among other things, why Congress imposed particular procedures on agency decisionmaking, how formalizing decisionmaking empowered various groups, and how agencies and courts could play their own interests off against the interests of the political masters they were supposed to serve. Their insights complicated ‘faithful agent’ models of administration and highlighted how agencies and courts could and, to some degree, did follow their own interests. Their arguments swept broadly and offered provocative, often cynical, interpretations of administrative rulemaking, judicial review, and effective separation of powers. PPT not only challenged much conventional thinking but also cast some long-accepted features of American administrative law into normative doubt. McNollgast, a shorthand for co-authors, Matthew McCubbins, Roger Noll, and Barry Weingast, argued, for example, that the traditional understanding of why Congress had enacted the Administrative Procedure Act (APA) got things almost exactly backwards. Far from ‘codify[ing] and rationaliz[ing the] existing practice of procedural due process that had percolated in a haphazard manner through the courts in the 1930s’ (McNollgast 1999: 181), McNollgast argued that it represented an effort by progressive New Dealers to consolidate their political achievements in the face of a likely Republican President (McNollgast 1999: 182–3, 189–215). In their account, New Dealers believed it better to give federal judges—who had mostly been appointed by Roosevelt—the power to superintend agency action rather than to allow a possible Republican President to roll back the New Deal itself. The fact that the Democrats bought off Republican opposition by giving business interests heightened procedural protections only shows how deeply they feared a change of Presidents. The McNollgast story explains the APA not as public interest legislation designed to require agencies to meet evolving standards of due process but rather as a political compromise that promoted the private interests of both the Democrats’ and Republicans’ core constituencies. PPT claims like these engaged, surprised, and thrilled all at once. So far, PPT has largely had domestic bite inside the United States. Although many 71 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 71

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72  Comparative administrative law have employed it to analyze features of the American administrative process, commentators are only now beginning to apply it to administrative law elsewhere (Ip 2015; RoseAckerman, Egidy, and Fowkes 2015). Our aim is not to extend its reach but is much more modest—to test it comparatively. How well does it explain the administrative law regimes of very different political cultures? If it fits well, we would not only learn more about the administrative law of other jurisdictions but also gain confidence in PPT’s domestic application. If it fails to fit, we might question the methodology itself and ask whether its explanations of American administrative law are anything more than sophisticated ‘just so’ stories. To answer this question authoritatively, one would need to apply PPT comparatively to many features of many different democracies’ administrative law. That would be impossible within the scope of a single chapter. Instead, we explore how well PPT explains one central feature of many administrative law systems—judicial review of agency action— along one primary constitutional dimension—whether the government is presidential or parliamentary. One would think that, under PPT, such a large structural difference might matter to judicial review. We discuss in particular judicial review for administrative reasonableness. In the United States, this consists primarily of so-called ‘arbitrary and capricious’ review under § 706 of the APA. In many other countries, it is known as ­‘proportionality’ or ‘irrationality’ review. We admit that this choice may reflect an American bias. ‘Arbitrary and capricious’ review takes up much, perhaps too much, of the basic American law school course in Administrative Law and appears to obsess American legal academics. It is perhaps a less critical feature elsewhere. Still, PPT should be able to predict where judicial review generally and reasonableness review, in particular, would be more or less important and offer reasons why it would be so. Does PPT pass this simple comparative test?

1. PPT PREDICTIONS ABOUT JUDICIAL REASONABLENESS REVIEW IN PRESIDENTIAL AND PARLIAMENTARY SYSTEMS 1.1  The Difference a Structural Alignment of Interests can Make Perhaps the most important structural difference among advanced democracies is whether they adopt a presidential or a parliamentary system. In a strong presidential system, like the United States, the executive and the legislature are elected independently, from different constituencies, and often at different times. If only because of this, PPT would predict that these two ‘political institutions and the career objectives of [their] elected officials [would] shape political decisions’ differently (McNollgast 1999: 182). At the extreme, different parties control these two different branches of government. Because each party seeks support from different groups, each branch would then pursue very different policies. One branch will try to reward some groups; the other, quite different ones. Only in that way can they count on continued financial and political support from their different constituencies. Even when the same party controls both branches, however, strong differences can emerge. To a PPTer, the President and members of Congress alike will be primarily inter-

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Comparative positive political theory and empirics  73 ested in reelection—unless the Constitution’s term limits make that impossible for the President or an elected official has chosen to retire rather than face reelection. They may also be interested in carrying out their own or their party’s favored policies and perhaps establishing a legacy. When it applies, however, the reelection interest is paramount. To increase his chances of reelection, each elected official will try to further policies that his particular constituency favors, whether it be the nation, a state, or some smaller geographical district. The interests of these constituencies vary greatly. Many congressional districts have interests more homogenous and idiosyncratic than those of the state they are in—witness the political geography of California or New York—and many states, in turn, have interests more homogenous and idiosyncratic than those of the nation as a whole—witness Alaska and Hawaii, or even Iowa and Michigan. Elected officials will also seek to increase their chances of reelection through campaign financing. They will try to appeal to interests that will give them money for their campaign war chests. Because the President has ultimate authority over nearly all federal programs, she can appeal to many different well-funded interests for campaign contributions by dangling the carrot of policies they prefer. Legislators, except perhaps for those in charge of each chamber, can make only more limited appeals. Because, as individuals, they have most power in their committees, they will appeal mostly to any well-funded interests that care about the policies handled by those committees. Thus, members of a banking committee will make appeals to banks, whereas members of a communications committee will make appeals to broadcasting and telecommunications interests. Broader-based political party campaign committees will, of course, make wider appeals and try to persuade their members to toe the party line in return for campaign contributions, but because party discipline is only partially effective and members can often raise money more successfully themselves, these wider, party fundraising efforts only partially distract party members from supporting the interests of their narrower fundraising targets. In a strong parliamentary system, like the United Kingdom, by contrast, the legislature chooses the executive, either formally or informally, and hence the executive has few independent interests. The same party or group of parties controls both branches and voters elect representatives less because of what they individually represent and more because of what their party and its leaders stand for. If, in 2015, one wanted David Cameron to be Prime Minister, one simply had no choice but to vote for the local Conservative Party candidate for Parliament. Parliamentary members of the majority party who are not members of the executive branch realize that their own individual fortunes will rise and fall with the government’s. Hence, their interests largely merge with the party’s. A Conservative member, in other words, would have understood that his own fortunes, to a very large degree, depended on the party leader rather than on anything he himself could do. Not only is government not divided, but also individual parliamentarians will largely support or oppose the government according to the party they represent. Except in a few uncontroversial matters or matters of conscience, members of the majority party will support that party and those in the minority party will oppose it. In a real sense, the interests of individual parliamentarians lie with their party, and the interests of the executive, the legislature, and the majority party are one. This is also true of fundraising. Parties rather than individuals tend to harvest interest groups, and thus the financial interests of individual elected officials largely follow those of their party. These differences make changes in statutory law more difficult in a presidential system.

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74  Comparative administrative law In order to change a law without resort to difficult-to-achieve supermajorities, the President and both houses of Congress must support the change. Even when a single party controls all three institutions, this can be difficult. Committees and subcommittees, which can represent very different interests than the house as a whole, can serve as veto points and frustrate majorities in each house. And the chairs of these subunits, who may have somewhat different interests still, wield disproportionate power in setting their agendas. In short, to change a law, not only must the President and majorities of both houses agree, but also key individuals, like committee chairs, and groups of individuals, like the relevant committees, must usually support the change as well. Potential vetoes lie in several different directions at once. And as the number of players who must assent increases, so too does the difficulty of making change. In a strong parliamentary system, by contrast, once the controlling party or parties agree, change can more easily occur. Of course, in a multi-party coalition under a system of proportional representation the governing coalition itself may disagree on policy priorities, but if the party leaders can negotiate a deal, they can expect support from the rank and file. All the necessary players will have largely the same interests, and they will have the necessary numbers to overcome opposition. In both presidential and parliamentary systems, of course, limited legislative ‘budgets’ will constrain how much change any government can achieve, but in the parliamentary system the unified government can within that budget at least achieve its leaders’ most sought objectives and the cost of passing each individual piece of legislation is likely to be less. At the administrative level the situation is very different. In a presidential system, agency officials may have more opportunity to change policy. They recognize that they can change policy without fear of statutory roll-back so long as just one of the people or bodies who hold veto power over potential legislation prefers the new policy to the earlier one. This gives agency officials much room to maneuver policy. The different preferences of those who hold a veto over possible corrective legislation open up a ‘gridlock’ space within which the agency can move in order to maximize its own interests (Ferejohn and Shipan 1989: 393). In a parliamentary system, agency officials’ use of gridlock is more difficult. The alignment of the executive and legislature through single-party or single-coalition control squeezes out most space for the agency to move independently. An agency that moves away from the preferences of the controlling party will usually find itself corrected through legislation—although that will seldom be necessary. As Bruce Ackerman has noted, this difference between presidential and parliamentary systems leads to agency officials behaving quite differently (Ackerman 2000: 698–9). In presidential systems, they will try to exploit differences among their political masters to neutralize opposition to their own initiatives. In parliamentary systems, they will largely seek to faithfully serve those in power—whatever their own interests. 1.2  Any Value to Judicial Review? What do these differences portend for administrative judicial review? PPT holds that judicial review serves three primary functions. First, it serves to check executive hijacking of agency policymaking. Under this view, the legislature in a presidential system will fear that the executive, which has more direct and meaningful control over agency

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Comparative positive political theory and empirics  75 a­ ctivities though its budgeting, appointment, removal, and general supervisory powers, not to mention its greater ability to monitor, will lead agencies to serve their own interests rather than those of the legislature. In a parliamentary system, however, the legislature will little fear that the executive will thwart the majority’s interests. Because the majority party or coalition controls both branches, those interests will be the same. Review by an independent ­judiciary could only frustrate the executive’s pursuit of joint executive and legislative interests. Second, judicial review can serve as a check against rogue agencies, ones that follow their own interests at the expense of those of both the executive and the legislative masters that they should serve. Here too there is much less need for judicial review in a parliamentary system. Because the smaller and softer ‘gridlock’ space gives agencies less incentive and ability to follow their own interests and because statutory corrections are easier to impose if they do, independent superintending agents like courts are less desirable. Simply put, the more unified the principal, the shorter the leash on which the agent can roam and the more difficult it will be for the agent to follow its own preferences. There will thus be less need for judicial review. Third, judicial review can serve to entrench the preferred policies of an enacting legislature or enacting legislature and President against future changes in government. This may well be true in a presidential system. Knowing that agencies in the future may be tempted to exploit the ‘gridlock’ space, the enacting players may want other agents, like independent courts, to monitor and discipline agencies in order for the original policies to stick. This is true even if these additional agents create new agency costs so long as these new costs are balanced by the benefits of better control over the administrative process. In a parliamentary system, however, judicial review of this kind makes much less sense. Because it knows that future governments will be controlled by a single party or coalition which can easily change the law to reflect its own views of good policy, there is little an enacting legislature can do to protect its favored interests against that possibility. Without the possibility of a future ‘gridlock’ region created by multiple strong veto points, much less entrenchment can occur. In any event, the enacting legislature would have little incentive to exploit such a possibility even if it existed. As Bruce Ackerman has noted, in a parliamentary system, a majority or minority party member’s reelection rests largely on the success of the government and its programs. If voters believe that a government is acting effectively, they will reelect it by reelecting its members to Parliament. If they do not believe it is acting effectively, they will throw it out by voting against its individual members or its party list, depending upon the voting rule. Both parliamentarians in and out of power, then, will want to be able to change policy when voters believe it is ineffective (Ackerman 2000: 698). Neither side will wish policy to be ‘sticky.’ Giving courts the power to encourage agencies to follow the policies of the enacting Parliament against those of later ones—or even against later views of the enacting Parliament itself—is thus not something anyone in either the majority or minority party in the enacting Parliament itself wants. For all three possible reasons, then, PPT would predict that judicial review would be much more limited in domain and less searching in application in a parliamentary than in a presidential system.

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76  Comparative administrative law

2.  COMPARATIVE PERSPECTIVES Positive political theory tells a story about judicial review of administrative action in the US, and in this Part we start the task of evaluating whether its predictions are validated comparatively. A complete comparative analysis would consider every aspect of judicial review of administrative action, and other features of the administrative state as well, across presidential and parliamentary systems. That task is well beyond the reach of this short chapter. Instead we start the comparative task by examining four national approaches to just one important feature—judicial review of administrative action. We focus on the review that courts conduct when they evaluate agency exercises of discretion. In the US, that review goes under different names, but we will call it ‘reasonableness review.’ After outlining such review in the US we will look for analogous features in the systems of judicial review of administrative action in the UK, France, and Germany. The results of this preliminary investigation cast doubt on the PPT explanations for US administrative law—at least in their strong, exclusive present form. 2.1  Reasonableness Review in the US In evaluating agency exercises of discretion, American courts will ask whether the action was ‘arbitrary and capricious,’ a standard supplied by the APA.1 Courts often state that ‘arbitrary and capricious’ review is deferential to agencies. This is sometimes true, but its intensity varies with context. If an agency has exercised its discretion on an import­ ant matter, reasonableness review under the arbitrary and capricious test can be quite searching. Consider a foundational case, Motor Vehicle Manufacturers Association of the US v. State Farm Mutual Automobile Insurance Co.2 There, the US auto safety agency decided to rescind its prior ‘passive restraint’ requirement. Under that pre-existing requirement, auto manufacturers were required to install passive restraints—either airbags or automatic seat belts—in newly-manufactured cars. Before that obligation became effective (and after a new President was elected), however, the agency, revoked the requirement. It was clear that this was a result that the agency could have reached under the statute because the statute did not require passive restraints. Thus, the question was whether the agency had appropriately exercised the discretion granted to it under the statute. The Supreme Court set aside the agency’s action because the agency had failed to engage in reasoned decisionmaking as it exercised its discretion. The agency had explained that it planned to revoke the requirement because it would not achieve the safety benefits that the agency had originally anticipated. That was because the agency now predicted that, given a choice between airbags and automatic seat belts, most auto manufacturers would choose to install automatic seat belts, and automatic seat belts did not provide sufficient safety benefits to justify the requirement. To the Supreme Court, this reasoning failed on two counts. The Court observed that the agency had failed to consider an obvious alternative policy choice—namely, a mandatory airbag requirement. More than

1 2

  5 U.S.C. §706(2)(A).   463 U.S. 28 (1983).

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Comparative positive political theory and empirics  77 that, although the Court confessed this was a closer question, the agency had too quickly dismissed the safety benefits of automatic seat belts. On both grounds, the agency failed to justify its policy choice and the Supreme Court therefore set aside the agency’s revocation of the rule. This brief excursion into reasonableness review in US administrative law cannot adequately capture all of its contours. But it is not necessary to measure perfectly the real meaning of reasonableness review in order to conduct a comparative analysis. All that one needs to know is that reasonableness review often results in the invalidation of important agency action and that the threat of this occurring is real enough that agencies and those who follow what they do consider it as they conduct their business. 2.2  Reasonableness Review in the UK We start with the UK where, if the PPT explanation of judicial review of administrative action (and in particular reasonableness review) is correct, we would expect to see different patterns than those observed in the US. To the extent that reasonableness review in the US is a product of a constitutional design that separates lawmaking power between a Congress and an independently elected President, as the PPT story would have it, one would expect to see a different approach in the UK. There, the party in power controls all lawmaking, a stark contrast with the US system of separated powers. In such a system, although the parliamentary majority may have much to fear from the bureaucracy, it need not worry that it is being supervised by a rival political principal elected by a national constituency. Although the PPT story would suggest very limited judicial review of administrative action, that is not what one finds in the UK. Commentators there have observed that administrative law is relatively ‘activist’ as the result of developments in the last four decades or so (Wade and Forsyth 2004: 17–18; Tompkins 2003: 63; Jones and Thompson 2002: 250). The question is how do UK courts evaluate exercises of discretion? Judicial review of discretion can have real bite. In a classic case, Lord Diplock identified three broad grounds for setting aside administrative action: illegality; irrationality; and procedural impropriety.3 Under the first two, courts evaluate discretionary choices and both have features that resemble reasonableness review in the US. Assessment of the first ground, whether the body operated illegally, or ultra vires, includes an assessment of whether the body considered the proper factors when it made its decision. A public body must only consider matters that are ‘relevant’ (and not consider matters that are ‘not relevant’) when exercising its lawfully conferred powers (Jones and Thompson 2002: 239–40; Sunkin 2004: 754–69). In order for a court to assess whether a public body took account of only relevant factors and disregarded irrelevant factors, the court must know what factors a public body considered. Thus the relevancy principle presupposes that courts will both elicit and assess the factors that formed the basis of the public body’s decision. That bears more than a passing resemblance to US reasonableness review, which is built around judicial evaluation of the soundness of the reasons that the government offers for its action.   Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374 at 408.

3

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78  Comparative administrative law It is difficult to assess precisely how much this relevancy principle limits public action in the UK and, in turn, compare it to the constraints that US reasonableness review imposes on government action. What is clear, however, is that the obligation to consider only relevant factors is not one that the courts invoke only when the government has passed the test. The principle has been used to set aside a wide variety of public actions. A local government’s consideration of non-economic matters in setting wage rates has been held unlawful, as has the Home Secretary’s consideration of the public’s reaction when setting a punishment for juveniles convicted of a crime.4 The second ground for setting aside administrative action overlaps with the first, and even more obviously resembles US reasonableness review. A public body’s action can be set aside as ‘irrational’ or ‘unreasonable.’ These terms are remarkably similar to the verbal formulation central to US reasonableness review. Indeed, a leading treatise notes that the terms ‘arbitrary and capricious’ (the precise terms of US reasonableness review) are sometimes used interchangeably with ‘unreasonable.’ (Wade and Forsyth 2004: 354). The reasonableness principle applies to administrative acts as well as delegated legislation (Wade and Forsyth 2004: 880–83).5 The invocation of similar words, especially when those words are as open-ended as ‘reasonable’ or ‘arbitrary’, does not necessarily mean that the standards are in fact similar. Whether they are similar depends on the real meaning of such open-ended standards in decided cases, an issue about which commentators in the past disagreed. Some described these principles as highly deferential (Stone Sweet and Mathews 2008: 146; Law 2005: 667, note 48), while others took the opposite view (Wade and Forsyth 2004: 353). But there is now agreement on some matters that suggest a degree of similarity between the US and the UK systems. Reasonableness review in the UK can include an assessment, not simply of whether the discretionary choice was consistent with the statute, but (even if consistent with the statute) whether it was reasonable, that is, whether the discretion was soundly exercised (Craig 2004: 833). And, courts assessing the reasonableness of government action have become more skeptical of government action over time. As Wade and Forsyth put it, ‘The principle of reasonableness has become one of the most active and conspicuous among the doctrines which have vitalized administrative law in recent years.’ (Wade and Forsyth 2004: 353). Review for ‘reasonableness’ has also generated an ongoing debate in the UK about whether proportionality, a well-established principle in continental Europe and a general principle of the European Community, should become a ground for setting aside administrative action in the UK. Proportionality, which has German origins, is an analytic framework that requires judges to engage in a balancing determination aimed at assuring that the government’s action intrudes no more than is necessary to achieve acceptable state ends (Stone Sweet and Mathews 2008: 74–6). In the UK, proportionality review has historically been more skeptical of government actions than has been traditional, so-called Wednesbury reasonableness review (Law 2005: 714). Some have worried that

4   Roberts v. Hopwood [1925] AC 578 (non-economic considerations in the setting of wage rates); R. v. Secretary of State for the Home Department, ex parte Venables, [1997] 3 All ER 97 (considering public reaction in setting punishment for juveniles). 5   R. v. Customs and Excise Commissioner ex parte Hedges and Butler Ltd. [1986] 2 All ER 164.

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Comparative positive political theory and empirics  79 proportionality review amounts to review of the merits (Craig 2004: §15.A.(5)).6 As the Court of Appeal has noted, however, stricter proportionality review has despite these concerns now largely overtaken Wednesbury review: [T]rying to keep the Wednesbury principle and proportionality in separate compartments is unnecessary and confusing. The criteria of proportionality are more precise and sophisticated. It is true that sometimes proportionality may require the reviewing court to assess for itself the balance that has been struck by the decision-maker, and that may produce a different result from one that would be arrived at on an application of the Wednesbury test. But the strictness of the Wednesbury test [i.e., that the agency’s action was ‘so unreasonable that no reasonable ­authority’7 could have made it,] has been relaxed in recent years even in areas which have nothing to do with fundamental rights. The Wednesbury test is moving closer to proportionality, and in some cases it is not possible to see any daylight between the two tests. Although we did not hear argument on the point, we have difficulty in seeing what justification there now is for retaining the Wednesbury test.8

And the commentators agree. ACL Davies and JR Williams have noted a ‘blurring of the straightforward distinction between . . . proportionality and . . . reasonableness’ and ‘a significant change in attitudes . . . among some members of the judiciary’ (2016: 80). Catherine Donnelly underlines this observation elsewhere in this volume when she notes that ‘it is generally accepted that while English law has not yet adopted proportionality review beyond the context of human rights, “in substance it has stumbled towards a concept which is in significant respects similar, namely, variable intensity rationality review.”’ (Donnelly in this volume, p. 383). This doctrinal convergence strongly suggests that UK reasonableness review resembles that of the US under the arbitrary and capricious standard. As two commentators have noted, ‘judicial control of agency discretion in the [US] does not appear to be . . . any more intense than the control of the reasonableness of administrative action in England’ (Ranchordás and de Waard 2016: 193). Empirical studies bolster this suggestion. They indicate that in application, not just in its doctrinal formulation, UK reasonableness review is as strict as—if not even stricter than—US arbitrary and capricious review. One empirical study of UK reasonableness review outside the area of human rights, a special category that calls for strict review, found that 18 of the 41 non-human rights cases decided in UK courts between January 2000 and July 2003 invalidated the administrative action under review (Le Sueur 2005: 43). This represents a success rate of 44 percent and caused the author to ask ‘given what is often described as the high “threshold” of the unreasonableness test, is it not surprising that claimants seem to succeed in a relatively large proportion of cases?’ (Le Sueur 2005: 43). Interestingly, the only similar American study, finds that the success rate of arbitrary and capricious challenges brought against actions by the Environmental Protection Agency (EPA) and the National Labor Relations Board (NLRB) from 1996 to 2006 was only 36 percent (Miles and Sunstein 2008: 767, 802). In other words, on the ground, UK

 See R. v. Secretary of State for the Home Dept., ex parte Brind [1991] 1 AC 696 HL.   Associated Provincial Picture Houses v. Wednesbury Corporation (1948) KB 223, 234 (CA). 8   R. (Association of British Civilian Internees (Far East Region)) v. Secretary of State for Defence [2003] EWCA Civ 473 [2003] QB 1397, 1413C–F. 6 7

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80  Comparative administrative law reasonableness review appears to result in invalidation of more, not less, agency action than corresponding US arbitrary and capricious review. These two studies are not exactly comparable, of course. And, as the authors of both studies admit, the cases studied may be less than perfectly representative because (in the UK study) ‘law review report editors [may be] more likely to select cases in which [reasonableness review] is successful’ (Le Sueur 2005: 43) and (in the US study) the EPA and NLRB may be different from other agencies (Miles and Sunstein 2008: 774). Still, the UK study shows at the least that judicial review of administrative action in the UK is much more than a rubber stamp. That insight, by itself, is inconsistent with PPT’s prediction. That UK reasonableness review might actually result, as the US study suggests, in the invalidation of a higher proportion of agency action than does US arbitrary and capricious review turns PPT on its head.9 2.3  Reasonableness Review in Germany and France Consider now judicial review of administrative action in two regimes on the European continent, Germany and France. The contrasts between those two regimes and the US are more complex than the comparison with the UK. Both the constitutional design and the inherited legal traditions underlying these comparisons are complicated. Start with constitutional design. Neither country has either a US-style system of strong separated powers or a Westminster-style system of strong party parliamentary government. The French system exhibits some US-style separation because it has an independently elected President, but in a weaker form because the President must appoint a Premier supported by a majority in the National Assembly, although the President is free to call for elections in the National Assembly (Ackerman 2000: 648–50). Germany is closer to a classic parliamentary system, but it is much less likely to produce one-party rule than the Westminster system (Sartori 2006: 105). This is so because its modified proportional representation electoral system produces a number of viable parties that often operate in a coalition in the Bundestag. Although the Chancellor exercises broad governmental powers, she is selected by the Bundestag coalition. Furthermore, bicameralism is more of a check in Germany than in the UK because of the independent authority of the upper house (Sartori 2006: §12.1). The inherited traditions of the legal systems also diverge. Both Germany and France are civil law, not common law, systems and, in contrast to both the US and the UK, both

9   One might object that both empirical studies show nothing more than the rough parity between invalidation and validation one would expect under the Priest-Klein model of litigation in which the parties’ economic expectations lead them to litigate only the closest of cases (Priest and Klein 1984). Under this view, one would expect a 50 percent success rate however strict the standard is (Priest and Klein 1984, 19). First, however, the 44 percent and 36 percent are not roughly the same and both diverge, the second strongly, from the model’s 50 percent prediction. More import­ antly, the assumptions of the Priest-Klein model do not apply to judicial review of agency action under either standard. There is no reason to believe, for example, that the stakes in administrative review for each side are symmetrical (Priest and Klein 1984, 24–9) or that ‘the litigation costs are high relative to settlement costs and [that] the [value of] the judgment is low relative to these costs’ (Priest and Klein 1984, 20).

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Comparative positive political theory and empirics  81 countries have long had a separate system of specialized courts that deal exclusively with administrative law cases.10 These complications aside, recall that the McNollgast thesis explains judicial review in the US as the product of the US system of separated powers. If that claim is correct, it would imply that the closer a constitutional design is to a presidential system, the more pervasive judicial review of administrative action will be. Thus, one would expect there to be the least pervasive judicial review in the UK and the next least in Germany, which has a less centralized parliamentary system. On the other hand, one would respect much more judicial review in France and still more in the US. As we have already seen, however, the two systems predicted to be the furthest apart in term of reasonableness review, the US and the UK, have greatly converged. Adding France and Germany to the mix complicates the picture, but not in a way that lends support to the PPT thesis. The grounds for review in the French system are complicated, but they bear some resemblance to reasonableness review in the US system. Judicial review of administrative action can often be searching. A decision can be set aside because an incorrect person or body made the decision; officials failed to follow the required procedure; the decision violated the law; or the underlying motivation was incorrect (a category which includes errors of fact, law, or the weighing of facts). Akin to US reasonableness review, French administrative law requires administrative decisions to be supported by reasons, and failure to provide them can result in the invalidation of the action (Brown and Bell 1998: 239–50). As for review of discretionary decisions, treatise writers note that the courts frequently hear such cases, and, when they do, the courts go beyond a straightforward assessment of whether the agency observed the relevant legal limits (Brown and Bell 1998: 256–61). Proportionality is also a key feature of French administrative law (Brown and Bell 1998: 233–5). If proportionality applies, a court must weigh the intrusion by the government against the objective the government seeks to achieve, which involves a fairly intrusive examination of government decisionmaking. Thus, it appears that judicial review of administrative action in France is often available, and that the grounds for setting aside action are broad and include judicial evaluation of discretionary choices by government bodies. There are stark institutional differences between the French and US system, of course, most prominently in the existence and long tradition of entirely separate administrative courts. Nonetheless, at least at first blush, there appears to be much similarity in the availability and scope of review of administrative action. At the least, it does not appear, as PPT would suggest, that reasonableness review in France is weaker than in the US. Finally, consider a (very brief discussion of) judicial review of administrative action in Germany. Review is statutorily authorized, encompasses a wide variety of grounds, is quite searching, and can result in the invalidation of significant administrative action (Schroder 2002: § 5). But this sort of review applies only to a particular type of case, namely, those involving so-called ‘individual public rights’ (Rose-Ackerman 1995: 72–3). There is, for

10   The UK has long had specialist tribunals, staffed by lawyers and non-lawyers, that developed on an ad hoc basis. Pursuant to the Tribunals, Courts and Enforcement Act of 2007, the UK has re-organized and re-rationalized this tribunal system and, in the process, has effectively created administrative courts (Camworth 2009).

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82  Comparative administrative law example, little procedural review of rulemaking. The stringency of judicial review thus depends on how broadly ‘individual public rights’ reach. Traditionally, courts viewed them narrowly and judicial review of administrative action was thought to be unavailable in a broad range of cases (Rose-Ackerman 1995: 72–3; von Oertzen 1983: 269). In recent decades, however, courts have interpreted ‘individual public rights’ quite broadly. Rainer Wahl, a leading commentator on the German Code of Administrative Court procedure, explains the ‘individual public right’ as ‘entail[ing] three prerequisites . . .: A cogent legal provision, conferring legal power, and protecting individual interests’ (Mangold 2014: 232; Wahl 2006). ‘[M]any “individual public rights,”’ moreover, ‘have been discovered in norms, which previously were not considered to entail individual rights that grant access to justice. Thus, at first blush, the seemingly narrow conception of “individual public rights” has been broadened considerably over time, not lastly by providing third parties with legal protection’ (Mangold 2014: 232). In short, ‘the addressee of an administrative decision [that] puts a burden on the [addressee] will always have standing to challenge that decision’ (Marsch and Tünsmeyer 2016: 17). Germany, thus, presents a difficult case for the McNollgast thesis. Judicial review is available, is often intrusive, and operates in a wide range of cases—if not quite as broad as in some other systems. At the least, Germany, like the UK, does not now support the PPT thesis (if it may have at some point in the past) and one could well argue that it actively undermines it.

3. LESSONS Positive Political Theory sought to explain judicial review of administrative action as a product of a constitutional design that separates lawmaking authority between rival political principals. Our review of several European systems casts doubt on this claim.11 The clearest case is the UK where the constitutional design unifies lawmaking authority and yet judicial review of administrative action is alive and well. This suggests that perhaps something other than constitutional design best explains the existence and shape of judicial review of administrative action. An obvious rival to the PPT explanation is the traditional explanation that administrative law scholars give for the existence and shape of judicial review of administrative action: judicial culture. Interestingly, PPT itself seems to recognize the limits of its method. In a comment, the McNollgast collective and Daniel Rodriguez have argued that the traditional judicial culture explanation of American administrative law has much force—so much, in fact, that they try to incorporate it within PPT itself (2008: 15). In attempting to explain ‘the apparent puzzle . . . [w]hy would courts use administrative law doctrine to maintain constitutional balance and ensure administrative legitimacy when courts are [, in PPT’s view,] 11   Two other contributions to this volume also cast doubt on the more general PPT claim that Presidential and Parliamentary systems should drive judicial review of other aspects of agency action in similar directions. Paul Craig finds that court deference to agency determinations of questions of law depends largely on which judicial culture—common or civil law—the court inhabits (Craig in this volume) and Jud Mathews finds that the stringency of proportionality review of agency discretion depends largely on pragmatic, not structural, factors (Mathews in this volume).

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Comparative positive political theory and empirics  83 so concerned with implementing legislative strategies’ (2008: 18), they speculate ‘that courts might cherish hegemony—or at least priority—in matters of individual rights and fairness, rather than in administrative performance’ (2008: 19–20). In other words, they believe that judges have strong preferences about rights and fairness and bring those preferences to bear in deciding administrative law issues. Or, as they put it, American administrative law reflects not only a ‘desire of courts to assist legislators [in implementing their preferred policies but also] an interest in judicial concerns with their own institutional prerogatives and preferences’ (2008: 20). They claim, in fact, that viewed through a PPT lens judicial culture can powerfully explain the development in America of exactly what we have considered in this paper: review for reasonableness (here under the arbitrary and capricious standard). They are convinced that the one explains the other: [C]ourts determined to require heightened rationality and procedural protection from agencies in the wake of the due process revolution’s demise (consider Matthews v. Eldridge and its progeny) sought to transform the rather incrementalist approaches of Overton Park, Inc. v. Volpe and Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automotive Insurance, Co. into the sort of synoptic rationality requirements that one would have thought untenable or at least thinly supported by existing legal doctrine. In short, judges are both shrewd and resourceful in developing strategies to ensure that constitutional values—or, more precisely, fairness values—are protected. (2008: 20–21)

We do not disagree with this description but are surprised that it represents a PPT account of the development of arbitrary and capricious review. After all, it deviates not a bit from the most traditional explanation: that judges developed American administrative law to ensure a certain level of regularity and fairness in administrative decisionmaking. It twists the traditional story only insofar as it identifies the judges as self-interested actors. But does that make any difference? We think not. What matters to both accounts is that judges develop law in the way that they think is right. Under the traditional view, institutional acculturation largely determined what they thought ‘right’; under PPT, ‘institutional prerogatives and ­preferences’ do. The latter sounds snarkier perhaps, but has no different payoff. In both cases, the judges are expressing norms or, if you will, ‘preferences’ of the professional culture they inhabit. What, then, should we make of PPT’s appropriation of traditional legal explanations for the development of American administrative law? On the one hand, PPT’s appropri­ ation of these traditional stories recognizes their explanatory force. Without them, PPT cannot explain some central features of the American terrain, like arbitrary and capricious review and some judicially-created procedural requirements. On the other hand, however, PPT’s perhaps necessary appropriation of traditional reasoning represents a loss. To the extent PPT now convinces by incorporating the types of analysis it earlier sought to supplant, it loses much of its edge and becomes indeterminate. Now it offers less a novel, stark alternative to traditional legal explanations than a messy supplement to them. A similar eclecticism might rescue PPT in the comparative context. PPT might invoke the norms of traditional legal culture to explain the similarity we see in judicial review across very different presidential and parliamentary systems. But by doing so, it would have lost its soul and any real claim to interest. Traditional legal culture, not private incentives, seems to be doing most of the work.

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84  Comparative administrative law

REFERENCES Ackerman, Bruce (2000), ‘The New Separation of Powers,’ Harvard Law Review 113, 633–729. Brown, L. Neville and John S. Bell (1998), French Administrative Law, 5th ed., Oxford: Oxford University Press. Camworth, Robert (2009), ‘Tribunal Justice—A New Start,’ Public Law January, 48–69. Craig, P. (2004), ‘Grounds for Judicial Review: Substantive Control Over Discretion,’ in David Feldman (ed.), English Public Law, Oxford: Oxford University Press, pp. 831–69. Davies, A.C.L. and J.R. Williams (2016), ‘Proportionality in English Law,’ in Sofia Ranchordás and Boudewijn de Waard, The Judge and the Proportionate Use of Discretion: A Comparative Study, Abingdon, U.K.: Routledge. Ferejohn, J.A. and Charles R. Shipan (1989), Lawrence C. Dodd and Bruce I. Oppenheimer (eds), ‘Congressional Influence on Administrative Agencies: A Case Study of Telecommunications Policy,’ Congress Reconsidered, 4th ed., Washington, D.C.: Congressional Quarterly Press, pp. 393–410. Ip, Eric C. (2015), ‘Doctrinal Antithesis in Anglo-American Administrative Law,’ Supreme Court Economic Review 22, 147–80. Jones, B. and K. Thompson (2002), ‘Administrative Law in the U.K.,’ in René Seerden and Frits Stroink (eds), Administrative Law of the European Union, its Member States and the U.S.: A Comparative Analysis, Antwerp: Intersentia, 199–258. Law, D.S. (2005), ‘Generic Constitutional Law,’ Minnesota Law Review 89, 652–742. Le Sueur, Andrew. (2005), ‘The Rise and Ruin of Unreasonableness?’ Judicial Review 10, 32–51. Mangold, A.K. (2014), ‘The Persistence of National Peculiarities: Translating Representative Environmental Action from Transnational into German Law,’ Indiana Journal of Global Legal Studies 21, 223–61. Marsch, Nikolaus and Vanessa Tünsmeyer (2016), ‘The Principle of Proportionality in German Administrative Law,’ in Sofia Ranchordás and Boudewijn de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, London: Routledge. McCubbins, M.D., R.G. Noll, and B. Weingast (1999), ‘The Political Origins of the Administrative Procedure Act,’ Journal of Law, Economics and Organization 15, 180–217. McCubbins, M.D., R.G. Noll, B. Weingast, and Daniel B. Rodriguez (2008), ‘Administrative Law Agonistes,’ Columbia Law Review Sidebar 108, 15–22. Miles, Thomas, J. and Cass R. Sunstein (2008), ‘The Real World of Arbitrariness Review,’ University of Chicago Law Review 75, 761–814. Priest, G.L. and B. Klein (1984), ‘The Selection of Disputes for Litigation,’ Journal of Legal Studies 9, 1–55. Ranchordás, S. and B. de Waard (2016), ‘Concluding remarks,’ in Sofia Ranchordás and Boudewijn de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, Abingdon, U.K.: Routledge. Rose-Ackerman, Susan (1995) Controlling Environmental Policy: The Limits of Public Law in Germany and the United States, New Haven: Yale University Press. Rose-Ackerman, Susan, Stefany Egidy, and James Fowkes (2015), Due Process of Lawmaking: The United States, South Africa, Germany, and the European Union, New York: Cambridge University Press. Sartori, Giovanni (2006), Comparative Constitutional Engineering: An Inquiry into Structures, Incentives and Outcomes, 2nd ed., New York: New York University Press. Schroder, Meinhard (2002), ‘Administrative Law in Germany,’ in René Seerden and Frits Stroink, Administrative Law of the EU, Its Member States, and the U.S.: A Comparative Perspective, Antwerp: Intersentia, 91–143. Stewart, R.B. (1975), ‘The Reformation of American Administrative Law,’ Harvard Law Review 88, 1667–813. Stone Sweet, A. and J. Mathews (2008), ‘Proportionality Balancing and Global Constitutionalism,’ Columbia Journal of Transnational Law 47, 72–164. Sunkin, M. (2004), ‘Grounds for Judicial Review: Illegality in the Strict Sense,’ in David Feldman (ed.), English Public Law, Oxford: Oxford University Press, pp. 715–73. Tompkins, Adam (2003), Public Law. Oxford: Oxford University Press. Von Oertzen, H.J. (1983), ‘The Control of Public Administration by the Courts,’ in Klaus Konig, Hans Joachim von Oertzen and Frido Wagener (eds), Public Administration in the Federal Republic of Germany, The Netherlands: Kluwer-Deventer, pp. 263–81. Wade, Sir William and Christopher Forsyth (2004), Administrative Law, 9th ed., Oxford: Oxford University Press. Wahl, Rainer (2006), Herausforderungen und Antworten: Das Öffentliche Recht der letzten fünf Jahrzehnte, Berlin: De Gruyter Recht.

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6.  The ‘Neue Verwaltungsrechtswissenschaft’ against the backdrop of traditional administrative law scholarship in Germany Andreas Voßkuhle and Thomas Wischmeyer

Administrative law is in a perpetual process of change. Legal scholars analyze the conditions, development and outcome of regulatory reform, criticize inconsistencies and aberrations, or propose new solutions. In doing so, scholars develop different attitudes towards the object and purpose of their studies: some identify with a role as mere observers or become advocates for a special interest attempting to influence the political process by the power of persuasion. Others try to reconstruct and shape the grammar, categories and concepts that legislators, judges and administrators use when designing or applying legal rules. The latter presuppose that practitioners pay attention to theory and that scholars consider the process and products of rule-making and adjudication to be their proper object of inquiry. On this view, legal scholars and practitioners must speak a common language, which connects a conceptual and systematic approach towards the law with a respect for positive rules and decisions on a mid-level of abstraction (Bumke 2004a, 85; Eifert 2014, 205). Such a doctrinal or dogmatic discourse (Rechtsdogmatik 1) has been at the core of German administrative law ever since its study became an independent academic discipline in the last decades of the nineteenth century.2 And despite strong criticism, participation in the doctrinal project continues to be an integral part of German administrative law scholarship as well as, albeit sometimes to a lesser degree, of scholarship in other countries (von Bogdandy 2009; Chrétien 2011, 109–11; Cassese 2012). With the scholarly power of conceptualization and categorization comes responsibility. First and foremost, scholars need to respect the integrity of the democratic and the judicial process and must not try to pass off personal preferences or convictions as a decision of a court or parliament. Even more important in our context is the challenge for scholars to provide the legal system with concepts and categories, which are responsive to a changing political and societal context. If legal scholarship fails to engage with major ­developments – e.g. the rise of the welfare state – and continues to use outdated categor­ ies, this conceptual ossification can have negative effects for a legal system based on a productive dialogue between theory and practice. A lack of critical scholarly engagement with new regulatory arrangements makes it more difficult for legislators to pursue their project of reform in a consistent manner, and eventually it forces courts and administrators to apply rules that do not fit with the conventional grammar of law taught in law

1   On this essentially contested concept see Brohm 1972; Alexy 1978, 307–34; Schmidt-Aßmann 2006, 4–5; Bumke 2014. 2   On the development of administrative law scholarship in Germany, see the magisterial studies of Michael Stolleis 1992; 1999; 2012.

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86  Comparative administrative law schools. However, if legal scholars change their fundamental concepts and categories, this may in turn raise deep methodological questions about the criteria of adequacy for these adjustments, the admissibility of previously extra-legal arguments in the legal discourse and ultimately about the scientific status of the ‘new’ approach. The closer scholars and practitioners work together, the more politically and normatively charged questions of method become. Against this backdrop, it is no surprise that all major transformations of administrative law in Germany were accompanied by intense discussions about method ever since administrative law became an independent academic discipline in the age of Otto Mayer (Stolleis 1992, 381; Möllers 1999; Voßkuhle 1999a).3 The latest debate, which is usually framed as a dispute between the traditional ‘juristic method’ (Juristische Methode) and the new paradigm of regulation or ‘steering’ (Steuerung), originated in the early 1990s and lasted well into the 2000s. The following overview of this debate starts with a brief sketch of the major trends in administrative law scholarship in the early decades of the post-war Federal Republic of Germany (section 1), before analyzing the driving forces of methodological change (section 2), which resulted in the emergence of the Neue Verwaltungsrechtswissenschaft (‘New Administrative Law’) (section 3). The chapter ­concludes with some remarks on the current state of the methodological debate (section 4).

1. PARADIGMS OF POST-WAR ADMINISTRATIVE LAW SCHOLARSHIP 1.1  Court-centred Administrative Law and the Protection of Individual Rights It would be an oversimplification to claim that post-war German administrative law scholarship focused exclusively on rights-protection through courts.4 But undoubtedly scholarship has been profoundly affected by the comprehensive catalogue of fundamental rights in the German Basic Law (Grundgesetz) and especially Article 19 (4) Basic Law, which provides that any person whose rights may be violated by any public authority has recourse to the courts. Scholars quickly started to re-interpret traditional administrative law in light of the new constitutional guarantees – which proved to be astonishingly ­successful.5 In a similar vein, scholars emphasized the requirement of statutory authorization for administrative actions and proposed to reduce administrative discretion through   Ruffert 2004, 193–4 observes a similar development in other EU Member States.   For a nuanced overview of the development of administrative law scholarship between 1950 and 2000 see Stolleis 1994; Bumke 2004a; Wahl 2006; Stolleis 2012. 5   This success was possible because the court-centered perspective could be ‘organically linked’ to Otto Mayer’s project through the ‘administrative act’ (Verwaltungsakt) (Eifert 2014, 205). In Mayer’s system the administrative act had been the centre-piece of administrative law’s ‘forms of action’ (Schmidt-De Caluwe 1999). Under the Basic Law, administrative courts and scholars modeled the system of judicial control according to Mayer’s forms of action with the administrative act at its center (cf. Federal Administrative Procedure Act § 42). This link allowed for methodological continuities in administrative law scholarship, even though the constitutional framework had completely changed. 3 4

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The ‘ Neue Verwaltungsrechtswissenschaft’  87 an extensive reading of the rule of law requirement in Article 20 (3) Basic Law (Jesch 1961; Rupp 1991; Ossenbühl 1968). Their main partners in this constitutionalization project were the courts. Binding the actions of the administration to the constitution and to the democratically legitimate statute was considered to be the common vocation of judges and scholars under the Basic Law. Judicial control became the quintessence of accountability.6 The rights-based approach was and still is important. It led to a much needed re-configuration of an administrative law, whose central concepts had been formed in Imperial Germany and which had lived through authoritarian rule and dictatorship (Schuppert and Bumke 2000; Wahl 2006, 36–7). 1.2  The Autonomy of Administrative Law and the ‘Juristic Method’ The perspective administrative law scholars took at this time was more or less identical with that of courts, focusing on citizens who sought legal protection against the administration. Only the final administrative decision, the ‘legal act’ (Rechtsakt), was considered to be relevant; this act was measured against the constitutional and statutory standards. Administrative law was thus treated as a benchmark for assessing what the administration had done wrong (Hoffmann-Riem 1993, 125; Stolleis 1994, 227; Ruffert 2007, 10). In this setting, administrative law scholarship became largely a hermeneutic science of system­ atization and interpretation.7 The – abstract and concrete, written and unwritten – legal acts were collected, the legal consequences attached to them were analyzed and they were categorized accordingly. This was done in order to support courts in keeping control of an ever more complex legal system and thus to strengthen the rule of law.8 Also, in the interpretation of legal acts, consistency and legal certainty were emphasized in order to protect rights.9 Because the German legal system was prolific in producing legal acts, there was hardly any need for legal scholars to engage in an interdisciplinary discourse on public administration.10 Over time, it was taken for granted that this approach was the way to deal with administrative law, and the exclusive focus on legal acts became the hallmark of proper legal scholarship and a matter of disciplinary identity. However, what got lost in administrative law scholarship was the administration itself. Administrative procedure, new or unconventional regulatory approaches and arrangements, and all those factors that could influence the decision-making process and its outcome, but which were for various reasons  6   The reality now is different. See, for example, Schmidt-Aßmann and Möllers 2006. For a similar discussion in the US see Mashaw 2007.  7   The most influential monograph advocating for jurisprudence as a hermeneutic science in German is probably Larenz and Canaris 1995, 25–35.  8   On systematic thinking in Administrative Law see Schmidt-Aßmann 2006, 1–18; Hilbert 2015. On systematic thinking in German law in general see Bumke 2004b, 23–36.  9   The systematic objective of legal doctrine is sometimes misunderstood or misconstrued as serving conservative purposes; however, within the constitutional framework of a democratic society, it represents first and foremost the commitment to the ‘preservation of both legal certainty and the postulate of equality in the operation of the legal system’ (von Bogdandy 2009, 391). 10   A first attempt to integrate social sciences into legal scholarship was largely unsuccessful in influencing the scholarly mainstream. See Grimm 1973, Hoffmann-Riem 1981.

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88  Comparative administrative law excluded from judicial control (such as organization, personnel, fiscal resources), played only a marginal role.11 Additionally, the goals or objectives pursued by the administration, which are of utmost importance for legislators and administrators when designing a regulatory regime, gradually vanished from legal discourse.12 What administrators did, why they did it, and whether or not their actions proved to be effective, was of hardly any concern for legal scholars. They paid attention primarily to the question whether the legal act had observed all legal requirements (Bumke, 2004b, 17–21 and 255–62). This method was sustainable as long as the legislator did not fundamentally change its regulatory philosophy and the administration more or less followed established patterns, which happened to be mostly types of command-and-control regulation or, adapting the German term, ‘regulative law’ (regulatives Recht). If the traditional grammar – in its new constitutional clothes – stopped to reflect administrative reality, a methodological crisis would occur.

2.  DRIVING FORCES OF METHODICAL RE-ORIENTATION From a comparative perspective, the major political trends transforming administrative law in Germany since the 1980s were European or international in nature (see, for example, Ruffert 2007; Schneider 2007; Auby 2010). Because they have been described exhaustively elsewhere, this section gives only a very broad outline and concentrates on the consequences these transformations had for the German administrative law scholarship. 2.1  The Crisis of Regulative Law While the shift away from the liberal constitutional state towards the interventionist welfare state had occurred long before the 1980s (Stolleis 1989; Grimm 1990, 291), the importance of this development had largely escaped the attention of mainstream scholarship.13 The quantitative expansion and qualitative change of state functions became an issue for legal academia only when this development became associated with what soon would be called the crisis of the ‘hierarchical’ or ‘regulative’ law (Günther 1990, 51; Pitschas 1990, 48–53).14 The empirical basis for this diagnosis was rather small and consisted of a handful of implementation studies from the 1970s (Winter 1975; Mayntz et al. 1978; Bohne 1981; Dose 1997, 62–9, 216–19). Nevertheless, the influence of the subsequent 11   Schmidt-Aßmann 2006, 222–3. On the important distinction between creation (Herstellung) and description (Darstellung) of administrative decisions see Luhmann 1966, 51; Trute 2004, 293. 12   While the early systems of administrative law (Otto Mayer, Walter Jellinek, Hans Peters) openly struggled to connect their formalist ambitions with a substantive concept of administrative law (Bumke 2004a, 85), over time a merely heuristic function was attributed to the tasks and goals of the administration. See, for example, Bachof 1972, 223–30; Forsthoff 1973, 368; Badura 1966, 20, and more recently Wahl 1993, 177. An exception was the discussion on planning. See, for example, Kaiser 1965–1972; Wahl 1978; Wahl 2006, 55. 13   Exceptions include again Forsthoff 1973; Badura 1966. 14   Critical of exaggerated crisis-scenarios: Di Fabio 1998, 9; Lepsius 1999, 19, argues convin­ cingly that the alleged crisis of law as a means of regulation was first and foremost a crisis of societal expectations.

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The ‘ Neue Verwaltungsrechtswissenschaft’  89 debate on the self-understanding of legal scholars was profound. It by far transcended the hardly surprising finding that many interventionist statutes were not effectively implemented by an administration that was increasingly unwilling and unable to live up to the expectations politicians had with regard to its capacities and efficiency and that sought refuge from regulatory stress by tolerating unlawful situations or by cooperating with the addressees of the law in order to find acceptable extra-legal solutions (Ritter 1979).15 Rather, the debate triggered a change in perspective: if the bureaucracy did not execute statutes, avoided formal legal acts and took recourse to new, informal arrangements, the formalist project was maybe heading in the wrong direction. How should scholars react? From the traditional perspective, the answer was quite clear: what happened was either irrelevant from a lawyerly point of view, or it was illegal. The problem was complicated by the fact that at least some of the new forms of governance were clearly superior to the traditional procedures and modes of action. If administrative law scholarship did not want to lose its relevance for administrative practice and endanger the common doctrinal project, it had to take into account that concepts like hierarchy, primacy, and formality were obviously unable to grasp the full reality of a functioning administration in a postliberal state. Moreover, it had to come up with alternative propositions that addressed the implementation problem and which could provide orientation for public administration and the legislator alike. To this end, scholars slowly started to revive their old connections to sociology and political science (Hoffmann-Riem and Schmidt-Aßmann 1990; Dose and Voigt 1995). For  quite some time, though, the systematic and pathology-oriented approach of the ‘juristic method’ continued to prevail: various types of informal action were distinguished (Bauer 1987, 246–50; Dreier 1993) and legal boundaries for cooperation, informal arrangements or administrative contracts were defined (Krebs 1993; Brohm 1994) – with hardly any impact on administrative practice. Over time, this proved to be unsatisfactory and the call for a thorough reform of administrative law as well as for administrative law scholarship became louder and more persistent (Rossen 1999). But if legal scholars wanted to paint a more adequate picture of administrative practices, they had to give up their historically contingent focus on the study of the ‘legal act’ and their obsession with the question of legality/illegality. Instead, scholars would need to re-invent the study of administrative law as a practical science of regulation. 2.2  The New Paradigm of ‘Gewährleistung’ Methodological re-orientation towards the regulation paradigm became the common concern of a group of administrative law scholars from the early 1990s.16 This group organized itself through a series of conferences whose proceedings were published in ten volumes with a programmatic title ‘On the reform of administrative law’ (Schriften zur Reform des Verwaltungsrecht).17 These volumes are still an essential reading for 15   This realization was by no means new, see, for example, Luhmann 1999, 304–14; see also Voßkuhle 2012, 29–32. On the productive dimension of non-implementation, see Voßkuhle 1996, 522. 16   For a comparative perspective see Majone 1997. 17   Hoffmann-Riem et al. 1993; Hoffmann-Riem and Schmidt-Aßmann 1994; id. 1996; id. 1998; id. 2000; id. 2003; Schmidt-Aßmann and Hoffmann-Riem 1997; id. 1999; id. 2001; id. 2004. See,

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90  Comparative administrative law ­ nderstanding the German reform debate. The reform group quickly recognized that u what had been a pathology became a major political trend. In light of seemingly unsustainable public debts and a growing global competition between legal orders, the pressure for administrative reform in Germany increased significantly. Under the interventionist paradigm, cooperation had largely taken place in the shadow of the law. Now, administrative politics strived to unburden the state from unreasonable expectations and actively promoted bureaucracy and private actors working together. Likewise, the state and its bureaucracy redefined their mission. The state should concentrate on activating and encouraging private individuals to pursue the common good; society should be enabled to fulfil public services that previously were managed by the state without the latter ­completely abdicating its responsibility for the process. This idea was subsumed under the concept of Gewährleistung, or guarantee (Eifert 1998; Voßkuhle 2003; Schuppert 2004; Franzius 2009). To implement the Gewährleistungsstaat, politicians pushed privatization, promoted New Public Management tools (or Neues Steuerungsmodell, see Schneider 1997, 111–22), and introduced numerous public-private partnerships for standard setting and oversight – all of which demanded sophisticated and previously untried legal frameworks. In this situation, experts on administrative law were in high demand. It has never been unusual for legal scholars in Germany to be involved in administrative politics (Engel 2005), but at this time the number of academics who participated actively in reform commissions or provided special reports raised to new heights (Voßkuhle 2012, 14–15). Once more, these activities had an impact on how legal scholars understood their role. As experts they could hardly base their arguments exclusively on past decisions, but had to take account of future developments as well. In other words, they had to start thinking in categories of design rather than of control. 2.3  Europeanization and Internationalization of Administrative Law The development towards the Gewährleistungsstaat partly overlapped with the complex process of change and adaption initiated by the Europeanization and internationalization of German administrative law (Axer et al. 2010). Despite initial resistance on the part of many scholars during the 1990s, EU law has led to a massive transformation of German law.18 As an EU Member State, Germany had to integrate countless previously unknown concepts, instruments, procedures and organizations into its legal system, such as freedom of information, the government-mandated and market-based approach towards emission-trading or the certification and accreditation regime in product safety law – the latter being a textbook example of Gewährleistungsverwaltung (Voßkuhle 2002a, 310). Again, this transformation confronted scholars, who were overly committed to the ‘juristic method’ and its systematic ambition with nearly insoluble problems. Suddenly, the volume of regulation increased massively. Typically, several uncoordinated layers of regulation were overlapping. Hierarchies became further blurred and essentially problematic. Content-wise the new rules were a mixture of open goal-orientation and nearly

in particular, Schuppert 1993; Voßkuhle 1999a; Voßkuhle 2002b; Bumke 2004a; Schmidt-Aßmann 2006. 18   Wahl 1999 even pronounced a ‘second phase of public law’ in Germany.

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The ‘ Neue Verwaltungsrechtswissenschaft’  91 unmanageable detail. A legal science whose only methods were interpretation and systematization was hardly able to process this change. 2.4  Proceduralization, the Knowledge Problem and the Information Society A similar effect had the growing awareness for the importance which knowledge has for legislators and administrators. The knowledge problem had already existed in the welfare state with its massive expansion of state functions. In the emerging ‘risk society’ it became even more acute due to the enormous complexity of regulation in a dynamic global environment (Beck 1992; Di Fabio 1994). In areas such as environmental law or IT law regulators quickly reach the limits of accessible knowledge (Schuppert and Voßkuhle 2008; Spiecker and Collin 2008; Röhl 2010). The traditional hierarchical structures of the administration had proven to be unable to ensure a sufficient flow of information. When the bureaucracy had taken recourse to informal negotiations, this had also been a reaction to insufficient regulatory knowledge (Ritter 1992). To address the knowledge problem, the importance of organizational regimes and procedural rules was emphasized, administrative discretion was gradually seen in a more favourable light, and accountability was redefined in procedural terms (Scherzberg 2000b; Eifert 2014, 209–13). Additionally, the new regulatory arrangements of the Gewährleistungsstaat had to be designed as flexible, situational and, in the broadest sense, ‘intelligent’ rules of action, capable also of activating private knowledge. Once more, this process made it necessary for administrative law scholars to re-engage in an interdisciplinary dialogue with economists, political scientists and communication and information theorists. Moreover, it initiated an informational turn in administrative law scholarship (Hoffmann-Riem and Schmidt-Aßmann 2000). The informational relations between public actors and citizens became the object of an entirely new field of study, the Informationsverwaltungsrecht (Pitschas 1993; Augsberg 2014), addressing issues such as the relationship between fundamental rights and IT – in particular with regard to data protection and information security (Albers 2012; Wischmeyer 2017) – and the genesis of a (global) information order (Vesting 2001; Schmidt-Aßmann 2011).

3.  THE ‘NEUE VERWALTUNGSRECHTSWISSENSCHAFT ’ 3.1  Legal Scholarship at a Methodological Crossroads The challenges had left the discipline with essentially two alternatives: should it continue to confine itself to the systematization and interpretation of legal acts; or should the discipline reinvent itself as a practical science of regulation, even if this meant venturing into unknown territory?19 For quite some time, it became a popular misconception that the second choice somehow contradicted or excluded the first. But the regulatory approach never challenged the fact that all regulation must be checked for its compliance with the

19   For similar discussions in other countries, see Ruffert 2007; Chrétien 2011; Cassese 2012; Sommermann 2015.

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92  Comparative administrative law constitutional and statutory framework. This has always been the proper work of jurists. From the perspective of proponents of the so-called Neue Verwaltungsrechtswissenschaft,20 however, it is only one – obviously important – step in a complex process of thinking about regulation (Voßkuhle 2002b, 188–9). Moreover, a proper legal analysis is almost impossible to conduct when neglecting or ignoring the other steps. In this sense, the Neue Verwaltungsrechtswissenschaft is not against interpretation or against doctrine. Rather, it opposes an academic reductionism that sees administrative law solely as a negative standard to measure administrative failure while ignoring the constituent and enabling role that law has for the administration. Not only are administrative agencies created by statutes; the instruments they use in order to carry out their tasks such as regulation, adjudication or contracts are also created by the law and subject to its change. The same is true for administrative procedures, which are the result of a specific legal design. The need to engage with questions of design and regulatory choice gives a richer account of the law and puts scholars in a creative relationship vis-à-vis the law. This enables them, for example, to analyze administrative contracts as legal instruments in their own right rather than simply interpreting the statutory norms in the German Administrative Procedure Act that define their legal boundaries. Additionally, the Neue Verwaltungsrechtswissenschaft is convinced that the discussion of interdisciplinary or policy questions is per se no less valuable than doctrinal studies and that it can be conducted in a methodologically rigorous manner (Voßkuhle, 2002b; Engel, 2005). In fact, the dichotomy between purely ‘legal’ questions and ‘policy’ is itself essentially problematic, because it neglects the fact that the application of legal rules almost always entails both elements of interpretation and of law-making (Wischmeyer 2015, 23–6). Apart from methodological questions, the challenges confronted scholars in Germany and elsewhere (Eskridge 1991; Schmidt-Aßmann 1995, 9–10; Ruffert 2003; Cassese 2012) with a comprehensive research agenda. Much effort was put into the analysis of the effects that these trends had on administrative law.21 The three-volume Grundlagen des Verwaltungsrechts (Foundations of Administrative law), whose second edition has appeared in 2012 and 2013, summarizes the current state of research (Hoffmann-Riem et al. 2012a; 2012b; 2013). The handbook gives a full account of German administrative law and complements analyses of legal acts, principles and institutions by insights from regulation theory, regulatory choice and implementation studies.22 A detailed description of the key findings of the Neue Verwaltungsrechtswissenschaft on issues as diverse as Europeanization, proceduralization, informatization, networks, personnel, etc., lies far beyond the scope of this chapter. The following section will therefore concentrate on some of the methodological premises of the movement. Before we focus on the German debate, however, it should be noted that the German development can and should not be viewed as an isolated movement. In other jurisdic20   The term was used first by Hoffmann-Riem 2004, 13, and Bumke 2004a, 103. See also Voßkuhle 2001a, 502, postulating a ‘Neue Staatswissenschaft.’ On the much-debated issue of ‘newness’ see Wahl 2006, 52; Schuppert 2008, 91–100; Voßkuhle 2012, 4. 21   Representative monographs include: Fehling 2001; Wollenschläger 2009; Siegel 2009; Thym 2010. 22   On the complementary relation between the two perspectives already Brohm 1972, 252; cf. also Voßkuhle 2002b, 179–81; Schmidt-Aßmann 2006, 26.

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The ‘ Neue Verwaltungsrechtswissenschaft’  93 tions similar tendencies can be observed.23 While American administrative law scholarship has long observed that questions of law, fact, and policy are difficult to disentangle in the administrative context (see, for example, Jaffe 1965), the boundaries between them have become even more blurred and contested in an era of renewed regulatory efforts amid political polarization and legislative stalemate (see, for example, Gluck et al. 2015; Greve and Parrish 2015). It would be a worthwhile project – again far beyond the scope of this chapter – to compare the development of administrative law and its theory in postwar Germany and in the US. 3.2  Administrative Law as Regulation and Steering In Germany, the concept of ‘steering’ (Steuerung) became central for the reform debate. In the mid-1970s, steering began to replace in sociology the older concepts of ‘planning,’ ‘social engineering’ and ‘rational politics’ which had been popular in the optimistic 1960s and early 1970s. As it is always the case with complex theoretical concepts, rival accounts for ‘steering’ exist (Mayntz 1997; Dose 2003). The Neue Verwaltungsrechtswissenschaft understands steering in the sense of Renate Mayntz’s and Fritz Scharpf’s theory of actor-centered institutionalism or neo-institutionalism (Mayntz and Scharpf 1995), where steering means the deliberate and calculated influence political institutions exert on society (Mayntz 1997, 190). The concept presupposes an analytical distinction between a subject, who acts, an object, to whom or which the action is directed, an objective or goal, and the instruments used to reach the objective. Additionally, actors need knowledge of the object and of the likely consequences of their actions, if they want to steer successfully. Lastly, attempts to steer depend on various factors which are characteristic for the respective fields of intervention, including the interest of the steering objects in being steered. Steering analyses of political processes are by no means trivial, especially in pol­ itics where the steering subject is a plurality of collectives, steering must be understood as an interactive process in which different actors work together and against each other within a common framework (Mayntz 1997, 191). For these reasons, the influence which political institutions exert can obviously not be understood in terms of linear causality, but has to be analyzed within a complex field (Schmidt-Aßmann 2006, 21–2). This makes a complete or realistic reconstruction of a political process in terms of steering nearly impossible (Mayntz and Scharpf 1995, 39). Nevertheless, heuristic analyses based on steering theory paint a much more nuanced picture of regulation and its implementation than traditional political and legal theory. In particular, they prevent scholars from treating legal acts as creationes ex nihilo and call their attention to the conditions under which decisions are made as well as to new actors (for example, networks), regulatory arenas (for example, the market, personnel, organizational law) and instruments that traditional administrative law had struggled to integrate into its system. The latter include the deliberate use of information (in the form of warnings, product recommendations or awards), monetary incentives (for example, subsidies, dues and tradable permits), or strategies of informal dispute resolution and cooperation. This non-linear, complex concept of ‘steering’ is probably not very different from the way   See Eskridge 1991; Bourgon 2007; Cassese 2012.

23

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94  Comparative administrative law ‘governance’ is used by many legal scholars outside of Germany (de Búrca and Scott 2006; de Búrca et al. 2013).24 The Neue Verwaltungsrechtswissenschaft focused on steering rather than on ‘governance’, even though the latter has largely replaced the concept of steering in political science as well as in the global legal discourse (Schuppert 2008; Voßkuhle 2012, 59–62; Schuppert 2012:1078–86, 1123–31). This is not only because of the fuzziness of the term ‘governance,’ but also because governance theory tends to ­emphasize the growing fragmentation of political power, which makes it nearly i­mpossible for i­nstitutions to deliberately influence societal processes. In this sense, governance theory provides an adequate theoretical framework for phenomena such as ­transnational law.25 However, its implicit scepticism about the ability of the political system and of d ­ emocratically accountable actors to exert influence is not easy to process for scholars who study administrative law on a national and supranational level and who feel ­committed to their ­respective constitutional frameworks. These legal orders are built on the very idea that public institutions are competent and capable to regulate. They consider and treat a statute as a coherent expression of political will. The assumption of democratic agency and thus of legitimate authority, however, is almost impossible to reconstruct in terms of governance. Moreover, if we look at the important role public institutions and legal rules play within developed nation-states or the EU, it is empirically not particularly plausible that the function of statutes or directives should consist mainly in giving incentives for interactions in and between more or less autonomous horizontal networks. For these reasons, at least for German scholars, the steering approach seemed better equipped to mediate between the sociological concern for differentiation on the one hand and a constitutional grammar that operates with ideas such as action, responsibility, and competence on the other hand. Two related misunderstandings must be avoided as well: steering theory does not reduce public law to a mere instrument; nor does the fact that we are able to describe law in instrumentalist terms make our accounts of law ‘instrumentalist’. On the contrary, it is the rule of law that requires that constitutional rights and guarantees become effective (Schmidt-Aßmann 2006, 56–61). The analytical approach of steering theory thus by no means denies that law is the expression of a system of substantive and procedural values enshrined in the constitution. The goals promoted through law are normatively relevant not because they are the product of an efficient legislative and administrative machine, but because they embody specific values which can be justified in a constitutional setting or which are themselves the result of constitutional choices. 3.3  Administrative Law in Context Administrative law is no autonomous realm; it can neither be adequately explained nor applied if it is isolated from the context for which it was designed.26 Even those scholars who were committed to the ‘juristic method’ had to refer to history, values, or conse24   The same goes for the relationship between ‘steering’ and ‘regulation,’ which in the German debate is partly used as a substitute for ‘steering’ (Eifert 2012). 25   For the study of global administrative law, however, the theoretical framework of the Neue Verwaltungsrechtswissenschaft has proven to be very successful, see von Bogdandy and Goldmann 2009. 26   The context is not ‘given’, but is itself the result of a construction: Scherzberg 2000a, 28–36.

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The ‘ Neue Verwaltungsrechtswissenschaft’  95 quences when interpreting legal rules or constructing legal doctrines – first and foremost Otto Mayer himself (Hoffmann-Riem 1999, 97; Wischmeyer 2015, 110–13, 217–22). That empirical assumptions and normative aspirations converge in a positive legal act becomes obvious, if we look at areas such as technology law, environmental law and tele­ communications law (Hoffmann-Riem 2004, 36–8; Müller and Christensen 2013). But it is true in all other areas of the law as well, even seemingly formal ones such as administrative procedure law (Voßkuhle 2002a). For these reasons, there is no categorical difference to the traditional approach, if the Neue Verwaltungsrechtswissenschaft considers the regulatory context in its analyses. However, the Neue Verwaltungsrechtswissenschaft is much more interested in the impact and outcome of specific regulatory choices than traditional scholars (Voßkuhle 1994; Voßkuhle 2012, 29–32). This goes hand in hand with the increasing importance of technology assessments or cost-benefit-analyses in the legislative and administrative process (Roßnagel 1993; Böhret 1997; Hof and Lübbe-Wolff 1999; Hill and Hof 2000; Hof and Schulte 2001; Karpen and Hof 2003). Additionally, the Neue Verwaltungsrechtswissenschaft demands that scholars should address contexts in an open and methodologically sound manner instead of concealing their subjective preferences or relying on mere hunches (Schmidt-Aßmann 1997, 15; Bumke 2004a, 109–24).27 Regularly, this presupposes that legal scholars take interdisciplinary insights into account, for example from positive political theory, systems theory or new institutional economics (Willke 1995; Voßkuhle 2012, 44). In doing so, a number of barriers have to be overcome. Most importantly, scholars have to recognize that the transfer of knowledge, concepts, and theories between fields of science is a highly selective, asymmetrical, and essentially constructive enterprise and that a naïve or uninformed ‘import’ of theories can be as dangerous as the refusal to engage with interdisciplinary insights (Voßkuhle 2002b, 182–4; Hoffmann-Riem 1999, 85). However, due to administrative law’s inherent context-dependency it is impossible to avoid the problem entirely. Rather, scholars need to develop meta-methodological strategies for the use of interdisciplinary knowledge. The Neue Verwaltungsrechtswissenschaft has made several proposals on how to integrate different perspectives into a methodological framework without giving up the disciplinary identity of legal scholarship. This includes establishing: (a) standards for transparency of methods; (b) justification requirements for transfers (of knowledge, theories or concepts); (c) distinctions between different fields of legal scholarship; and (d) protective mechanisms against over-complexity (Vesting 2004; Hoffmann-Riem 2004, 60–62). The last point is especially important: while the interdisciplinary ambitions of the Neue Verwaltungsrechtswissenschaft add a new level of complexity to legal analysis, the procedural and institutional limitations both of legal practice and legal scholarship must be kept in mind. A recent example for how economic theories on systemic risk can successfully be tied to an analysis of EU banking regulation is Kaufhold’s work on systemic risk oversight (Kaufhold 2016).

27   This includes sociological and economic theories operating with correlations, p ­ robabilities or emergence. However, using heuristics and everyday theories becomes inevitable, if no ­methodologically sound knowledge exists (Hoffmann-Riem 2016).

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96  Comparative administrative law 3.4  The Role of Concepts in the ‘Neue Verwaltungsrechtswissenschaft’ A specific form of dialogue centres around concepts that are used in a multidisciplinary context. Concepts are comprehensive ordering principles that bundle and structure descriptions of reality and normative valuations and guide the process of reasoning and decision-making; as such they are indispensable for legal discourse. Traditionally, the goal of legal scholars has been to create concepts that are associated with clear legal consequences and that enable judges and administrators to process information within the legal system quickly and without losses, the prime example being Otto Mayer’s concept of the administrative act.28 The Neue Verwaltungsrechtswissenschaft does not fail to recognize the importance of such unambiguous concepts as well as the connection between conceptual precision and the rule of law. From the regulatory perspective, however, concepts have an additional function in that they can signify a regulatory problem (Eifert 2014, 213). In this regard, concepts that transcend or ‘bridge’ disciplinary boundaries are particularly interesting. They work like a ‘key’ insofar as their analysis makes interdisciplinary insights accessible (Schlüsselbegriffe). These Schlüsselbegriffe have received particular attention in the Neue Verwaltungsrechtswissenschaft (Voßkuhle 2001b; Baer 2004; Kaiser 2013). And although multidisciplinary dialogue is difficult, the discussion of concepts such as Gewährleistung (Eifert 1998), responsibility (Schuppert 1999), regulated self-regulation (Berg et al. 2001) or trust (Wischmeyer 2016) has proven to be extremely productive.29 Over time, some of these concepts have crystallized and have been incorporated into German administrative law doctrine, judicial decisions, and legislation thus becoming more and more similar to traditional legal concepts. Gewährleistungsverantwortung (responsibility for guarantees), for example, is today associated with a very specific set of legal problems and is regularly used by the courts to describe the responsibilities of the state in the aftermath of privatization.30

4. ADMINISTRATIVE LAW SCHOLARSHIP BETWEEN METHODOLOGICAL REFORM AND CONSOLIDATION All in all, the methodological debate accompanying the emergence of the movement must not be understood as another querelle des Anciens et des Modernes.31 Rather, the two sides have always shared a common goal: to contribute to a rational and reliable administrative law that supports courts and administrators in performing their mission and that serves the interests of the citizens. Nevertheless, the Neue Verwaltungsrechtswissenschaft has changed the way scholars work and has enabled them to meet challenges which the juristic method had been unable to address. Despite resistance, the interdisciplinary impetus of  See supra footnote 6.   The same is true for a specific type of metaphors that have a strong suggestive power and are able to influence politicians and administrators (Leitbilder) (Baer 2004; Braun 2015). 30   See BVerfGE 130, 76. 31   For differing perspectives on the debate see Krebs 2004; Pöcker 2007, 98 ff.; Treiber 2007 and 2008; Appel 2008; Eifert 2008; Grzeszick 2009; Kahl 2010; Voßkuhle 2012; Eifert 2014; Röhl 2015; von Arnauld 2015; Schäfer 2016. 28 29

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The ‘ Neue Verwaltungsrechtswissenschaft’  97 the movement has encouraged a more open, diverse, nuanced, and comparative administrative law scholarship. The insights which the Neue Verwaltungsrechtswissenschaft has gained by adding new levels of reflection and complexity are now gradually consolidating and becoming part of doctrinal efforts in which the traditional and the new perspective are productively combined (Schmidt-Aßmann 2013).

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The ‘ Neue Verwaltungsrechtswissenschaft’  99 Hoffmann-Riem, W. and E. Schmidt-Aßmann (eds) (1998), Effizienz als Herausforderung an das Verwaltungsrecht, Baden-Baden: Nomos. Hoffmann-Riem, W. and E. Schmidt-Aßmann (eds) (2000), Verwaltungsrecht in der Informationsgesellschaft, Baden-Baden: Nomos. Hoffmann-Riem, W. and E. Schmidt-Aßmann (eds) (2003), Verwaltungsverfahren und Verwaltungsverfahrensgesetz, Baden-Baden: Nomos. Hoffmann-Riem, W., E. Schmidt-Aßmann and A. Voßkuhle (eds) (2012a), Grundlagen des Verwaltungsrechts, vol. 1, 2nd ed., München: Beck. Hoffmann-Riem, W., E. Schmidt-Aßmann and A. Voßkuhle (eds) (2012b), Grundlagen des Verwaltungsrechts, vol. 2, 2nd ed., München: Beck. Hoffmann-Riem, W., E. Schmidt-Aßmann and A. Voßkuhle (eds) (2013), Grundlagen des Verwaltungsrechts, vol. 3, 2nd ed., München: Beck. Jaffe, L. (1965), Judicial Control of Administrative Action, Boston: Little, Brown. Jesch, D. (1961), Gesetz und Verwaltung, Tübingen: Mohr. Kahl, W. (2010), ‘What Is “New” about the “New Administrative Law Science” in Germany?,’ European Public Law 16, 105–21. Kaiser, J.H. (ed.), (1965–1972) Planung, vols 1–6, Baden-Baden: Nomos. Kaiser, A.-B. (2013), ‘Multidisziplinäre Begriffsverwendungen,’ in Ino Augsberg (ed.), Extrajuridisches Wissen im Verwaltungsrecht, Tübingen: Mohr. Karpen, U. and H. Hof (eds) (2003), Wirkungsforschung zum Recht IV, Baden-Baden: Nomos. Kaufhold, A.-K. (2016), Systemaufsicht. Anforderungen an die Ausgestaltung einer Aufsicht zur Abwehr systemischer Risiken, Tübingen: Mohr. Krebs, W. (1993), ‘Verträge und Absprachen zwischen Verwaltung und Privaten,’ in Veröffentlichungen der Vereinigung Deutscher Staatsrechtslehrer, vol. 52, Berlin: de Gruyter. Krebs, W. (2004), ‘Die Juristische Methode im Verwaltungsrecht,’ in Wolfgang Hoffmann-Riem and Eberhard Schmidt-Aßmann (eds), Methoden der Verwaltungsrechtswissenschaft, Baden-Baden: Nomos. Larenz, K. and C.-W. Canaris (1995), Methodenlehre der Rechtswissenschaft, 3rd ed., Berlin: Springer. Lepsius, O. (1999), Steuerungsdiskussion, Systemtheorie und Parlamentarismuskritik, Tübingen: Mohr. Luhmann, N. (1966), Recht und Automation in der öffentlichen Verwaltung, Berlin: Duncker & Humblot. Luhmann, N. (1999 [1964]), Funktionen und Folgen formaler Organisation, 5th ed., Berlin: Duncker & Humblot. Majone, G. (1997), ‘From the Positive to the Regulatory State,’ Journal of Public Policy 17(2), 139–67. Mashaw, J.L. (2007), ‘Agency-Centered Or Court-Centered Administrative Law?,’ Administrative Law Review 59, 889–904. Mayntz, R. et al. (1978), Vollzugsprobleme der Umweltpolitik, Stuttgart: Kohlhammer. Mayntz, R. (1997 [1987]), ‘Politische Steuerung und gesellschaftliche Steuerungsprobleme,’ in Renate Mayntz (ed.), Soziale Dynamik und politische Steuerung, Frankfurt am Main: Campus Verlag. Mayntz, R. and F.W. Scharpf (1995), ‘Der Ansatz des akteurzentrierten Institutionalismus’, in Renate Mayntz and Fritz W. Scharpf (eds), Gesellschaftliche Selbstregelung und politische Steuerung, Frankfurt am Main: Campus-Verlag. Möllers, C. (1999), ‘Braucht das öffentliche Recht einen neuen Methoden- und Richtungsstreit?,’ Verwaltungsarchiv 90, 187–207. Müller, F. and R. Christensen (2013), Juristische Methodik, vol. 1, 11th ed., Berlin: Duncker & Humblot. Ossenbühl, F. (1968), Verwaltungsvorschriften und Grundgesetz, Bad Homburg: Gehlen. Pitschas, R. (1990), Verwaltungsverantwortung und Verwaltungsverfahren, München: Beck. Pitschas, R. (1993), ‘Allgemeines Verwaltungsrecht als Teil der öffentlichen Informationsordnung,’ in Wolfgang Hoffmann-Riem, Eberhard Schmidt-Aßmann and Gunnar Folke Schuppert (eds), Reform des Allgemeinen Verwaltungsrechts, Baden-Baden: Nomos. Pöcker, M. (2007), Stasis und Wandel der Rechtsdogmatik, Tübingen: Mohr. Ritter, E.-H. (1979), ‘Der kooperative Staat,’ Archiv des öffentlichen Rechts 104, 389–413. Ritter, E.-H. (1992), ‘Von den Schwierigkeiten des Rechts mit der Ökologie,’ Die Öffentliche Verwaltung 45, 641–9. Röhl, H.C. (2015), ‘Öffnung der öffentlich-rechtlichen Methode durch Internationalität und Interdisziplinarität’, in Veröffentlichungen der Vereinigung Deutscher Staatsrechtslehrer, vol. 74, Berlin: de Gruyter. Röhl, H.C. (ed.) (2010), Wissen – Zur kognitiven Dimension des Rechts, Berlin: Duncker & Humblot. Rossen, H. (1999), Vollzug und Verhandlung, Tübingen: Mohr. Roßnagel, A. (1993), Rechtswissenschaftliche Technikfolgenabschätzung, Baden-Baden: Nomos. Ruffert, M. (2003), ‘Die Europäisierung der Verwaltungsrechtslehre,’ Die Verwaltung 36, 293–319. Ruffert, M. (2004), ‘Die Methodik der Verwaltungsrechtswissenschaft in anderen Ländern der Europäischen Union,’ in Wolfgang Hoffmann-Riem and Eberhard Schmidt-Aßmann (eds), Methoden der Verwaltungsrechtswissenschaft, Baden-Baden: Nomos.

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100  Comparative administrative law Ruffert, M. (2007), ‘The Transformation of Administrative Law as a Transnational Methodological Project,’ in Matthias Ruffert, (ed.), The Transformation of Administrative Law in Europe, Munich: Sellier. Rupp, H.H. (1991 [1965]), Grundfragen der heutigen Verwaltungsrechtslehre, 2nd ed., Tübingen: Mohr. Schäfer, J.P. (2016), Die Umgestaltung des Verwaltungsrechts, Tübingen: Mohr. Scherzberg, A. (2000a), Die Öffentlichkeit der Verwaltung, Baden-Baden: Nomos. Scherzberg, A. (2000b), ‘Die Öffentliche Verwaltung als informationelle Organisation,’ in Wolfgang HoffmannRiem and Eberhard Schmidt-Aßmann (eds), Verwaltungsrecht in der Informationsgesellschaft, Baden-Baden: Nomos. Schmidt-Aßmann, E. (1995), ‘Zur Situation der rechtswissenschaftlichen Forschung’, Juristenzeitung 50, 2–10. Schmidt-Aßmann, E. (1997), ‘Verwaltungsorganisationsrecht als Steuerungsressource – Einleitende Problem­ skizze’, in Eberhard Schmidt-Aßmann and Wolfgang Hoffmann-Riem (eds), Verwaltungsorganisationsrecht als Steuerungsressource, Baden-Baden: Nomos. Schmidt-Aßmann, E. (2006), Das allgemeine Verwaltungsrecht als Ordnungsidee, 2nd ed., Berlin: Springer. Schmidt-Aßmann, E. (2011), ‘Principles of an International Order of Information,’ in Gordon Anthony JeanBernard Auby, John Morison and Tom Zwart (eds), Values in Global Administrative Law, Oxford: Hart. Schmidt-Aßmann, E. (2013), Verwaltungsrechtliche Dogmatik, Tübingen: Mohr. Schmidt-Aßmann, E. and W. Hoffmann-Riem (eds) (1997), Verwaltungsorganisationsrecht als Steuerungsressource, Baden-Baden: Nomos. Schmidt-Aßmann, E. and W. Hoffmann-Riem (eds) (1999), Strukturen des Europäischen Verwaltungsrechts, Baden-Baden: Nomos. Schmidt-Aßmann, E. and W. Hoffmann-Riem (eds) (2001), Verwaltungskontrolle, Baden-Baden: Nomos. Schmidt-Aßmann, E. and W. Hoffmann-Riem (eds) (2004), Methoden der Verwaltungsrechtswissenschaft, Baden-Baden: Nomos. Schmidt-Aßmann, E. and C. Möllers (2006), ‘The Scope and Accountablity of Executive Power in Germany,’ in Paul Craig and Adam Tomkins (eds), The Executive and Public Law, Oxford: Oxford University Press. Schmidt-Aßmann, E. and G. Dimitropoulos (2011), ‘Vertrauen in und durch Recht,’ in Markus Weingardt (ed.), Vertrauen in der Krise, Baden-Baden: Nomos. Schmidt-De Caluwe, R. (1999), Der Verwaltungsakt in der Lehre Otto Mayers, Tübingen: Mohr. Schneider, J.-P. (1997), ‘Das Neue Steuerungsmodell als Innovationsimpuls für Verwaltungsorganisation und Verwaltungsrecht,’ in Eberhard Schmidt-Aßmann and Wolfgang Hoffmann-Riem (eds), Verwaltungsorganisa­ tionsrecht als Steuerungsressource, Baden-Baden: Nomos. Schneider, J.-P. (2007), ‘Regulation and Europeanisation as Key Patterns of Change in Administrative Law,’ in The Transformation of Administrative Law in Europe, Matthias Ruffert (ed.), Munich: Sellier. Schuppert, G.F. (1993), ‘Verwaltungsrechtswissenschaft als Steuerungswissenschaft,’ in Wolfgang HoffmannRiem, Eberhard Schmidt-Aßmann, and Gunnar Schuppert (eds), Reform des Allgemeinen Verwaltungsrechts, Baden-Baden: Nomos. Schuppert, G.F. (2008), ‘Verwaltungsrecht und Verwaltungsrechtswissenschaft im Wandel,’ Archiv des öffentlichen Rechts 133, 79–106. Schuppert, G.F. (2012), ‘Verwaltungsorganisation und Verwaltungsorganisationsrecht als Steuerungsfaktoren,’ in Wolfgang Hoffmann-Riem, Eberhard Schmidt-Aßmann and Andreas Voßkuhle (eds), Grundlagen des Verwaltungsrechts, vol. 1, 2nd ed., München: Beck. Schuppert, G.F. (ed.) (1999), Jenseits von Privatisierung und ‘schlankem’ Staat, Baden-Baden: Nomos. Schuppert, G.F. (ed.) (2004), Der Gewährleistungsstaat – ein Leitbild auf dem Prüfstand, Baden-Baden: Nomos. Schuppert, G.F. and C. Bumke (eds) (2000), Die Konstitutionalisierung der Rechtsordnung, Baden-Baden: Nomos. Schuppert, G.F. and Andreas Voßkuhle (eds) (2008), Governance von und durch Wissen, Baden-Baden: Nomos. Siegel, T. (2009), Entscheidungsfindung im Verwaltungsverbund, Tübingen: Mohr. Sommermann, K.-P. (2015), ‘Objectives and Methods of a Transnational Science of Administrative Law’, in Hermann-Josef Blanke and Pedro Cruz Villalón (eds), Common European Legal Thinking: Essays in Honor of Albrecht Weber, Berlin: Springer. Spiecker gen. Döhmann, I. and P. Collin (eds) (2008), Generierung und Transfer staatlichen Wissens, Tübingen: Mohr. Stolleis, M. (1989), ‘Die Entstehung des Interventionsstaates und das öffentliche Recht,’ Zeitschrift für Neuere Rechtsgeschichte 11, 129–47. Stolleis, M. (1992), Geschichte des öffentlichen Rechts in Deutschland, vol. 2, München: Beck. Stolleis, M. (1994), ‘Verwaltungsrechtswissenschaft in der Bundesrepublik Deutschland,’ in Dieter Simon (ed.), Rechtswissenschaft in der Bonner Republik, Frankfurt am Main: Suhrkamp. Stolleis, M. (1999), Geschichte des öffentlichen Rechts in Deutschland, vol. 3, München: Beck. Stolleis, M. (2012), Geschichte des öffentlichen Rechts in Deutschland, vol. 4, München: Beck. Thym, D. (2010), Migrationsverwaltungsrecht, Tübingen: Mohr.

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The ‘ Neue Verwaltungsrechtswissenschaft’  101 Treiber, H. (2007 and 2008), ‘Verwaltungswissenschaft als Steuerungswissenschaft – eine Revolution auf dem Papier?,’ Kritische Justiz, 40, 328–46 and 41, 48–70. Trute, H.-H. (2004), ‘Methodik der Herstellung und Darstellung verwaltungsrechtlicher Entscheidungen,’ in Eberhard Schmidt-Aßmann and Wolfgang Hoffmann-Riem (eds), Methoden der Verwaltungsrechtswis­ senschaft, Baden-Baden: Nomos. Vesting, T. (2001), ‘Zur Entwicklung einer “Informationsordnung”’, in Peter Badura and Horst Dreier (eds), Festschrift 50 Jahre Bundesverfassungsgericht, vol. 2, Tübingen: Mohr. Vesting, T. (2004), ‘Nachbarwissenschaftlich informierte und reflektierte Verwaltungsrechtswissenschaft,’ in Eberhard Schmidt-Aßmann and Wolfgang Hoffmann-Riem (eds), Methoden der Verwaltungsrechtswis­ senschaft, Baden-Baden: Nomos. Voßkuhle, A. (1994),‘Rechtstatsachenforschung und Verwaltungsdogmatik’, Verwaltungsarchiv 85, 567–85. Voßkuhle, A. (1996), ‘Duldung rechtswidrigen Verwaltungshandels?,’ Die Verwaltung 29, 511–38. Voßkuhle, A. (1999a), ‘Die Reform des Verwaltungsrechts als Projekt der Wissenschaft,’ Die Verwaltung 32, 545–54. Voßkuhle, A. (1999b), Das Kompensationsprinzip, Tübingen: Mohr. Voßkuhle, A. (2001a), ‘Der “Dienstleistungsstaat”: Über Nutzen und Gefahren von Staatsbildern’, Der Staat 40, 495–523. Voßkuhle, A. (2001b), ‘“Schlüsselbegriffe” der Verwaltungsrechtsreform – eine kritische Bestandsaufnahme,’ Verwaltungsarchiv 92, 184–215. Voßkuhle, A. (2002a), ‘Strukturen und Bauformen neuer Verwaltungsverfahren,’ in Wolfgang Hoffmann-Riem and Eberhard Schmidt-Aßmann (eds), Verwaltungsverfahren und Verwaltungsverfahrensgesetz, Baden-Baden: Nomos. Voßkuhle, A. (2002b), ‘Methode und Pragmatik im Öffentlichen Recht,’ in Hartmut Bauer, Detlef Czybulka, Wolfgang Kahl and Andreas Voßkuhle (eds), Umwelt, Wirtschaft und Recht, Tübingen: Mohr. Voßkuhle, A. (2003), ‘Beteiligung Privater an der Wahrnehmung öffentlicher Aufgaben und staatliche Verantwortung,’ in Veröffentlichungen der Vereinigung Deutscher Staatsrechtslehrer, vol. 62, Berlin: de Gruyter. Voßkuhle, A. (2012), ‘Neue Verwaltungsrechtswissenschaft,’ in Wolfgang Hoffmann-Riem, Eberhard SchmidtAßmann and Andreas Voßkuhle (eds), Grundlagen des Verwaltungsrechts, vol. 1, 2nd ed., München: Beck. Wahl, R. (1978), Rechtsfragen der Landesplanung und Landesentwicklung, vol. 1–2, Berlin: Duncker & Humblot. Wahl, R. (1993), ‘Die Aufgabenabhängigkeit von Verwaltung und Verwaltungsrecht,’ in Wolfgang HoffmannRiem, Eberhard Schmidt-Aßmann and Gunnar F. Schuppert (eds), Reform des Allgemeinen Verwaltungsrechts, Baden-Baden: Nomos. Wahl, R. (1999), ‘Die zweite Phase des Öffentlichen Rechts in Deutschland. Die Europäisierung des Öffentlichen Rechts,’ Der Staat 38, 495–518. Wahl, R. (2006), Herausforderungen und Antworten: Das öffentliche Recht der letzten fünf Jahrzehnte, Berlin: de Gruyter. Willke, H. (1995), Ironie des Staates, Frankfurt am Main, Suhrkamp. Winter, G. (1975), Das Vollzugsdefizit im Wasserrecht, Berlin: Schmidt. Wischmeyer, T. (2015), Zwecke im Recht des Verfassungsstaates, Tübingen: Mohr. Wischmeyer, T. (2016), ‘Generating Trust Through Law? Judicial Cooperation in the European Union and the “Principle of Mutual Trust,”’ German Law Journal 17, 339–82. Wischmeyer, T. (2017), ‘Informationssicherheitsrecht’, Die Verwaltung 50. Wollenschläger, B. (2009), Wissensgenerierung im Verfahren, Tübingen: Mohr.

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7.  Transformations of administrative law: Italy from a comparative perspective Marco D’Alberti

Italian administrative law has experienced numerous transformations over time. This chapter analyzes these changes from a comparative and historical perspective, showing analogies and differences relative to other countries both as to the foundations and the development of administrative law. Several topics will be examined, including the balance between public authority and private rights; the relationship between administrative law and private law; the scope and intensity of judicial review; the role of administrative ­procedures; and the influence of EU and global law.

1. ORIGINS: ITALIAN CHANGES IN RELATION TO THE DOMINANT MODEL OF ADMINISTRATIVE LAW Administrative law is relatively young compared to the deeper history of private law or criminal law. There are different opinions about the point in time when administrative law emerged. Even as some relevant aspects of this law had earlier origins, it was only in the late eighteenth century that an organized body of administrative law came to light.1 The two main European models of administrative law developed in France and England (Cassese 2000). Italian administrative law in some sense emerged at a midpoint between those two models. Therefore, to understand the origins and evolution of the Italian case it is necessary to consider the French and the British experiences. France had a leading role between the late eighteenth century and the beginning of the nineteenth century in the development of administrative law. A variety of ‘règles exorbitantes’ emerged, which gave public officers relevant powers and a legal position of supremacy vis-à-vis citizens. These norms were quite dissimilar from the general rules of private law, under which the parties were understood in principle to be on an equal level. For instance, even before the Revolution of 1789, public officers were entitled to exercise substantial powers of police, public order and security, as well as sanction and the raising of revenue (Tocqueville 1988 [1856], 127 ff.). These special rules were not conceived as a mere collection of derogations from private law but as elements of an autonomous legal system (Laubadère 1980, 34 ff.; Gaudemet 2012, 21 ff.). This autonomy was based on two main aspects. First, administrative law not only had its own rules but its own principles – for example, ‘la décision exécutoire,’ which allowed public administration to unilaterally adopt a restrictive measure against a private party. Secondly, administrative law disputes were mainly resolved within the public adminis-

1

  On earlier appearances in France see Mestre 1985; on England see Craig 2015.

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Transformations of administrative law  103 tration itself or by a special judge; the ordinary courts of justice were for the most part excluded, based on a peculiar interpretation of the separation of powers according to which the judiciary could not rule on administrative action.2 The Council of State, established by the Constitution of the Year VIII (1799), originally limited its role to giving opinions to the government that retained the power to adjudicate (‘justice retenue’). In 1872, the Council of State gained the power to resolve such disputes in its own right (the so-called ‘justice déléguée’). The jurisdiction of the ordinary courts was limited almost exclusively to cases concerning private law measures adopted by the administration. Therefore, the special character of the French model manifested itself both in substantive norms and in the mechanisms of legal control. Coinciding with these developments, beginning in the first decades of the nineteenth century, university chairs and courses in droit administratif were established in France and several treatises were published.3 This all suggested that droit administratif was emerging as a complete legal system with its own substantive rules and principles, with a specific mechanism of judicial review in the hands of special administrative courts, and with its own correspondingly distinct academic field. The evolution in common law countries was quite different. In nineteenth-century England and indeed before, several statutes gave public administrations a wide set of relevant powers, such as compulsory purchase, planning, and maintenance of domestic security. In this way, a definite administrative law emerged, based on ‘vast empires of executive power’ (Wade 1988, 7). Administrative law was not understood as autonomous in respect to the ordinary law of the land, as it was in France. Rather, it operated mainly through derogations from ordinary law, with administrative law disputes decided by the ordinary courts of justice. Albert Dicey, in his famous Introduction of 1885, did not deny the existence of special administrative powers, but he wrote that these powers were mere exceptions to ordinary law that governed the relation of one Englishman to another (Dicey 1979 [1885], 387). The subsequent doctrine, however, which was initiated by Frederic Maitland and is still arguably dominant, has placed more emphasis on the differences between administrative law and ordinary law in England (Maitland 1979 [1888], 505–6; Baker 1979, 130–31; Craig 1983, 16 ff.). A glance must be given to the United States as well. According to the traditional interpretation, US administrative law only began to emerge in the late nineteenth century, when the federal independent agencies were established, starting from the Interstate Commerce Commission (1887), as well as when the Pendleton Act on civil service entered into force (1883). But some features of the American administrative law had in fact already emerged at the end of the eighteenth century, as in France, when statutes gave public officers ‘delegated authority’, such as the power to raise revenues and to sanction, for instance in the ports (Mashaw 2012, 35 ff.; Schwartz 1976, 16 ff.). The US in part

2   This jurisdictional exclusion could be traced back to the Edit de Saint-Germain of February 1641, and then later more precisely defined in the Law on judiciary of August 1790 (art. 13, 2nd Title). See on this point Auby and Drago 1984, I, 375 ff. 3   Among the first teaching activities, a course of droit administratif was established by a statute of 1804 (loi du 22 ventôse an XII) and was given in Paris by L.F.R. Portiez de l’Oise; J.-M.  de Gérando gave a course of droit public et administratif in 1819 at the Faculty of Law in Paris. Among the first treatises were Portiez de l’Oise 1808; de Lahaye de Cormenin 1822; Macarel 1844; Vivien 1845.

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104  Comparative administrative law f­ollowed the English path. However, there was also a stronger awareness that administrative law was quite different from the ordinary law, due perhaps to a close connection between America and France, particularly during the War for American Independence. In any case, as in England, American administrative law was not thoroughly autonomous in respect to ordinary law and mainly consisted of derogations from it. Ordinary courts of justice continued to decide administrative law cases, and in the late nineteenth century a specific administrative-law literature began to appear.4 This is the context within which one should examine the emergence of Italian administrative law. Italy has long mixed both the French and the Anglo-American models. A definite body of administrative law emerged between the end of the eighteenth century and the beginning of the nineteenth century. Italy reached its political and administrative unification in the 1860s, just a few years before Germany, and up to that point the development of administrative law was fragmented among the different pre-unification states. But certainly Italian administrative law did indeed emerge at this time, and the French model was clearly dominant. There generally existed special substantive rules for administrative action that gave public officers relevant powers in several matters: for instance, expropri­ ation. Administrative law disputes were usually resolved by the administration itself or by special judges who were not completely independent of the executive branch, with only a very limited role being played by the ordinary courts of justice. A Council of State, structured in three sections, was established in 1831 in the Kingdom of Piedmont-Sardinia, mainly with consultative powers (Nigro 1976, 55 ff.; Aimo 2000, 27 ff.; Travi 2014, 13 ff.). University chairs and courses in administrative law and treatises in the matter appeared quite early in the nineteenth century.5 With the administrative unification of the country in 1865, Italian administrative law witnessed a change. Special substantive rules and powers remained. But the ordinary law of the land acquired a wide application. One example is how administrative concessions for building railroads and running the railway service were deemed to be contracts instead of unilateral administrative measures. Others are how civil servants were hired with a private law contract, as well as how expropriation of private property was considered as a purchase, even though compulsory (D’Alberti 1992, 125 ff.). Judicial review of administrative action was largely attributed to the ordinary courts of justice. A statute entered into force in 1865 establishing that all the disputes relating to administrative agencies and concerning ‘civil and political rights’ were to be resolved by the ordinary judge, whereas other cases involving public authority were to be decided by the administration itself.6 Nonetheless, the jurisdiction of the ordinary courts vis-à-vis administrative action was limited. The ordinary courts, for example, were not entitled to quash administrative acts: they could only deny their application on a case-by-case basis.7 Moreover, ordinary courts were highly deferential toward public administration and were reluctant to exercise their jurisdiction when an authoritative administrative act was the object of the dispute.   See Goodnow 1893 and 1905.   Among the first handbooks were Romagnosi 1814 and Manna 1840. On the first University chairs and courses see Sandulli 2009, 1 ff. 6   Law no. 2248 of March 20, 1865, all. E, articles 2 and 3. 7   Articles 4 and 5. 4 5

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Transformations of administrative law  105 The Council of State became a national institution and kept the three-section structure and the consultative powers of its Piedmontese-Sardinian predecessor.8 Thus, Italian administrative law appeared – in some respects – to be closer to the English and American experiences, even though, in practice, a different path was followed. A new change emerged at the end of the 1880s. Special substantive rules and powers expanded. The jurisdiction of the ordinary courts was confirmed for disputes concerning ‘civil and political rights’. But the solution of all other cases, having to do with ‘interests’, were attributed to a new section of the Council of State, the fourth, which was charged with assuring ‘justice in the administration’, and which had the power to quash illegitimate administrative acts.9 The Council of State was an administrative body, but the fourth section was considered to be a peculiar entity, halfway between a public administration and a court of justice. It was given a full judicial status under a statute of 1907.10 Therefore, a dual jurisdiction was introduced: the ordinary courts were now flanked by a special court of justice and the latter soon acquired a leading role, having jurisdiction over the major administrative law cases. Italy had thus returned to the French model, and in this transition, the contribution of legal theory was significant. In fact, legal scholars became protagonists in the construction of Italian administrative law. The leading voices were Vittorio Emanuele Orlando, Oreste Ranelletti and Santi Romano, who, between the end of the nineteenth century and the beginning of twentieth century, created a real ‘system’ of administrative law. At the heart of this system was the concept of the ‘administrative act’, which was progressively refined over subsequent decades. The administrative act was usually understood as discretionary and capable of impinging upon private liberty and property without citizens’ consent (Mattarella 2000). Scholars held that, vis-à-vis an administrative act, private persons did not have ‘civil or political rights’ but only mere ‘interests’: thus, jurisdiction belonged to the Council of State and not to the ordinary courts of justice. As a consequence, given the enormous use of administrative acts, administrative authority increased, citizens’ rights were reduced, and the Council of State – a special judge – became dominant in judicial review of administrative action. Private law was largely abandoned and contract almost disappeared in administrative disputes. Measures adopted by public administrations in such areas as civil service, concessions, licenses and expropriation for public utility were transformed into unilateral administrative acts. At the beginning of the twentieth century, Italian public administration stood legally in a position well above the governed, under a special regime of administrative law, just as had happened in France and was also occurring in Germany and Spain in the same period. Administrative power – like ‘la puissance publique’ (public power) of the French droit administratif – substantially limited private liberties, mainly in the name of public order and public security. Moreover, because the political unification of the state was fairly recent and had been reached with many vicissitudes, strong administrative powers were deemed necessary in order to strengthen national unity and to avoid anarchy or

  Under the same Law of 1865, all. D.   Law no. 5992 of March 31, 1889, art. 3. 10   Law no. 62 of March 7, 1907, art. 1. On the evolution of judicial review of administrative action see, e.g., Nigro 1976; Mannori and Sordi 2001; Travi 2014.  8  9

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106  Comparative administrative law ­secession.11 In sum, an authoritarian model was adopted, although this outcome soon went through several relevant changes, which subsequent sections of this chapter will trace.

2. FROM ‘PUISSANCE’ TO THE PROTECTION OF WELFARE RIGHTS Soon after the authoritarian model had consolidated itself, a substantial change took place, in the first decade of the twentieth century. Italy, once more, followed the French experience, where a similar change occurred. The administrative ‘puissance’, which restricted liberties in the name of public order and security, began to give way to new aims pursued by public administrations. The change emerged with the expansion of the right to vote and the establishment of trade unions and political parties. The very structure of the state was modified. The old oligarchic system led by the bourgeoisie began to accept elements of democracy. Parliament was no longer a mere expression of the interests of the middle class. This brought about a new political demand, in which representatives of the emerging social groups asked for the protection of welfare rights (Giannini 1993, I, 48 ff., and 1986, 25 ff.). This was the context in which, at the beginning of the twentieth century, the theory and practice of ‘service public’ had also developed in France (Chevallier 1991). Public administrations began flanking their ‘puissance’, i.e., their authoritarian powers, with activities aimed at supplying services for the citizens’ welfare, such as public health, social security, education, public transport. Administrative law went beyond authority towards solidarity. Two important Italian statutes entered into force in the first decade of the twentieth century that reflected this shift. The first established that local services, such as public transport, water supply, street lighting, which were usually managed by private undertakings, were to be supplied by municipalities, thus becoming ‘public’ in a full sense.12 Hence local administration began to take on the task of guaranteeing social welfare rights. The second statute established that the construction of railroads and the railway service should pass from the hands of private companies to a national enterprise, since the private undertakings had failed to provide a good service in terms of security, innovation and fair protection of the employees.13 Nationalization of railways was aimed at assuring a fundamental public service of good quality for citizens. Under other statutes, relevant welfare rights began to be guaranteed, such as the right to a pension and other social security benefits, the right to healthy workplaces, and the right to work a limited number of hours. In common law countries the attention paid to the protection of social welfare rights had emerged earlier and followed a different path. English precedents of a social administration can be traced back to the Poor Relief Act of 1601, which had provided for benefits

11   This aspect is clear in Orlando 1954 [1889], 21, where he underlines that legal scholars must build an administrative law based on the sovereignty of the state in order to preserve its unity. 12   Law no. 103 of March 29, 1903. 13   Law no. 137 of April 22, 1905.

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Transformations of administrative law  107 given to the poor. But the most relevant phase for the protection of the poorest sections of society began around mid-nineteenth century with more complete welfare legislation (Cranston 1985, 1 ff.; Craig 2012, 37 ff.). In the US welfare protections could be traced to military pensions, which first arose at the end of the eighteenth century but developed in the second half of the nineteenth century, following the US Civil War (Mashaw 2012, 256 ff.). Social welfare law then flourished during the New Deal, when the National Labor Relations Board, the Federal Housing Administration and the Social Security Administration were established (Breyer et al. 2006, 18 ff.). In sum, from the first decades of the twentieth century onward, the protection of social welfare rights developed in various national legal systems. Indeed, eventually some of these protections would receive recognition in international law, first with the Universal Declaration of Human Rights of 1948, and then with the International Covenant on Economic, Social and Cultural Rights, entered into force in 1976. However, the upward trajectory in social welfare rights was interrupted in the 1970s. Because such rights are costly for public administration, the crisis of public finance that hit various countries in that period posed a serious obstacle for their continued advancement, particularly in the expansion of benefits or services (O’ Connor 2009 [1973]). In Italy, as elsewhere, the rights to public education, health and social security suffered from many restrictions. This trend would intensify – as we shall see below – with globalization and the financial crisis of 2007.

3. ORDINARY LAW RESUMED AND ENLARGED: THE EXPANSION OF NEGOTIATED MEASURES The industrial take-off of the first decade of the twentieth century, under the government led by Giovanni Giolitti, posed a new challenge to the original administrative law model founded on the unilateral discretion of the bureaucracy and on its authoritarian impact on private parties. Such a model could not be applied to the relationships between public administration and business enterprises. To foster the development of the latter, there was more a need for public support rather than administrative prescriptions. If government was interested in private companies’ collaboration in order to carry out activities of public interest – such as street lighting, construction of public works, or transportation – it had to stand with industry on the same footing and reduce unilateral discretion, lest ­entrepreneurs invest capital elsewhere. The result was an increasing number of exceptions introduced into the previous doctrine of administrative law. Many sectors that had been brusquely captured by the unilateral administrative act were restored to contracts and ordinary law. For instance, the awarding of public financial support to industry was conceived as a contract: thus, modification and termination were subjected to strict limits. Administrative concessions for the construction of public works, or the supply of public services such as transport and distribution of energy, were also transformed from unilateral measures into contracts, mainly subjected to private law and ordinary courts’ jurisdiction (D’Alberti 1981). Urban planning agreements were also largely absorbed into the ordinary law of contract (Mazzarelli 1979). Contracts and negotiated measures continued to be largely used in administrative law during the Fascist period (1922–43), and these trends expanded in the second half of the

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108  Comparative administrative law twentieth century. Two main examples can be given, the first concerning the civil service. From the 1970s onward, with the support of trade unions seeking equal conditions for civil servants and private employees, the legal relationship between public administration and its servants shifted back to regulation by a contract instead of an administrative act. A statute of 1993 formally confirmed this practice.14 The second example concerns the agreements between public administration and private parties that were introduced by the general statute on administrative procedures. The statute permitted that the administrative proceeding could be concluded not only by a unilateral administrative act but also by an agreement that would substitute for unilateral measure.15 The gradual expansion of negotiated measures in administrative law emerged in other countries of continental Europe as well. In France, various consensual measures, such as ‘contrat administratif’, developed from the 1930s onward. Ordinary contract law applied, subject to its ‘compatibility’ with the public interest, a question to be decided by the administrative courts (Plessix 2003). Germany and Spain also saw the rise of analogous negotiated measures to which ordinary law was applicable, subject to limitations.16 Common law countries also saw the expansion of negotiated measures and the increasing application of ordinary law to administrative action. Of course, the differences from the continental European experiences remained deep, because, as has already been noted, the connection between administrative law and ordinary law was always much stronger in common law countries. Nonetheless, the use of measures based on consent greatly expanded over time. Together with their ‘peculiar legal powers of government’, public administrations developed: the legal capacities of an ordinary person . . . For purposes of policy implementation, these ordinary capacities of government are of major significance. In their exercise the government as a whole, ministers individually, and even civil servants on behalf of their ministers, may make promises, conclude contracts, acquire and dispose of property (Daintith 1989, 195).17

This has brought about a bargaining process, a regulation by contract, a negotiated government. In the US public contracts and negotiated regulation have expanded as well (Funk 1997, 1351). The developments in Italian administrative law along this dimension can once again be seen as part of a broader trend, common to other countries, involving the shift from unilateral acts to negotiated measures of varying types (Napolitano 2003, Cerulli Irelli 2011). This transformation, like changes in the development of administrative action aimed at protecting social rights, has worked to reduce the old notion of puissance publique as the foundation of administrative law.

  Legislative decree no. 29/1993.   Law no. 241/1990, art. 11. 16   On Spain, see García de Enterría and T.-R. Fernández 1989, 654 ff.; on Germany, see Maurer 1994, 359 ff. 17   On the general topic of public contracts, see Turpin 1989. 14 15

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Transformations of administrative law  109

4. TOWARD A MORE INTENSE JUDICIAL REVIEW OF ADMINISTRATIVE ACTION Another substantial change that Italian administrative law shared with other countries since the early twentieth century has been the gradual enhancement of judicial review of administrative action. As has been discussed, ordinary courts of justice in Italy have largely played a secondary role in administrative law disputes. The statute of 1865 formally enlarged their jurisdiction, but actual practice saw their role narrowed. The judicial functions of the Italian Council of State had a weak start, but since the first decade of the twentieth century its judicial review gained more intensity, under the influence of the French Conseil d’Etat. In particular, review for ‘excess of power’ expanded over the course of the first several decades of the twentieth century. In many cases the Council of State annulled administrative measures that did not pursue the public purpose provided for by the law. For instance, a decree declaring the public utility of a work was considered illegal since the project provided only a hypothetical rather than actual advantage to the public and in substance satisfied a personal interest, in this case the construction of a byway that gave access to private property.18 Such cases showed the influence of the French doctrine of détournement de pouvoir (misuse of power). In addition, the protection of the right to be heard was strengthened.19 Moreover, the Council of State came to regard reasoning as ‘intrinsic’ to administrative acts, such that it found a duty to state reasons even if this obligation was not explicitly provided for by statute.20 Interestingly, many important advances were made under the fascist regime in the 1930s. The Council of State issued judgments on the range of the interests that must be taken into consideration by administrative agencies in adopting their decisions. The administrative court did not limit its scrutiny to the administrative act but examined the overall decision-making process: acts, behaviours, facts, elements, circumstances connected to the administrative decision, and the time elapsed from one relevant deed to another. This allowed the administrative court to overrule administrative decisions that could appear valid if considered in isolation but revealed their illegality if seen in a broader context: a penetrating scrutiny on administrative action that had never existed before.21 Judgments of the ordinary courts must be considered as well. In the 1930s, the Supreme Court of Cassazione held for the first time that the public administration could be liable in tort even when a discretionary act was involved, thus reversing a longstanding case law according to which tort liability of administrative agencies was essentially nonexistent. The Court considered that public administration was obliged to respect the principles of ‘basic diligence’ and ‘ordinary prudence,’ which are applicable to any person: when these principles are violated, the administration is liable for damages.22 In this sense, judgments of both the Council of State and ordinary courts put     20   1926. 21   22   18 19

Council of State, 4th Section, May 22, 1926. Council of State, 4th Section, March 17, 1922; and January 9, 1925. Council of State, 4th Section, May 17, 1907; Council of State, 4th Section, September 10, A seminal judgment in Council of State, 4th Section, April 27, 1937. Court of Cassazione, June 19, 1936; March 8, 1937.

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110  Comparative administrative law a­ dministrative action under substantial control in the 1930s, notwithstanding the fact that the executive branch had become extremely strong in that period due to the enhancement of the fascist authoritarianism. A tough government was effectively contrasted by courts, an outcome that had no parallel, for example, in Nazi Germany (D’Alberti 1990, 435 ff.). Since the mid-twentieth century judicial review of administrative action has become even more intense. It must be stressed that, since 1971, the jurisdiction of the Council of State has in principle been limited to appeals, while the courts of first instance were the Regional Administrative Courts.23 Administrative courts have improved on the case law of the 1930s, particularly in the scrutiny of the full scope of the decision-making process carried out by administrative agencies. Thus, courts have investigated administrative action as to the regularity of hearings, the consistency of officers’ behaviour, and the adequate consideration of the interests at stake. Moreover, particular tests to assess the legitimacy of administrative action have developed in case law, based on evidence suggesting excess of power, such as manifest injustice, error of fact, violation of internal rules and practices, or conflict with previous administrative measures. And administrative decisions have been quashed if adopted in violation of general principles of law, such as fairness, good faith, diligence, and reasonableness (D’Alberti 2013, 277 ff.). Italian administrative law has also seen increasing recourse to the notion of proportionality, following the example of judgments given first in Germany and then in France, as well as by the Court of Justice of the European Union. It is worthwhile noting that in Germany review for proportionality has been often based on the well-known ‘triple phase’ test, aimed at assessing: first, the adequacy of the administrative measure with regard to the end pursued; second, the necessity of the measure or whether less restrictive alternatives exist; and third, the proportionality ‘as such’, which entails balancing the benefits achieved by the administrative measure in the name of the public interest and the costs suffered by private interests. The Court of Justice of the European Union has sometimes applied the ‘triple phase’ test (Schwartze 1992, 685 ff.; Emiliou 1996, 23 ff.; Sandulli 1998, 58 ff.; Barak 2012). In French administrative law, on the contrary, the principle of proportionality has been applied based on a less structured test, which more directly balances benefits and costs through a ‘bilan coût-avantages’.24 In Italian administrative law the principle of proportionality in fact has a fairly deep history. In the nineteenth century, Gian Domenico Romagnosi stressed that administrative action should entail the ‘least possible sacrifice’ to private property and freedom (Romagnosi 1835 [1814], 15). In recent times, Italian administrative courts have applied proportionality as a legal principle in various matters, such as administrative sanctions and fines; environmental impact analyses; food safety; housing; and in assessing the tort liability of public administrations.25 The intensity of judicial review on proportionality varies by context, but regardless the principle of proportionality has proved an effect­ ive shield against administrative power (Sandulli 1998; Galetta 1998; Cognetti 2011;   Law no. 1034 of December 6, 1971.   Seminal have been the judgments of the Conseil d’Etat in ‘Ville Nouvelle Est’ case (Ass. 28 mai 1971, rec. 409), and ‘Sainte-Marie de l’Assomption’ (Ass. 20 octobre 1972, Rec. 657). 25   Cons. Stato, Sez. VI, n. 5670/2008; Sez. IV, n. 4246/2010; Sez. VI, n. 3390/2013; Sez. IV, n. 1274/2010; Sez. V, n. 8091/2010; Sez. V, n. 1644/2014. 23 24

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Transformations of administrative law  111 D’Alberti 2014, 279). Through the various ways discussed above, Italian administrative law has ensured a substantial judicial review of administrative action. This contrasts with the comparatively weak judicial review of administrative action in common law countries, at least until the mid-twentieth century. In Great Britain, courts assessed the reasonableness of administrative measures based on a fragile test: a court would quash a measure adopted by an administrative agency only if it was so unreasonable that no person of common sense would ever think to make a similar choice – the well known ‘Wednesbury unreasonableness’.26 American courts were similarly restrained, at least until well into the second half of the twentieth century. With some exceptions, deference toward administrative agencies prevailed (Schwartz 1954). Over time prominent British and American scholars – such as Laski, Garner, Schwartz and Wade – have paid more and more attention to the case law of continental European courts, mainly of the French Conseil d’Etat, and have stressed the importance of more intensive judicial review of administrative action (Laski 1919, 447; Garner 1924, 597; Schwartz and Wade 1972). It is difficult to say how much these academic opinions influenced case law; other factors were certainly relevant. For instance, one might say that the intensity of judicial review in the US increased in a reaction to the enlargement of ­bureaucracy’s discretionary powers since the New Deal, or indeed since the advent of ‘social regulation’ in the 1960s and 1970s. It was during this later period, for example, that US courts began to exercise a ‘hard look’ over administrative measures, checking whether the administration had taken into adequate consideration all the relevant interests at stake.27 More recently, British courts began to rigorously apply the principle of proportionality in cases under the Human Rights Act of 1998 (Craig 2012, 622 ff., 658 ff.). The increasing intensity of judicial review in common law countries perhaps contradicts the oft-expressed view that the more intensive review exercised by Italian and French administrative courts should be attributed to their particular expertise in public administration. In this view, British and American ordinary courts, because they were more familiar with disputes between private parties, could not reach the same intensity in reviewing administrative measures. However, the British and American examples suggest that even ordinary courts have gradually intensified their control of administrative power. In other words, the intensity of judicial review of administrative action does not depend on whether it is undertaken by administrative or ordinary courts. It remains true that continental European administrative courts have often shown the way. It is also true that the intensity of judicial review, which has enhanced over time, varied in different periods and cases. Phases of intense review have been followed by periods of deference. Moreover, even in the same period, strong or weak judicial review has often depended on the nature of the dispute, as well as the regulatory domain.

  Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1948] 1 K.B. 223.   A seminal judgment was Citizens to Preserve Overton Park, Inc v. Volpe, 401 U.S. 402 (1971).

26 27

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112  Comparative administrative law

5. FROM ADMINISTRATIVE ACTS TO ADMINISTRATIVE PROCEDURES If France and Italy were leaders in intensifying judicial review of administrative action, continental Europe learned from the common law tradition the importance of administrative procedure in the protection of private rights vis-à-vis administrative action. Administrative agencies are entitled to take their decisions only after having followed a specific procedure, often one that allows the private citizen or enterprise to take part in the administrative decision-making process. In particular, the private party has a right to be heard either in oral hearings or through written comments before an administrative decision is taken, whether a specific order or a general rule. This constitutes an essential guarantee for citizens and undertakings. After the adoption of agency’s decision, the main guarantee consists in suing the agency before courts. In England, administrative procedures have a longstanding tradition. In particular, the principles of natural justice – notably the right to be heard before a decision is taken – have been applied to administrative procedures at least since the seventeenth century.28 This probably occurred because, in the English tradition, not only judges but also statesmen and administrative officers are understood to be under an obligation to exercise their power according to justice.29 The right to be heard before a public administration has since expanded up to the present, as a consequence of case law (Jackson 1979). No statute on the matter has been approved in Great Britain. The influence of the English tradition can be perceived in the American concept of due process of law. Due process also includes the right to be heard, which is granted both before courts and public administrations in American law (Mashaw 1985). Unlike Great Britain, legislation has played an important role in the United States, with the adoption of the Administrative Procedure Act of 1946, one of the most complete statutes on administrative procedures. In fact, this statute provides for participatory guarantees both in adjudication and rule-making procedures, in different ways depending on the type of proceeding (Strauss 2002, 199 ff.). Italian administrative law has long ignored administrative procedures, with a few notable exceptions. For instance, a statute entered into force in 1865 established a specific administrative procedure for expropriation of private property in the public interest.30 But it granted private owners only a limited right to be heard before the administrative decision to expropriate was taken. Moreover, a provision on the right to be heard before public administration was contained in another statute of 1865. It established that, in cases where ordinary courts did not have jurisdiction and the administration was entitled to decide the case, agencies had to give reasons and adopt the measure after ‘the written remarks and comments of the interested parties were admitted’.31 But this rule was never actually implemented.

  R. v. Chancellor of the University of Cambridge (Dr. Bentley’s Case), (1723) 1 Str. 557.   On the differences between the English and the French conceptions of power see BarretKriegel 1986. 30   Law no. 2359 of June 25, 1865. 31   Law no. 2248 of March 20, 1865, all. E, art. 3. 28 29

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Transformations of administrative law  113 A general statute on administrative procedure entered into force only in 1990.32 This has been one of the most important recent changes in Italian administrative law. The statute, inter alia, lays down a duty for the administrative agencies to state the reasons for their decisions, provides for an officer who is responsible for the procedure, and grants a right to be heard to those who could be harmed by the final administrative measure. This right includes the submission of written briefs that the agency must take into adequate consideration. The 1990 statute also provides that agreements between administrative agencies and private parties can be entered into even in substitution for unilateral measures. It also favours simplification of administrative procedures through various instruments and recognizes a right to have access to administrative documents. The statute suffers from some limits. For instance, the duty to state reasons and the right to be heard do not apply to rule-making procedures. Other statutes provide for those guarantees in particular sectors, such as regulation of banking and financial markets, energy, telecommunications,33 but a general provision is lacking. The right to have access to administrative documents is not granted to ‘any person’ but only to those who have an interest ‘for the protection of legally relevant situations’. Simplification instruments often lack effectiveness. A recent statute has delegated power to the government to issue decrees to address some of these limitations.34 However, the general statute on administrative procedures undoubtedly represents a substantial step forward. After a very long period stretching from the early nineteenth until the second half of the twentieth century, administrative bodies in Italy are now obliged to follow specified procedures before making decisions. A similar story has characterized other continental European legal systems, such as in France and Germany. The new decision-making processes often entail participatory guarantees for citizens and enterprises, which are now entitled to express their voice prior to administrative decisions. Italian and continental European administrative law owe this transformation to the influence of common law countries.

6. ADMINISTRATIVE LAW UNDER THE INFLUENCE OF EU LAW AND GLOBAL LAW The most relevant transformation of administrative law derives from its inclusion in a wider supranational and global context. Administrative law has long been intimately bound up with the nation-state. Other branches of law, such as private and commercial law, have always in some sense transcended national borders: contracts and companies have followed markets whose dimensions were often larger than states themselves. Since the second half of the twentieth century, administrative law has increasingly come under the influence of supranational legal systems, such as the European Union (EU), and it is also increasingly becoming a feature of the global legal space.

  Law no. 241 of August 7, 1990.   On banking and financial markets, in particular: Law no. 262 of 28 December 2005. 34   Law no. 124/2015. 32 33

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114  Comparative administrative law Many parts of administrative law are now regulated by EU law: for instance, competition law, financial supervision, public procurement, telecommunications, energy, postal services, transportation, environmental protection, consumer law. In addition, since the 1990s, the influence of international and global law on administrative law has become more relevant: for instance, on national measures concerning trade or the environment (Cassese 2012). It is an enormous change, given the domestic origins of administrative law. Many critiques – not just in Italy – have stressed the democratic deficit that stems from growth of administrative power beyond the confines of the state, not to mention the sacrifice of social rights due to the primacy of economic imperatives in EU and global law.35 This point deserves to be analyzed. To this end, the European and the global dimensions must be distinguished. In EU law, economic liberties such as free movement of goods, services and capital have always had a substantial importance. Nonetheless, over time there has been an effort to give greater protection to the rights of consumers, to health, and to the safeguard of the environment as well as non-economic interests more generally. This has led to a parallel effort to strike a proper balance between the economic dimension and the guarantees of fundamental rights. This is also confirmed by the formula ‘social market economy’ contained in the Treaties, which implies that market economy must respect social values and rights.36 In addition, the Court of Justice has aimed at achieving an equilibrium between economic and non-economic interests. For example, in cases concerning free movement of goods and services, national measures that restrict economic freedoms in the name of non-economic interests, such as the right to health, environmental safeguard and political rights, have often been upheld (Tosato 2014, 2515 ff.). Moreover, the rights protected by the European Convention on Human Rights (ECHR) constitute general principles of EU law.37 The ECHR has been applied in many cases concerning national administrative law, notably Article 6 of ECHR on the right to a fair trial, which has enhanced the protection of private rights in administrative procedures. The Charter of Fundamental Rights of the European Union (2000) must also be considered, since it has the same legal value as the Treaties.38 Charter provisions apply not merely to EU institutions but also to Member States when they are implementing EU law.39 Therefore, national administrative agencies are obliged to respect the rights protected by the Charter and its principles for a large part of their activities, since they often implement EU law. How did these aspects of EU law affect Italian administrative law? The ‘economic’ orientation of EU law has been felt in numerous ways. Two examples can be given. First, EU competition law has substantially affected Italian administrative law. A statute on competition entered into force in 1990.40 A second example refers to liberal­ izations. EU law has progressively liberalized, in varying degrees, several sectors, such as     37   38   39   40   35 36

On these critiques see Tosato 2014, 2510 ff. Art. 3, par. 3, Treaty on the European Union (TEU). Art. 6, par. 3, TEU. Art. 6, par. 1, TEU. Art. 51, par. 1, of the Charter. Law no. 287 of October 10, 1990.

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Transformations of administrative law  115 banking, telecommunications, energy, air transport, and postal services. Consequently, an increasing number of enterprises have obtained access to the markets, and monopolies have been eroded. As a consequence of the European liberalization wave, there has been a reduction in the discretionary powers of administrative agencies insofar as they played the role of gatekeeper to market access. For example, entry restrictions, such as administrative licenses or authorizations, have been attenuated. Similarly, to start an economic activity in telecommunication, a mere private notice given by the interested enterprise to public administration is sufficient: no previous administrative measure is needed and therefore discretionary powers have been cancelled.41 In other cases, such as in banking, the previous administrative authorization to start the activity remains, but discretion has been strongly reduced, since it is based on more ‘objective’ criteria, such as the amount of capital to be possessed, with no room left to evaluate the market needs. As to EU law’s influence on administrative protection of non-economic interests, several Italian examples can be given. First, the Charter of Fundamental Rights provides for the right to good administration, which includes: the right of every person to be heard before an administrative body takes a measure that would affect that person; the right to have access to administrative documents; and the obligation of public administration to give reasons for its decisions.42 The Charter – as has already been noted – applies both to the institutions of the Union and to Member States when they are implementing Union law. Under this influence, Italian administrative has recently enhanced, inter alia, the right to have access to documents by provisions aimed to strengthen transparency.43 A second example is the influence of European law on national administrative laws, which consists in a horizontal circulation of rules and principles from one Member State to another (Gorla 1981, 651 ff.). As a consequence, for instance, judicial remedies against public administration provided in Germany have been inserted in the Italian code on administrative trials. This has meant that an administrative agency, given certain conditions, can be compelled to adopt a specific measure that has been requested by the private party.44 Therefore, the protection of rights has been enhanced. A third example concerns social welfare rights provided in the Charter of Fundamental Rights, such as the rights to education, to health, to engage in work, to receive social ­security benefits and social services. The Eurozone crisis has led to a substantial restriction of many of these rights. The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (Fiscal Compact), signed on March 2, 2012, mandates that the budgetary position of the Member States shall be balanced or in surplus.45 The Italian constitution has been revised to introduce this principle.46 As a result, to reach the required budgetary balance, Italy has needed to substantially reduce public expenditure and, because its total debt exceeds the 60 per cent reference value, Italy must also lessen   Legislative decree no. 259 of August 1, 2003, art. 25.   Art. 41, par. 1 and 2, of the Charter. 43   Legislative decree no. 33 of March 14, 2013. 44   Legislative decree no. 104 of July 2, 2010, articles 31 and 34. 45   Art. 3, par. 1 and 2, of the Treaty. 46   Art. 81 of the Italian Constitution has been modified by the constitutional law no. 1 of April 20, 2012. 41 42

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116  Comparative administrative law its debt at an average rate of one-twentieth per year as a benchmark.47 A forced austerity is thus the necessary policy for today and the foreseeable future (Amato 2014, 50). This has an inevitable impact on social welfare rights, because the resources needed to make these rights effective are reduced. As has been seen, this pressure on public finances in fact began in the 1970s, but in the context of the Eurozone crisis it has become even more severe. Turning now to the global law dimension, one could say that a global administrative law has emerged over the last several decades, consisting of rules produced by many ­different regulatory bodies operating beyond the confines of the state. One could point to ­international bodies, such as the World Trade Organization (WTO); hybrid ­regulators, composed of a combination of public and private members; networks of national regulators, such as the International Competition Network; private regulators with ­ delegated powers; or national regulators implementing international norms (Kingsbury, Krisch, Stewart 2005, 15). These regulators issue rules in many sectors, such as finance, trade, competition, energy, environment, postal services. This global law has been considered as an anarchical compound, with risks of serious imbalances (Cassese 2012). In particular, relevant values – such as workers’ rights, ­environmental safeguards, the right to health – are often sacrificed to economic ­imperatives (Stiglitz 2002). This has an impact on national administrative laws and ­measures, such as those aimed at restricting world free trade for the protection of the right to health, which often risk challenge before WTO tribunals.

7. CONCLUSION To summarize and conclude, Italian administrative law has experienced numerous transformations over the last nearly 200 years. An authoritarian model was dominant at the end of the nineteenth century, reflecting the influence of the then-prevalent forms of French droit administratif. Eventually the nature of that model attenuated, leading to increasing levels of protection for the rights of the administered subjects, through the various ways that have been examined. In particular, judicial review of administrative action developed a substantial intensity, so much so that in some periods Italian practice even surpassed the French and German experiences. In addition, as the twentieth century progressed, Italy also saw the advent of negotiated measures and adversary procedures, this time following the British and American models. Over the last quarter century, the growing importance of the European and global context has enhanced economic imperatives in Italian administrative law. This has led to an effort to balance these imperatives and non-economic interests, which has been a main goal in the European legal space. Nonetheless, social welfare rights, crucial elements of the modern administrative state for much of the twentieth century – not only in Italy – have come under increasing strain and arguably deserve stronger guarantees.

47

  Art. 4 of the Treaty.

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Transformations of administrative law  117

REFERENCES Aimo, Pietro. 2000. La giustizia nell’amministrazione dall’Ottocento ad oggi, Roma-Bari: Laterza. Amato, Giuliano. 2014. ‘Un amore difficile’, in Amato, Giuliano, and Galli della Loggia, Ernesto, Europa perduta?, Bologna: Il Mulino. Auby, Jean-Marie and Drago, Roland. 1984. Traité du contentieux administratif, I, Paris: L.G.D.J. Baker, John Hamilton. 1979. An Introduction to English Legal History, London: Butterworths. Barak, Aron. 2012. Proportionality. Constitutional Rights and Their Limitations, Cambridge: Cambridge University Press. Barret-Kriegel, Blandine. 1986. Les Chemins de l’Etat, Paris: Calmann-Levy. Breyer, Stephen G., Richard B. Stewart, Cass R. Sunstein, and Adrian Vermeule. 2006. Administrative Law and Regulatory Policy, New York: Aspen Publishers. Cassese, Sabino. 2000. La construction du droit administratif. France et Royaume-Uni, Paris: Montchrestien. Cassese, Sabino. 2012. The Global Polity, Sevilla: Global Law Press. Cerulli Irelli, Vincenzo. 2011. Amministrazione pubblica e diritto privato, Torino: Giappichelli. Chevallier, Jacques. 1991. Le service public, Paris: PUF. Cognetti, Stefano. 2011. Principio di proporzionalità. Profili di teoria generale e analisi sistematica, Torino: Giappichelli. Craig, Paul. 1983. Administrative Law, London: Sweet and Maxwell. Craig, Paul. 2012. Administrative Law, London: Sweet & Maxwell. Craig, Paul. 2015. UK, EU and Global Administrative Law. Foundations and Challenges, Cambridge: Cambridge University Press. Cranston, Ross. 1985. Legal Foundations of the Welfare State, London: Weidenfeld and Nicolson. Daintith, Terence. 1989. ‘The Executive Power Today: Bargaining and Economic Control’, in Jowell, Jeffrey and Oliver, Dawn (eds), The Changing Constitution, Oxford: Clarendon Press. D’Alberti, Marco. 1981. Le concessioni amministrative. Aspetti della contrattualità delle pubbliche amministrazioni, Napoli: Jovene. D’Alberti, Marco. 1990. ‘La giurisprudenza amministrativa degli anni Trenta,’ in Materiali per una storia della cultura giuridica. D’Alberti, Marco. 1992. Diritto amministrativo comparato, Bologna: Il Mulino. D’Alberti, Marco. 2013. Lezioni di diritto amministrativo, Torino: Giappichelli. D’Alberti, Marco. 2014. ‘Peripezie della proporzionalità,’ in Rivista italiana per le scienze giuridiche, numero speciale ‘I principi nell’esperienza giuridica,’ 279. Dicey, Albert Venn. 1979 [1885]. An Introduction to the Study of the Law of the Constitution, London: Macmillan. Emiliou, Nicholas. 1996. The Principle of Proportionality in European Law. A Comparative Study, London: Kluwer Law International. Funk, William. 1997. ‘Bargaining Toward the New Millennium: Regulatory Negotiation and the Subversion of the Public Interest,’ Duke Law Journal, 46: 1351–88. Galetta, Diana Urania. 1998. Principio di proporzionalità e sindacato giurisdizionale nel diritto amministrativo, Milano: Giuffrè. García de Enterría, Eduardo, and Tomás-Rámon Fernández. 1989. Curso de derecho administrativo, I, Madrid: Civitas. Garner, James W. 1924. ‘French Administrative Law,’ Yale Law Journal, 33: 597–627. Gaudemet, Yves. 2012. Droit administratif, Paris: Dalloz. Giannini, Massimo Severo. 1993. Diritto amministrativo, I, Milano: Giuffrè. Giannini, Massimo Severo. 1986. Il pubblico potere. Stati e amministrazioni pubbliche, Bologna: Il Mulino. Goodnow, Frank J. 1893. Comparative Administrative Law, New York: G.P. Putnam’s Sons. Goodnow, Frank J. 1905. The Principles of the Administrative Law of the United States, New York: G.P. Putnam’s Sons. Gorla, Gino. 1981. ‘Unificazione legislativa e unificazione giurisprudenziale,’ in Gorla, Diritto comparato e diritto comune europeo, Milano: Giuffrè. Jackson, Paul. 1979. Natural Justice, London: Sweet and Maxwell. Kingsbury, Benedict, Nico Krisch and Richard B. Stewart. 2005. ‘The Emergence of Global Administrative Law,’ Law and Contemporary Problems, 68: 15–61. Lahaye de Cormenin, Louis-Marie de. 1822. Questions de droit administratif, Paris: Ridler. Laski, Harold Joseph. 1919. ‘The Responsibility of the State in England,’ Harvard Law Review, 32: 447–72. Laubadère, André de. 1980. Traité de droit administratif, I, Paris: L.G.D.J. Macarel, Louis Antoine. 1844. Cours de droit administratif, I, Paris: Thorel. Maitland, Frederick. 1979 [1888]. The Constitutional History of England, Cambridge: Cambridge University Press.

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118  Comparative administrative law Manna, Giovanni. 1840. Il diritto amministrativo del Regno delle Due Sicilie, I, Napoli: Insegna di Dante. Mannori, Luca and Sordi, Bernardo. 2001. Storia del diritto amministrativo, Roma-Bari: Laterza. Mashaw, Jerry L. 1985. Due Process in the Administrative State, New Haven: Yale University Press. Mashaw, Jerry L. 2012. Creating the Administrative Constitution. The Lost One Hundred Years of American Administrative Law, New Haven: Yale University Press. Mattarella, Bernardo Giorgio. 2000. L’imperatività del provvedimento amministrativo, Padova: CEDAM. Maurer, Helmut. 1994. Droit administratif allemand, Paris: L.G.D.J. Mazzarelli, Valeria. 1979. Le convenzioni urbanistiche, Bologna: Il Mulino. Mestre, Jean-Louis. 1985. Introduction historique au droit administratif français, Paris: PUF. Napolitano, Giulio. 2003. Pubblico e privato nel diritto amministrativo, Milano: Giuffrè. Nigro, Mario. 1976. Giustizia amministrativa, Bologna: Il Mulino. O’ Connor, James. 2009 [1973]. The Fiscal Crisis of the State, New Brunswick: Transaction Publishers. Orlando, Vittorio Emanuele. 1954 [1889]. ‘I criteri tecnici per la ricostruzione giuridica del diritto pubblico,’ in Orlando, Diritto pubblico generale, Milano: Giuffrè. Plessix, Benoit. 2003. L’utilisation du droit civil dans l’élaboration du droit administratif, Paris: L.G.D.J. Portiez de l’Oise, Louis. 1808. Cours de législation administrative, 2 vols, Paris: Garnery. Romagnosi, Gian Domenico. 1814. Instituzioni di diritto amministrativo, Milano: Stamperia Malatesta. Romagnosi, Gian Domenico. 1835 [1814]. Principj fondamentali di diritto amministrativo onde tesserne le instituzioni, Prato: Stamperia Guasti. Sandulli, Aldo. 1998. La proporzionalità dell’azione amministrativa, Padova: CEDAM. Sandulli, Aldo. 2009. Costruire lo Stato, Milano: Giuffrè. Schwartz, Bernard. 1954. French Administrative Law and the Common Law World, New York: New York University Press. Schwartz, Bernard. 1976. Administrative Law, Boston: Little, Brown and Company. Schwartz, Bernard and Wade, William. 1972. Legal Control of Government: Administrative Law in Britain and the United States, Oxford: Clarendon Press. Schwartze, Jurgen. 1992. European Administrative Law, London: Sweet & Maxwell. Stiglitz, Joseph. 2002. Globalization and Its Discontents, London: Penguin. Strauss, Peter L. 2002. Administrative Justice in the United States, Durham: Carolina Academic Press. Tocqueville, Alexis de. 1988 [1856]. L’ancien régime et la révolution, Paris: Flammarion. Tosato, Gian Luigi. 2014. ‘Appunti in tema di economia sociale di mercato,’ in Scritti in onore di Giuseppe Tesauro, III, Napoli: Editoriale Scientifica. Travi, Aldo. 2014. Lezioni di giustizia amministrativa, Torino: Giappichelli. Turpin, Colin. 1989. Government Procurement and Contracts, Harlow: Longman. Vivien, Alexandre-François. 1845. Etudes administratives, Paris: Librairie Guillaumin. Wade, William. 1988. Administrative Law, Oxford: Clarendon Press.

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8.  Hungary’s post-socialist administrative law regimes Kriszta Kovács and Kim Lane Scheppele

Hungary has experienced two major regime changes in the last 25 years, each associated with a transition in the system of judicial oversight of administration. The first regime change is well known. After 1989, Hungary began the transition from a centralized Soviet-style government to a constitutional-democratic state. Culminating in Hungary’s accession to the European Union in 2004, the transition was widely judged a success, and Hungary joined the list of unproblematic countries with a constitutionally guaranteed system of the rule of law. Hungary’s second transition started in 2010. The Fidesz-Christian Democratic government elected in 2010 won two-thirds of the seats in the Hungarian Parliament, which gave it the power to change the constitution at will. One year into its term, the governing coalition introduced and passed a new constitution with only the votes of its own MPs. The new constitutional order has rapidly deconstructed virtually all of the checks on executive power that the first democratic constitution had managed to install. Seven years into the changes, it has become clear that this second transition is as significant as the first. But instead of moving from an illiberal to a liberal legal order, this second transition has moved in the opposite direction. Because Hungary is a Member State of the EU, it must retain some judicial review of administrative decisions, at least for those subject areas in which the Hungarian law is subsidiary to EU law. But this has created a two-track process in which administrative rights have one meaning when the lawmaker is in Brussels and a different meaning when the lawmaker is in Budapest. And so to the tale of two transitions.

1. THE FIRST TRANSITION: FROM SOCIALIST TO POSTSOCIALIST PUBLIC LAW 1.1  The Soviet Model, From Beginning to End Hungary’s first written constitution dates to 1949, when the Soviet-dominated government set up a state apparatus virtually identical to the one already existing in the Soviet Union. The 1949 Constitution featured an ornamental Parliament typical of the Soviet style of governance. Daily governance was entrusted to a Council of Ministers, which had all effective power of administration, including the power to issue decrees with legal force, the power to create administrative agencies, and the power to place any branch of state administration under its direct control.1 Hungarian public law was largely constituted by

  Hungarian Constitution 1949, Arts. 22–8.

1

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120  Comparative administrative law decrees issued by the Council of Ministers despite the formal textual prominence of the National Assembly. Although a decree of the Council of Ministers was not constitutionally permitted to conflict with the Constitution itself or with acts of Parliament, this proved to be not much of an obstacle. With a thin document containing barely ten pages of text in 71 articles, the Hungarian Constitution of 1949 set few limits. And because Parliament passed so few laws, statutes rarely constrained the Council of Ministers either. This general absence of higher law meant that decrees could and typically did emerge in the absence of any statutory or higher law authorization. The Constitution did not require any such thing, and the Council of Ministers did not seek it. In the aftermath of perestroika, constitutional reform became possible throughout the Soviet-dominated region. The Hungarian National Roundtable started in June 1989 and concluded on 23 October 1989 with the adoption of wholesale amendments to the existing constitution. Two weeks before the fall of the Berlin Wall, then, Hungary had already laid the groundwork for a new liberal state. The new amendments created a new Constitutional Court that opened for business on 1 January 1990. In May 1990, more constitutional reforms created both the position of a Prime Minister and ministerial government on a parliamentary model,2 abolishing the old Council of Ministers. With a strengthened Parliament and a strong Constitutional Court, administration began to be brought under legislation and under the Constitution. The Constitutional Court was to play a central role in the revision of the legal system to meet new constitutional-democratic standards. With the creation of actio popularis jurisdiction, in which anyone could challenge the constitutionality of legal norms before the Court without having to demonstrate a legally protected interest, the Court started almost immediately to change the legal system root and branch based on the petitions from ordinary citizens. 1.2  Post-Soviet Administrative Governance in Hungary The new Constitutional Court wasted no time in dismantling the remnants of the system of Soviet governance. Soviet administrative law was a particular target for the new Court. In particular, the new Constitution Court established that decrees had to be subordinated to authorizing legislation passed by the full Parliament. Parliament was also required to provide guidance on the concrete meaning of fundamental rights through statutes rather than leaving the matter to decrees as long as Parliament did not limit the core elements of any fundamental right.3 Under the 1990 constitutional amendments, an individual minister was no longer permitted to issue decrees without explicit authorization from a statute or a prior government-level decree, a move that stopped the proliferation of autonomous ministerial decrees.4 When concrete instances of Soviet-era regulation were brought before the Constitutional Court, the Court quickly deployed these constitutional provisions and required that decrees affecting fundamental rights be rewritten as statutes if they were to survive con-

  Hungarian Constitution 1989, as amended May 1990, Ch. VII.   Hungarian Constitution 1989, as amended June 1990, Art. 8(2). 4   Hungarian Constitution 1989, as amended 1990, Art. 37(3). 2 3

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Hungary’s post-socialist administrative law regimes  121 stitutional review. The most famous example involved abortion. The socialist-era health ministry regulations permitted abortion without restriction during the first 12 weeks of pregnancy. Because, in the view of the Court, the constitutional rights of women and perhaps also of the fetus were at stake, the Court demanded that the Parliament pass a statute on the subject.5 Because Soviet governance had consisted largely of decrees unattached to any legislative mandate, the Constitutional Court understood that requiring all regulations to be rewritten as statutes would place an enormous burden on the Parliament. Many legal gaps would be created while such a comprehensive revision was going on. Instead, in its abortion decision, the Court drew a line between those regulations that affected constitutionally protected fundamental rights in direct ways (which had to be rewritten) and those whose impact on rights was more remote (which did not). Even with these limits, the Court required Parliament to legislate in many new areas. The 1989 Constitution contained the general right of judicial review of certain administrative decisions (Art. 50(2)), and Constitutional Court Decision 32/1990 required the extension of judicial review to all administrative acts. The subsequently adopted Act XXVI/1991 advanced administrative review by entrenching the right of those whose legal interest was directly affected by an administrative decision to challenge that decision, but certain cases were still excluded. The statute limited judicial review only to decisions on the merits and even those decisions could be challenged only to determine whether they were ultra vires. The interim and procedural decisions of agencies were therefore not included in the right to judicial review of agency decision-making. At first, administrative procedure was not subject to much scrutiny by the Court. Here, oddly enough, Hungary was governed far into the post-socialist period by a socialist-era statute that regulated both the making and review of administrative decisions: the General Rules of Administrative Procedure, first enacted in 1957 and substantially amended in 1981.6 In practice, however, this law never functioned as a general administrative pro­ cedure act because each ministry had its own separate rules and, in Hungarian administrative law, specialized norms superceded general ones. As a result, administrative law was widely considered to be ‘a jungle’ (Küpper, 2007, 111). It was not until 2004 that the country got its first new general law on the procedural review of administrative decisions7 and not until 20068 that decision-making procedures were at least partially standardized across ministries. That said, the Constitutional Court did attempt to impose some general constitutional norms both on the process for individual adjudication and on the rules within each ministry. For example, the Constitutional Court limited the extensive power of the p ­ rosecutor’s office to supervise state administration, a power inherited from the socialist regime. The Court annulled part – but not all – of the system through which the Chief Public Prosecutor could lodge an extraordinary appeal against any final court decision in the area 5   Hungarian Constitutional Court (HCC) Decision 64/1991: On the Regulation of Abortion, 1991. 6   Hungarian Act IV/1957, as amended 1981. 7   Hungarian Act CXL/2004. 8   Hungarian Act LVII/2006.

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122  Comparative administrative law of administrative law, if he deemed the decision to be unfounded or unlawful.9 Though the Court required the Parliament to legislate to fill the gaps concerning this legal institution by limiting the remaining appeals to a particular time frame,10 the Constitutional Court never completely eliminated the ability of the prosecutor to intervene in administrative procedure. Some small amount of Soviet administrative practice therefore remained in the system and, as we will see, the prosecutor’s role was enlarged again after 2010. The Court began to look more systematically at administrative procedure in the late 1990s. In a 1997 case,11 the Court further pushed along administrative law reform when it reviewed the procedures of the Hungarian Medical Association (HMA), a state licensing body. The HMA could suspend the license of any doctor without giving any reason and the affected doctor had no legal right of redress. The Court found a violation of both the domestic constitutional guarantee of fair procedure and the similar guarantee under Article 6 of the European Convention of Human Rights. As a result, the Court required that the decisions of the HMA be judicially reviewable. The standards for this review gave the agency no deference: Supervising the legality of the decisions of public administration . . . cannot be limited constitutionally to reviewing only the formal legality of decisions of this kind. In an action for judicial review of an administrative decision, the court is not bound by the facts of the case as determined by the public administrative body; further the court can also review the legality of administrative discretion.12

While this announcement of de novo review of facts may have sounded revolutionary, a 1999 amendment to the 1952 Civil Procedure Code also said that judges should not defer to agency judgment on matters of fact when reviewing their decisions but it had never been followed. In the Soviet time – and even after the Constitutional Court decision and the Civil Procedure Code change reaffirming this power – courts deferred anyway. The new law did not change this. The Constitutional Court decision on medical licenses extended judicial review to cases involving administrative discretion and required that relevant statutes contain standards that would allow the ordinary courts to effectively review the legality of administrative decisions. However, neither the judiciary nor the legislature were fully prepared for such an extension of judicial supervision (Fazekas 2007, 130) and none of these practices was ever written into new statutes or ever caught on as practical reality among judges. Under the influence of the European Union, which Hungary joined in 2004, a more substantial statutory revision of administrative procedure occurred. The Act on the General Rules of Public Administrative Procedures and Services of 2004,13 explicitly said in its preamble that it aspired to comply with EU norms by creating a uniform set of procedures that allow the ‘clients’ of the state to participate in decisions affecting them, to receive information from administrative agencies relevant to these decisions, and to have a timely review under legally regulated procedures of all decisions, including judicial     11   12   13    9 10

HCC Decision 9/1992: On the Protest of Illegality. HCC Decision 2/2000: On the Time Limit for Prosecutor’s Protest. HCC Decision 39/1997: On the Judicial Review of Administrative Decisions. HCC Decision 39/1997, 368. Hungarian Act CXL/2004.

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Hungary’s post-socialist administrative law regimes  123 review not only of final agency determinations but also of procedural orders. The Act also provided that if the Constitutional Court voided a regulation of an agency, that agency must then review all cases that had been decided under that regulation to determine if its prior decisions should be changed.14 With this new law, the focus of the Constitutional Court shifted to the examination of fair procedure in the review of agency decisions. In a decision of the Constitutional Court on the subject of the required vaccination of children,15 the Court was called upon to rule on the constitutionality of compulsory vaccination, as well as on whether the health authorities could order a child to be vaccinated before the judicial review of the decision to vaccinate was completed in cases where the parents objected. The Court engaged in proportionality analysis to determine whether statute passed constitutional muster and found it did. But the Court then went on to find a legislative omission in the remedies section of the law because the Parliament had failed to provide for delaying a vaccination if the parents challenged the decision. The law specified that health authorities could order the child be vaccinated immediately, but that very act would make it impossible for the parents to get the remedy they sought if they won their case. The procedure, therefore, could not be fair. The Court consequently ordered the Parliament to change the law so that a vaccination would not be performed when a judicial challenge to that vaccination was pending. After the end of socialism, then, both statutory reform and Constitutional Court extended judicial review of administrative decisions. But the promise of vigorous review of administrative decisions was more theoretical than real. Hungary therefore went into its second post-socialist transition without a robust system of actual judicial review of agency decisions firmly in place.

2.  THE SECOND TRANSITION: HUNGARY AFTER 2010 A combination of domestic political scandals, collapsing state finances and a global economic crisis that pushed Hungary into an IMF bailout made the electorate ready for a change in 2010. That year, the Fidesz-Christian Democratic coalition gained a supermajority of parliamentary seats, opening the way for a profound shift in direction even though the parties did not campaign on a platform of constitutional reform. The lightly entrenched 1989 Constitution could be amended by a single two-thirds vote of the Parliament, and the new government had 68 per cent of the seats. In 2010–11, the governing coalition adopted a range of amendments to the 1989 Constitution. Shortly afterwards, a wholesale constitutional review occurred (Kovács and Tóth 2011, 186–96), and in 2011 a new constitution, renamed the Fundamental Law, was adopted. The Fundamental Law was not the result of compromise among various political actors in and out of government, but was instead the sole idea of the governing parties, drafted out of sight of the public, of the opposition or even of the governing parties’ parliamentary fraction. According to the government, the Fundamental Law

  Hungarian Act CXL/2004: Sec. 117.   HCC Decision 39/2007: On Compulsory Vaccination.

14 15

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124  Comparative administrative law was there to provide a ‘foundation for the spiritual and intellectual renewal of Hungary’ (Navracsics 2011). 2.1  The Main Features of the Fundamental Law The new Fundamental Law passed in 2011 took effect on 1 January 2012. It can be described as a ‘façade’ constitution (Sartori 1962, 861), which has the appearance of a true constitution, but gives no reliable information on how governing really occurs. Prime Minister Viktor Orbán openly claimed that Hungary had now joined the circle of ‘illiberal states’ (Orbán 2014). The Fundamental Law breaks with the spirit that guided the 1989 Constitution. It fails to protect liberal constitutional principles, such as republican government, democracy, human rights, and rule of law (Tóth 2012). Under the 1989 Constitution, the rule of law required that no one be above the law. In Hungary, the situation has now changed: the holders of power are able to elevate any decision to the status of law quickly and without hindrance because they have removed all checks on their law-making power, until recently up to and including constitutional amendments (Kornai 2015, 4). As in the Soviet time, law has become instrumentalised, to be brought into line with decisions of the government rather than constraining in advance how officials operate. The outward appearance of the state’s basic structure is maintained by the Fundamental Law, but this conceals a less creditable reality. In practice, the Fundamental Law aims at consolidating the power of the ruling parliamentary majority and restricts the competitive political process. In the new system of government, a two-thirds parliamentary majority is the supreme and constitutionally unlimited organ of state power because a single two-thirds vote can amend the constitution. Previously, the judiciary, the ombuds-system and the Constitutional Court were the institutions that served as checks on the power of governmental majorities. The Fundamental Law transformed all these checks, starting with the consolidation of the four ombuds offices into one office with a smaller staff and then permitting the governing coalition to capture both the Constitutional Court and the ordinary judiciary. The new system of government has affected the independence and the competences of the Constitutional Court. First, the nomination rules for the justices of the Constitutional Court and the election rules for the Court’s president were changed. Since 2010, Constitutional Court judges have been nominated by a parliamentary committee that the governing party dominates.16 Later, through another constitutional amendment, the parliamentary majority enlarged the Constitutional Court’s membership from 11 to 15, so the government could pack the Court with judges of its own selection.17 By spring 2013, the Constitutional Court was effectively neutralized as a check on government; today’s Court consists exclusively of justices nominated and elected by the governing majority. In addition to these structural changes, the competencies of the Constitutional Court were restricted so that the Court can no longer review the constitutionality of certain

16 17

  Constitutional Amendment of 5 July 2010.   Hungarian Act LXI/2011 on the Amendment of the Constitution of Hungary.

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Hungary’s post-socialist administrative law regimes  125 financial measures,18 and the Fourth Amendment to the new Fundamental Law put directly into the constitution nearly all of the laws that the previously independent Constitutional Court had found unconstitutional. The Fourth Amendment also nullified the entire jurisprudence of the Constitutional Court from 1990–2011, so none of the decisions of the Court before the enactment of this new constitution can be relied on as legal authority, including all of the Court’s prior decisions about administrative law. While the Fundamental Law formally retained the Constitutional Court on paper, the changes in its functioning were considerable in practice. The Fundamental Law abolished the actio popularis petition and shifted the focus of constitutional review from examining legislative and executive decisions to reviewing almost exclusively court decisions through the adoption of a modified form of the German constitutional complaint mechanism. The Court now, practically speaking, reviews only judicial decisions about laws and not the underlying legal acts themselves, which means that the Court cannot review regulations and executive branch decisions that produce no judicial decisions. The new system limits the administrative measures that can possibly produce judicial decisions, which then means that the Constitutional Court’s jurisdiction is also limited. The ordinary judiciary itself also went through substantial changes in the new constitutional order after 2010. A unique system of judicial administration was introduced through the creation of a new National Judicial Office. Its president, who is not herself part of the judiciary, has the power to exercise the ‘central responsibilities of the administration of the courts’.19 This lone official is, therefore, the ‘crucial decision-maker in practically every aspect of the organization of the judicial system’ (Venice Commission 2012a, para. 118). The president, elected by the parliamentary supermajority, has nearly complete discretionary power to appoint judges and court leaders. She also has the power to promote, demote, reassign, discipline and fire any judge. Such a system exists in no other European country and, according to the Venice Commission, it threatens the independence of the judiciary (Venice Commission 2012a, para. 117). Although a so-called National Judicial Council composed of judges is also part of the system, it has scarcely any significant powers and plays only a negligible role in the administration of the judiciary. Given the new system, judges cannot enjoy true autonomy and independence from the National Judicial Office. Before the creation of this office, the judiciary was self-governing, but the new constitutional order sharply curtailed this capacity. This reorganization of the judiciary and the Constitutional Court had an impact on the judicial review of administration. In 2011 the government began considering the idea of establishing a separate system of administrative courts. A preparatory committee was established by Governmental Resolution 1011/2015, which in early 2016 published the draft of the new statute on public administration. First, we will explain how the current administrative court system operates and then we will assess what the new law says about the future administrative court system.20 Finally, we will return to the evaluation of the system administrative review.   Fundamental Law, Art. 37(4).   Fundamental Law, Art. 25(5). 20   In December 2016 Parliament adopted the Act CL/2016 on Administrative Procedure and another Act on Administrative Court Procedure. The latter was referred to the Constitutional Court for a preliminary review by the President of Hungary. In its Decision 1/2017 (I. 17.) the court 18 19

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126  Comparative administrative law As of this writing, there are no separate administrative courts in Hungary, and administrative adjudication remains within the ordinary court system, though in separate administrative chambers. The creation of the currently operating administrative chambers within the general courts is recent; it occurred only after the president of the new National Judicial Office had gained substantial control over the careers of individual judges. As a result, the appointments of all judges to these new administrative chambers have been made by one person, deciding alone with no check on her judgment. The European Commission for Democracy through Law (the Venice Commission) and the International Bar Association were very critical of the outsize powers of the president of the National Judicial Office to reassign judges in this way,21 but so far little attention has been drawn to the effects of these reassignments on the operation of administrative justice in particular. 2.2  Administrative Judicial Review under the Fundamental Law: Overview Administrative decisions in Hungary are first adjudicated within each agency. In most agencies, the initial decisions may be appealed to a second-stage process within the agency and can only be appealed out to the ordinary judiciary after this second agency review. Once in the general court system, however, there is no appeal from the first-instance court decision to the regional Court of Appeals or to the Kúria, Hungary’s newly renamed supreme court. For most of Hungarian administrative law, there is now only one chance for review in the ordinary courts. As we show later, there is also only limited access to the Constitutional Court. In some agencies operating at national level, however, judicial review is organized differently. In regulatory bodies with autonomous status, like the Hungarian Competition Authority, Hungarian National Bank, Hungarian Public Procurement Authority, the National Media and Info-communications Authority, Hungarian Energy and Public Utility Regulatory Authority, Equal Treatment Authority, Hungarian National Authority for Data Protection and Freedom of Information, National Election Office and the Hungarian Financial Supervisory Authority, there is only a single level of administrative process within the relevant agency, before a case can proceed to the general judiciary for review. In these cases there is both a first-instance and second-instance appeals process available in the ordinary courts. As it turns out, the only bodies that follow this second track are those which are governed directly by European Union law or under the shadow of other external standards (like the National Election Office whose actions are monitored at election time by the

declared the Act unconstitutional mostly for formal reasons. The Act created a new administrative top court and mandated the Budapest-Capital Regional Court to act as a new administrative high court. Its jurisdiction included not only standard review of administration but also included the power to review the resolutions of the National Election Commission and the National Media and Info-communications Authority. The court held that setting up an administrative high court and assigning it this jurisdiction should have required the votes of the two-thirds of MPs instead of the simple majority that the law had gathered. In February 2017 Parliament adopted Act I/2017 on Administrative Court Procedure without the contested provisions. Both statutes are expected to enter into force on January 1, 2018. 21   International Bar Association 2012, 2015; Venice Commission 2012a, 2012c, 2013.

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Hungary’s post-socialist administrative law regimes  127 Organization for Security and Cooperation in Europe). This might lead observers to believe that the Hungarian government is presently providing robust judicial review of agency decisions only when required to do so by external authorities. In these cases all requests for judicial review of agency decisions take a prescribed track through specific courts. They must first go to the Metropolitan Court in Budapest, followed by an appeal to the Administrative Chamber of the Kúria, both courts where the key leaders and all of the judges in the administrative chambers were named as a first priority by the president of the National Judicial Office. Cases from these EU-law-governed administrative bodies can go to no other courts in the country. There are presently two tracks of administrative procedure in Hungary: one dealing with core EU law matters and the other dealing with domestic administration. In general, judicial review of agency decision-making is considered normatively desir­ able because the judiciary is independent from the executive branch and therefore provides a neutral check. Currently, the new system of judicial administration in Hungary fails to guarantee the independence of the judiciary.22 Therefore, even in these cases where there are two levels of judicial review within the general court system, it cannot be stated unequivocally that agency decisions are subject to independent review. All of the judges assigned to these new administrative chambers were picked by a political official close to the governing party and any judge assigned to these chambers can be removed by the same political official at her discretion. The recently adopted statute on administrative reform further endangers the independent review of public administration. Under the law, eight specialized administrative regional centres within the general judiciary will have jurisdiction over administrative cases. In addition to these eight centres 20 regional courts will apparently be tasked with a whole range of politically sensitive cases. They will have the sole jurisdiction to rule in appeals against the administrative decisions of those public bodies that are supposed to be most independent of the government, like the the Hungarian National Bank or the Hungarian Academy of Sciences. In these cases, politically aligned judicial review could reverse decisions that the government was otherwise not able to influence. The regional courts will also have unusual jurisdiction in two types of individual rights cases with political implications: ‘right to assembly’ cases and freedom of information cases.23 These regional courts will also hear appeals against the decisions of the county governments. Having just a few years ago established administrative chambers within the ordinary courts, the government is now changing the system again, giving the present crop of administrative judges good reason to believe that they will soon be reassigned. 2.3  Administrative Judicial Review of Individual Acts of Public Authorities Article XXVIII(7) of the new Fundamental Law reads that ‘everyone shall have the right to seek legal remedy against any court, authority or other administrative decision which violates his or her rights or legitimate interests’. From simply reading the constitution, one

  Venice Commission 2013: paras 66–75.   Hungarian Act I/2017 on Administrative Court Procedure: Sec. 12.

22 23

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128  Comparative administrative law might conclude that judicial review is available against every (normative and individual) administrative decision. A full-scale judicial review of administrative decisions would mean that the court is concerned with the legality of normative and individual acts of public administration, with the principled decision-making of public authorities as well as the constitutionality of the acts of the public authorities. The court should be able to ensure that laws have been correctly interpreted, that discretion has been lawfully exercised and that the decision-maker has acted fairly (Barnett 2000, 1009). But the current Hungarian practice of administrative review falls short on a number of these principles. We consider review of legality, standing, administrative discretion, and fairness. 2.3.1 Legality Review for legality is an old structural problem of Hungarian administrative judicial review, going back to the socialist period and not corrected in the post-1989 constitutional order, that judicial review of administrative action means only a legality review over the public authorities’ decisions. The public authority’s conduct can be challenged as ultra vires or contrary to the law, but the scrutiny of the courts does not presently extend to de novo review of questions of fact. The Constitutional Court’s brief flirtation with a de novo review standard was never codified in all respects and ordinary judges never used it. Hungarian courts can now only examine whether an administrative decision complies with the relevant provisions of law and if the authority applied substantive and pro­ cedural rules appropriately. The courts do not substitute their judgment for that of the public authority on the assessment of evidence. And as a further restriction, the illegality of administrative decisions following from a breach of procedural provisions may only be established if that breach had an impact on the merits of the decision.24 This provides a very narrow scope of review of the decisions of administrative agencies. The narrowness of judicial review of agency action makes it difficult for Hungarian courts to exercise proportionality review (Kovacs and Varju 2015), as both the European Court of Human Rights (ECtHR) and the Court of Justice of the European Union (CJEU) require. In proportionality review, courts must assess whether state action engages in impermissible infringement of legally protected rights and interests by examining whether the state action is necessary to achieve a legitimate state purpose and is the least intrusive action that can accomplish that purpose. If a court may not revisit the factual determinations to assess whether there might have been other ways to accomplish the purpose with less intrusive means, then it cannot fully engage in proportionality review. And although as a general rule courts are not bound by the facts established by other authorities, courts must take at face value all of the assessments of fact made by administrative agencies unless those facts are patently not substantiated by evidence provided by the agency.25 2.3.2 Standing Standing to challenge agency decisions in court is also highly restricted so that ‘although the individual may have a right of access to judicial review, he or she may not have stand-

24 25

  Hungarian Act III/1952 on the Code of Civil Procedure: Sec. 339(1).   Hungarian Act III/1952 on the Code of Civil Procedure: Sections 4, 336/A, 339/B.

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Hungary’s post-socialist administrative law regimes  129 ing in judicial review in all matters raised’ (Kovacs and Varju 2015, 5). In a claim for judicial review, a party may only raise matters of administrative illegality that directly violate her rights or legally protected interests. According to the standing provisions of Article XXVIII(7) of the Fundamental Law and Section 3(1) of the Code on Civil Procedure and Section 20 of the Act on Administrative Court Procedure, the applicant must have a legal interest at stake in bringing an application for judicial review. By requiring a legal interest in the matter under review, administrative chambers do not recognize purely economic interests of parties. As a result, even the interests of competitors in competition cases are not considered direct legitimate interests capable of securing standing in judicial review. Only the specific company charged with breaching competition law has standing to appeal the case to a court, not any of the other competitors whose livelihoods may be affected by the decision (Kovacs and Varju 2015, 20). The practice of Hungarian courts in the interpretation of standing rules has been trad­ itionally restrictive. The restrictions are well known in environmental cases; for example, environmental NGOs were denied standing in cases concerning hunting licenses because they were not themselves the hunters. It took a major business case to challenge in a forceful way this limitation of standing to those who are directly affected by a regulatory ruling and to create a carve-out for matters of EU law. In a case that the Kúria referred to the CJEU, a major gas operator in Hungary attempted to appeal a decision of the energy regulator setting the amounts and prices of the flow of gas into Hungary in a negotiation with the state owner of the gas pipelines. Because of the administrative decision, the operator’s business became unprofitable. But Hungarian law did not permit the private gas pipeline operator to lodge a complaint against the regulatory agency’s decision given that only the foreign gas supplier was the direct subject of the regulation, not the domestic energy provider who received the gas at the border and distributed it to consumers through the pipeline. E.ON, the company involved, found it could no longer do business profitably in the country after its Hungarian legal appeal was rejected so it sold its gas pipeline operation and storage business to the state-run electricity company. Nearly two years later, the CJEU found that, under European law, the domestic gas operator had a right to judicial review of the agency decision because of his economic interest in the decision.26 In cases involving EU law, then, parties with economic interests whose administrative rights are established by substantive EU law must have standing before the Hungarian courts. But the CJEU ruling only applies where EU law specifically confers such standing on a party. As Advocate General Cruz Villalon opined in the E.ON case, in national law ‘[i]t is legitimate for the Member States to ensure judicial review of the actions of the administrative authorities for those individuals and groups directly affected by certain public decisions, while other Member States may opt for more open systems’.27 In short, EU law standards cannot reach domestic administrative procedure. Hungary now has a two-tiered system of standing in administrative cases, one for EU-law matters where the economic impact of regulatory decisions may qualify a party for standing before

  Case C-501/13 (2014) para. 51.   Ibid., para. 53.

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130  Comparative administrative law the Hungarian courts, and another for purely domestic law matters in which only those directly affected by a regulatory decision can bring a case before the Hungarian courts. 2.3.3  Discretionary power The scope of judicial review of agency action in Hungary is further restricted by the fact that judicial review does not extend to the abuse of discretionary powers of administrative authorities. Hungarian courts may not intervene in matters decided within the purview of this discretion. Abuse of discretion may be raised in the appeal to the second-instance administrative authority, but may not be raised in judicial review outside the agency. A rule of law approach would require judicial review of all administrative decisions, including those containing discretionary elements, where legally irrelevant or forbidden considerations (for instance discriminatory intent) may have influenced the decision (Jaffe 1965, 181). Exercising discretion for an improper purpose or without taking into account all relevant considerations may cause unlawfulness of the given administrative decision (Bradley and Ewing 1997, 773). But the Hungarian courts may not intervene in these cases. Unfortunately, Hungarian administrative law contains many provisions giving discretionary authority to administrative agencies. Discretionary authority is presumed to exist in Hungarian law when concepts like ‘unfair’, ‘relevant’ or ‘rational’ are used in delegation of authority to agencies, as these terms place within agency purview the task of determining the relevant standards. As we have seen, assessments of evidence are also within the discretionary purview of agencies, subject only to the evidence-law standard that relevant information be taken into account and that conclusions drawn from such evidence must be reasonable. But the principles for judicial review of agency decisions explicitly say that courts may not substitute their judgment for that of the agency, neither with regard to the substantive meanings of the discretionary standards (like ‘unfair’ or ‘rational’) nor with regard to the assessment of evidence unless those determinations are ‘manifestly ­unreasonable’ and have an impact on the merits of the case (Kovacs and Varju 2015, n. 24). The decision made in the discretion of an agency should be considered to be lawful if the agency appropriately explored the facts of the case, complied with the procedural rules and the reasoning of the decision demonstrates that the available evidence was considered in a reasonable manner.28 2.3.4  Fair administration Article XXIV (1) of the Fundamental Law stipulates that ‘everyone shall have the right to have his or her affairs handled impartially, fairly and within a reasonable time by the authorities. Authorities shall be obliged to give reasons for their decisions, as provided for by an Act’. As Kovacs and Varju rightly notice, the right to fair administration in the Hungarian constitution does not contain the requirement of independence (Kovacs and Varju 2015, 204). Hungarian administrative judicial review has concentrated on the manner in which decisions have been taken and on whether the decision-maker acted within the powers given. It has remained largely unconcerned with the merits of cases, or with the justice or 28

  Hungarian Act III/1952 on the Code of Civil Procedure: Sec. 339/B.

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Hungary’s post-socialist administrative law regimes  131 injustice of the rules applied. The scope of judicial review is very limited, and the relevant standing requirements are extremely restrictive. It is not clear whether the effective judicial control of the administrative actions that is promised in the Fundamental Law can be realized with these restrictions. Judicial review of administrative decisions does not include constitutional review, which remains within the sole competence of the Constitutional Court. We will next explore how constitutional review has also been limited under the new system. 2.4  The Constitutional Court’s Competence 2.4.1  Review of normative acts of public administration The Constitutional Court can supervise every normative legal act adopted by the ­executive – that is, by the government, by ministries and by the autonomous regulatory bodies. However, since the abolition of actio popularis review in 2012, it is no longer possible for just anyone to turn to the Constitutional Court to ask for this review. There are now only three ways that laws and normative acts can come before the Constitutional Court. First, certain identified parties may ask for abstract constitutional review. Only the government itself, one-fourth of the MPs, the President of the Kúria, the Prosecutor General or the Ombudsperson for Fundamental Rights can initiate this ­procedure.29 The government is unlikely to ask for review of its own legal acts, and the current President of the Kúria, the Prosecutor General and the Ombudsperson were all chosen by this government from among those friendly to their party. From this group, only the ombudsman has ever brought cases to the Constitutional Court and he has said that he only brings cases that he deems to be not ‘political’ (Sereg 2015). While the parliamentary opposition might be expected to bring abstract review cases, the current parliamentary opposition, one-third of the MPs, is divided almost equally between fragmented parties of the left and a party of the far right. Given this configuration, it has not generally been possible for one-quarter of the MPs to agree on constitutional challenges. Abstract review has therefore virtually disappeared. That said, the new jurisdiction of the Constitutional Court offers a second way to challenge laws before the Court. The new Fundamental Law permits constitutional complaints for the first time. In a constitutional complaint, an ordinary citizen can file a challenge to a law or administrative regulation or any other normative act by claiming an individual interest in the matter and demonstrating that she is personally affected by the application of the law in question.30 Under the prior actio popularis system, petitioners could go straight to the Constitutional Court with a challenge. Under the new system of constitutional complaints, petitioners must exhaust their legal remedies in the ordinary courts before filing such a complaint. Only if there is no ‘procedure for legal remedy designed to repair the violation of rights’ can a case proceed directly to the Constitutional Court.31 Despite this restrictive jurisdiction, the Constitutional Court argued in Decision

  Hungarian Act CLI/2011 on the Constitutional Court: Sec. 24(1).   Ibid.: Sec. 26(2). 31   Procedural Guidance 3227/2012. 29 30

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132  Comparative administrative law 33/2012 (before the Court was packed with allies of the governing coalition) that exhaustion of remedies is not an absolute requirement, since remedies are not always effective. For instance, even if the petitioner could bring a case, the Court’s procedure might be so restrictive that it does not have the capacity to remedy the substantive harm caused by the underlying agency decision and thus it cannot be regarded as an effective remedy. So, the Court ruled, filing a complaint under Section 26(2) may not necessarily be conditioned upon the requirement of exhausting all legal remedies, if there is no suitable way to cure the injury to the complainant’s right. After the Court had a working majority installed in office by this government, however, the Court reversed itself in Procedural Guidance 3182/2014. Now, administrative decisions cannot be subject to constitutional review unless there is a court decision for the Constitutional Court to examine. So even if judicial review is not suitable for curing the injury to the complainant’s rights because an effective remedy is not available, the ­complainant must still exhaust legal remedies before initiating constitutional review. The third possibility for bringing cases to the Constitutional Court is the judicial initiative. If a judge is bound to apply a legal rule that she perceives to be unconstitutional, the judge shall suspend the proceedings and submit a petition to the Constitutional Court.32 This has happened in many tax cases.33 In all these cases, the subject of judicial review is not the administrative action that embodied the direct violation of the fundamental right, but the legal norm (law, decree) on which it was based. This procedure may be effective for weeding out unconstitutional regulations but it does not begin to touch unconstitutional administrative decisions. The Constitutional Court may only review court decisions and normative acts for constitutionality, not the administrative decisions made under laws that are otherwise constitutional. 2.4.2  Review of individual administrative decisions Apparently, the Federal Constitutional Court of Germany served as the model in 2011 when the Hungarian government introduced constitutional complaints in the new Fundamental Law. The so-called full constitutional complaint, as it exists in Germany, includes all cases in which human rights are violated through the decisions of any state body (Venice Commission 2015). The Hungarian law and its interpretation do not correspond to their German counterparts, however. German constitutional complaints can challenge the decisions of the executive branch while the Hungarian constitutional complaints cannot. The German Constitutional Court has comprehensive authority to review the constitutionality of actions taken by all three branches, including the German administration. Any person may file a constitutional complaint challenging acts of state power taken by the German administration and the German government (Jaeger and Bross 2002, 178). Individuals can claim that their fundamental rights have been violated by any public authority, not just by courts.34 All measures of German direct and indirect state author-

  Hungarian Act on the Constitutional Court: Sec. 25(1).   For example, Decisions 2/2013, 9/2013. 34   German Basic Law: Art. 93(1)4a; German Act on the Federal Constitutional Court: Sec. 90(1). 32 33

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Hungary’s post-socialist administrative law regimes  133 ity fall under this concept, from expropriations to university course admissions (Jaeger and Bross 2002, 190). A complaint can also be directed against other acts or omissions of the state against which the recourse to a court is not possible. If a complaint against an administrative decision is verified, the German Federal Constitutional Court can quash the decision.35 In contrast, petitioners may only file constitutional complaints with the Hungarian Constitutional Court if they have been adversely affected by court decisions, not if they have been adversely affected by an agency decision or other act of executive power. Parties may submit constitutional complaints against court decisions regarding the merits of their cases or against court decisions terminating judicial proceedings that violate their constitutional rights, if all other legal remedies have been exhausted by the petitioner. Additionally, legal persons may file constitutional complaints if no possibility for legal remedy is available.36 But the review of administrative agency action at the constitutional level is limited to the review of court decisions that reviewed the administrative action. Since ordinary courts can only review the legality of administrative decisions, not the determinations of fact or the effects of the decisions on third parties who may be affected by the decisions, the Constitutional Court cannot review those things either. The Constitutional Court therefore has a large blind spot in reviewing the constitutionality of administration, as it has no jurisdiction to review executive branch actions as such, nor does it have the jurisdiction to review the actions of regulatory bodies. In Hungary now, administrative constitutional review is decidedly incomplete. The Constitutional Court’s power to supervise administrative decisions is weak but Act CLXIII of 2011 on the Prosecution Service now gives the prosecutor stronger powers over state administration, powers reminiscent of the Soviet period. For instance, the prosecutor ‘shall verify the legality of individual decisions made and administrative measures taken by administrative authorities and other bodies applying the law other than courts, whether binding or final, provided the courts have not overridden such decisions’.37 Although the Soviet-era prosecutor’s protest is not part of the legal system any longer, prosecutors are authorized to issue ‘reminders’ in any administrative procedure, after which ‘(t)he addressee of the reminder shall immediately terminate enforcement until the case is decided’.38 ‘If the reminder fails to have an effect, the prosecutor shall contest the administrative measure in court’.39 This power turns the prosecutor’s office into a general supervisory body of all the administrative actions of the state (Venice Commission 2012b, para. 39.) and turns the courts into a vehicle for the prosecutor to press his particular view of administration. In Hungary, the current public prosecutor is a close associate of the governing coalition. In the new system of Hungarian administrative review, therefore, judicial and constitutional review of administration are limited and prosecutorial review of administration is increased. One might be forgiven for thinking that a 180-degree turn in 1989 followed by a 180-degree turn in 2011 means that Hungary has now come full circle.     37   38   39   35 36

German Act on the Federal Constitutional Court: Sec. 95(2). Hungarian Act on the Constitutional Court: Sec. 27. Hungarian Act CLXIII/2011: Sec. 29(1). Ibid.: Sec. 29(3). Ibid.: Sec. 29(5).

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134  Comparative administrative law

CONCLUSION Judicial review embodies the application of the rule of law in a democratic society (Dicey 1959). Introducing judicial review of administrative decisions in Hungary was a long process. The 1989 constitutional revision created a constitutional-democratic society based upon the rule of law. While the constitution of 1989 stipulated that there should be judicial review of administrative decisions, it was a Constitutional Court decision that introduced administrative review into the Hungarian legal system. While the Constitutional Court attempted to expand judicial review, however, judicial and political practice did not follow. The system of Hungarian administrative judicial review therefore had structural problems from the very beginning of democratic governance in Hungary. The ability of the judiciary to control administration has always been partial. The courts should have been in the position to ensure that administrative decisions made on such grounds conformed to the law and principles of fair procedure (Bradley and Ewing 1997, 768), but the Hungarian system of administrative judicial review did not comply with these standards even before the new constitution of 2011. The new Fundamental Law has not fixed the errors or filled the significant long-standing voids that remained under the 1989 Constitution. On the contrary, it has exacerbated the problems. The new constitution itself falls short of guaranteeing basic constitutional principles such as the rule of law and limited government; it aims at solidifying the power of the ruling majority by weakening the system of checks and balances. The absence of checked power in the constitutional system as a whole has an impact on the judicial review of administrative action. Under the 1989 constitution, a strong Constitutional Court and an independent judiciary attempted to make up for the shortcomings of the positive law. Under the 2011 Fundamental Law, the shortcomings of administrative review are maintained, but the independence of the ordinary judiciary and the powers of Constitutional Court have been further weakened. The prior robust jurisdiction of the Constitutional Court has been slashed to the point where it can no longer reach these questions. In Hungary now, it is fair to say that executive action is subject to very little meaningful judicial control. At the same time, the power of the prosecution service in the area of general supervision of public administration has been strengthened. In 2015, Freedom House40 did something it had never done. It lowered Hungary’s status from a ‘consolidated democracy’ to a ‘semi-consolidated democracy’. The event was significant. Under the usual definitions, a consolidated democracy is understood as one in which there are no serious challenges to the existence of a liberal, constitutional, democratic rule of law state. In 2017, Freedom House noted that things had gotten even worse. It ranked Hungary for the first time as the least democratic government within the EU.41 Hungary’s move backwards is a sign that the consolidation of a constitutional democracy can unravel.

40   Freedom House: Nations in Transit 2015, Hungary https://freedomhouse.org/report/nationstran​sit/2015/hungary. 41   Freedom House: Nations in Transit 2017, Hungary, https://freedomhouse.org/report/nationstran​sit/2017/hungary.

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Hungary’s post-socialist administrative law regimes  135 For 20 years, Hungary moved along a path that transitional states were encouraged to traverse – gradually eradicating the traces of its socialist past and instituting liberal constitutionalism throughout the operation of government. It is a sobering experience to witness how quickly a consolidated order can disintegrate and a new regime remove legal limits on the power of executive authority. One might have thought that Hungary’s membership in the EU would have prevented this backsliding. But the influence of the EU has created, instead, a partition in Hungarian law. On the EU side of the partition, one finds some semblance of legal constraint on administration. But on the domestic side of the partition, the consolidation of power has little check. The EU has not buffered Hungary from lurching toward an illiberal state; it has simply protected its own law from suffering a similar fate.

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PART II ADMINISTRATIVE INDEPENDENCE

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9.  The promise of comparative administrative law: a constitutional perspective on independent agencies Daniel Halberstam*

1

The role of so-­called ‘independent administrative agencies’ in democratic governance, and the study of their practical importance and normative significance, are on the rise in many jurisdictions. In the United States, the administrative state never ceases to be the object of fresh critical scholarly discussion as well as practical efforts at reform. Within European states, such as England, France, and Germany, renewed attention is being given to the role of independent agencies (sometimes termed QUANGOS) in law enforcement, adjudication, and rulemaking – often in connection with European mandates of administration. At the supranational level of governance, the European Union itself has witnessed a dramatic explosion of agencies over the past decade as well. And at the international level writ large, the creation, migration, and enforcement of norms has increasingly taken place within an ever expanding network of agencies that challenge us to understand (or, better, question whether we should understand) global governance within the paradigm of administrative law as well. The United States, with its long tradition of independent agencies often serves as a point of reference in these discussions (for example, Geradin 2004). Although there is no general authoritative definition, such agencies are understood to operate somewhat separately from the executive branch structure and to be somewhat insulated from the executive branch hierarchy, often taking the form of a bipartisan body of Commissioners whom the President can remove only ‘for cause’ (Breger and Edles 2000: 1135–6). A foreign scholar should be warned, however, that there is continued debate in the United States not only about the precise extent of the President’s control over so-­called ‘independent agencies’ but also about the extent of the President’s control over their more ordinary ‘executive branch agency’ counterparts. This chapter reflects on the emergence of independent agencies as an institutional form of governance in the United States, Germany and France. Especially when compared with the United States, there are only a few such institutions in Germany. Aside from the Bundesbank, which is specifically authorized in the Grundgesetz (GG), there is the somewhat independent Bundeskartellamt (competition authority) and the recently added Bundesnetzagentur (Federal Network Agency) for the regulation of electricity, gas, tele­communications, postal services, and railroads. France, by contrast, has long had an abundance of independent agencies. Apart from the special case of the Banque de France,

*  I would like to thank Wolfgang Hoffmann-Riem, Ellen Katz, Gerard Marcou, Johannes Masing, Christoph Möllers, Nina Mendelson, Mathias Reimann, and the editors of this volume for valuable comments and discussions. Thanks also to the librarians both at the University of Michigan and at the Wissenschaftskolleg for their excellent assistance. All translations and errors are mine.

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140  Comparative administrative law which has lost much of its independent national regulatory power since the creation of the European Central Bank, there are over a dozen agencies expressly designated as independent by the legislature and many others that operate outside the hierarchy of the executive branch.1 Important for present purposes, however, are not the precise parallels – or lack thereof – between these various agencies, but the constitutional understanding of the role of these various institutions across these three systems. The case of independent regulatory agencies serves to illustrate what might be called a constitutional perspective of comparative administrative law. In this vein, the aim of this chapter is ultimately threefold. First, it seeks to ground the comparative administrative inquiry in an understanding of comparative constitutional law and, in particular, in an understanding of the constitutional values of public governance. Second, this chapter suggests that the turn to independent administrative agencies in the United States, Germany, and France reflects system-­specific inter-­institutional dynamics and system-­ specific reactions to perceived constitutional pathologies of the generally constituted branches of government. Finally, and as a consequence, the chapter concludes that the promise of comparative administrative law may, at times, lie less in finding universally applicable best practices among what appear to be functionally equivalent administrative agencies than in revealing each system’s particular anxieties and hopes about vindicating the values of constitutionalism. The remainder of this chapter proceeds in four sections. Section 1 explores the constitutional foundations of administrative law. Sections 2 sketches out the foundational values of constitutionalism. Section 3 links the project of administrative governance in the United States, Germany, and France with that of vindicating the values of constitutionalism within the institutional constraints of each of these systems. Section 4 draws some (unconventional) lessons from the comparison. Section 5 concludes.

1.  CONSTITUTIONALISM IN ADMINISTRATIVE LAW Discussing the role of independent administrative agencies already entails a choice of understanding these institutions as being, in an important sense, ‘administrative’ and therefore belonging to the realm of ‘administrative law’. Although the choice may seem rather innocuous – and to many, indeed, obvious – there is more to this practice than initially meets the eye. The conceptual and institutional paradigm of administrative law, as opposed to, say, that of constitutional (or private) law carries with it consequences that may not be fully justified by a proper appraisal of the role of these institutions within the architecture of governance. 1.1  Institutional Implications of ‘Administrative’ Law The choice between administrative or constitutional law (or administrative and ordinary civil law) as the paradigm for understanding what an institution of governance does can

1   For a list of the nearly 40 independent agencies in France, see http://www.legifrance.gouv.fr/ html/sites/sites_autorites.htm, last visited on August 31, 2009.

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The promise of comparative administrative law  141 have tremendous practical consequences. This can be seen best when comparing continental and Anglo-­American jurisdictions regarding the special jurisdiction of administrative versus ordinary tribunals or the justiciability of constitutional principles. Common law systems usually accord their ordinary courts jurisdiction over all kinds of legal questions (including administrative and constitutional matters), whereas civil law systems often distribute jurisdiction according to subject matter among ordinary courts, administrative courts, and constitutional courts. This difference contributed to Dicey’s proud remark that all legal disputes in the United Kingdom are resolved before ordinary courts, whereas the special administrative tribunals in France could not be trusted to give citizens their due in disputes with public authorities about legal rights (Dicey 1885: 215–16). Dicey was reacting against the legacy of French administrative law dating back to the ancien régime and the Bonapartist tradition in which the special apparatus of administrative justice seemed, from an English perspective, to protect the prerogatives of administrative hierarchy instead of the rights of citizens. Historians have recognized for some time, however, that this insight was deeply questionable even when Dicey first advanced it (Brown and Bell 1998: 45–50, Lindseth 2005). Whatever its original validity, certainly after the proliferation of constitutional courts with judicial review throughout Europe after World War II, continental jurisdictions have generally come to provide solid fundamental rights protection despite their continued distinction – both conceptually and ­institutionally – between constitutional, administrative, and private law (Nolte 2005). And yet, the choice between administrative, constitutional, or ordinary private law as a framework for understanding a given legal problem still has bearing today. In France and Germany, it will still often determine the assignment of jurisdiction as well as the available causes of action and remedies. Whether a dispute is framed as constitutional, administrative, or one of ordinary law still has important legal ramifications, even if not the devastating consequences that Dicey conjured up long ago. On this latter score, Anglo-­Saxon jurisdictions, in turn, have come closer to the civil law counterparts. Already in the decades preceding the outbreak of World War I, Dicey himself was forced to recognize the development of a system of autonomous administrative justice even in Britain (Dicey 1915). This development has deepened over time (Lindseth 2005). In the postwar years the United States famously codified a distinct view of administrative justice in the Administrative Procedure Act (APA) of 1946.2 Although the APA does not establish a separate judicial infrastructure, it provides distinctive rules for judicial review of administrative action. As a practical matter, the APA effectively creates a special form of jurisdiction that governs the review of agency decisions in ordin­ ary courts. Especially to continental jurists, then, it is often worth emphasizing that the US legal system, in some sense, also distinguishes between administrative law questions and other legal disputes. As every American law student knows, the United States has also created a de facto ‘special tribunal’ for administrative law in the Court of Appeals for the District of Columbia (DC) Circuit (Bloch and Ginsburg 2002). Given its location at the seat of government, this ‘ordinary’ court of appeals (to take Dicey’s term) has come to s­ pecialize – as no other court in the United States has – in matters of administrative law. Other courts   5 USC §§ 551 et seq.

2

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142  Comparative administrative law have recognized the DC Circuit’s jurisprudential leadership in these matters. Moreover, in light of the US Supreme Court’s miniscule docket, the Court of Appeals for the DC Circuit is often the final court for administrative complaints. Apart from these primary institutional and jurisdictional consequences, the embrace of administrative as opposed to constitutional law as the lens through which legal problems are analyzed may also have secondary institutional consequences in terms of the legal communities involved in shaping the law. In particular, the development of the law may be driven by different segments of the legal bar specializing in one or the other kind of legal dispute. Epistemic communities that work on legal development in practice and in the academy – especially on the European continent – may differ from one ‘field’ to another and can have enormous influence on the development of doctrine (for example, Lasser 2004). Finally, a variety of less well-­defined methodological expectations may coincide with conceiving of government action as taking place within the realm of administrative, constitutional, or private law (Möllers 2006: 128, Auby 2006: 14). In sum, choosing the paradigm of administrative as opposed to constitutional law (or private law), may determine the forum in which complaints will be heard, the process and the remedies that a litigant may hope to receive, as well as the conceptual tools and legal personnel involved in shaping the dispute. Whether any of this is ultimately justified depends on the understanding of administrative governance and on whether that understanding properly reflects the actual function of (independent) administrative agencies within any given system of governance. 1.2  Theory versus Practice of ‘Administrative’ Law The concept of ‘administrative’ law has two central connotations. The first is the idea of instrumental rationality, that is, the rational effectuation of pre-­determined policies. The second, related, idea is that of a principal/agent relationship between the administrative agency and the entity on whose behalf the agency is thought to act. Especially as applied to independent agencies, however, both of these connotations of ‘administrative’ law are deeply problematic in that they suggest an understanding of institutional mission, hier­ archy, and control that does not properly represent the role that independent agencies play in the architecture of modern governance. Although much of this critique (along with a good deal of the original misconception) is a staple of American teaching on administrative law, it is worth briefly reviewing here to lay the foundation for the comparison that follows. 1.2.1  Independent agencies and the implementation of policy Let us take first the idea of instrumental rationality. The task that independent agencies are charged with carrying out is frequently so broad as to strain any understanding of the agency as carrying out a ‘pre-­determined’ policy. What Bertrand du Marais, a member of the French Conseil d’Etat, has remarked with regard to the French Conseil de la Concurrence (Competition Authority) is equally applicable to dozens of agencies in France and elsewhere: ‘The imprecision of the essential elements of the infraction constitute, without a doubt, an implicit delegation of interpretive power to the ­[administrative agency]’ (2008: 13). Here, as so frequently elsewhere,  ‘the terms of the law are .  .  . so open-­ended as to carry with them no precise limitations’ (du Marais 2008: 13). For a par-

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The promise of comparative administrative law  143 allel elsewhere, one need only think of the ‘public interest’ standards that govern certain activities of the Federal Trade Commission, Federal Communications Commission, and other US agencies. Noting the breadth of this conferral of authority, Justice Scalia once famously remarked: ‘What legislated standard, one must wonder, can possibly be too vague to survive judicial scrutiny, when we have repeatedly upheld, in various contexts, a “public interest” standard?’3 Where agency activity is predicated on such vague legislative commands, independent agencies are as much creators of policy as the implementing agent of a policy ­substantively determined elsewhere. Of course, a whole host of control mechanisms may be brought to bear with more or less vigor in an attempt to rein in an agency’s exercise of discretion – from judicial review to executive and legislative substantive and budgetary oversight, report-­and-­wait provisions, and even required ratification of rulemaking (for example, so-­called ­‘homologation’ in France or analogous ratification of German administrative rules by the relevant Ministry or by the Bundesrat) (for example, Halberstam 2005: 795–6). In extreme cases, an agency can always be disbanded and recreated afresh with new personnel, as has ­happened in France (Demarigny 1996: 164–5). Often, however, an independent agency’s freedom persists, whether by express political choice or due to the political difficulty of effective control. Among the most autonomous of such institutions, perhaps, are the national and European central bank systems, which by virtue of constitutional provision or parliamentary authorization exercise enormous authority over matters that go to the core of economic policy. Even where the individual decisions by these or other agencies can legally be overturned by executive or legislative bodies, the costs of such control are often sufficiently high as to allow for a great deal of discretion on the part of the agency. Moreover, agencies, often with the help of bureaucratic and professional interest groups, can even help set legislative agendas and significantly shape legislative policy decisions (Derthick 1976). Administrative agencies with this kind of power turn the idea of ‘administration’ – understood as the implementation of policies set by others – upside down. Here, adding ‘independence’ from the executive to the independence that administrative agencies generally enjoy from the legislature may take on much larger significance than the marginal diminution of immediate interference on the part of an overly partisan chief executive. To the extent that agencies are truly ‘independent’, that is, to the extent they enjoy discretion that in one form or another eludes the strict controls of the more generally constituted institutions of governance, such agencies are an independent locus of policy ‘creation’ not ‘administration’. 1.2.2  Identifying the agent’s principal The idea of a principal/agent relationship that is intended to capture the role of administrative agencies is equally problematic. Let us assume for the moment that the agency is indeed an agent within this paradigm (Bishop 1990). Who is the principal?

3   Mistretta v. United States, 488 US 361, 416 (1989) (Scalia, J., dissenting). Writing more recently for the majority, Justice Scalia reiterated the constitutionality of such broad authority on the part of agencies to make policy judgments. See Whitman v. American Trucking Assns, 531 US 457, 473–6 (2001).

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144  Comparative administrative law In the United States, this question is hard to answer even with regard to wholly dependent agencies – that is, agencies within the executive branch and without any special claim to independence from the political control of the chief executive. In the United States, the question whether and to what extent executive officers and federal agencies serve the President has been the subject of significant debate since the early days of the Republic (Corwin 1957: 80–85). Scholars who have and still argue in favor of a ‘unitary’ vision of the executive and see agencies as serving the President as their principal (for example, Yoo et al. 2005, Calabresi and Prakash 1994) face consistent opposition from those maintaining that there are limits to seeing even pure executive agencies as mere ‘alter egos’ of the President (for example, Strauss 2007, Lessig and Sunstein 1994). As one US scholar recently put it: ‘[A]dministrative independence remains a powerful value even with respect to those agencies that do not enjoy formal insulation from the President’s removal ­authority’ (Barron 2008: 1101). But a measure of independence from the chief executive – whether on the part of executive or formally independent agencies – does not simply mean more freedom for agencies in the United States to do the bidding of Congress. To be sure, building on a Supreme Court dictum, legislators sometimes like to think of (independent) agencies as ‘an arm of Congress’ (Miller 1986: 63–4, Cushman 1941: 60–61 and 450–51). But the role of agencies and independent agencies within the American institutional constellation has long been exposed as rather more complex than either this idea or that of the unitary executive would suggest. Instead, as Peter Strauss has observed, whether formally independent or not, ‘[e]ach . . . agency is to some extent “independent” of each of the named branches and to some extent in relationship with each’ (1984: 579). This does not mean that ­agencies – even those that are formally independent – are beyond control. But they are not subject to the control of any single (or joint) institutional principal. Instead, they have sufficient autonomy to become an additional participant in the dynamic institutional web of governance (Moe 1987). In Germany and France, we also find discussions that complicate the identification of the proper principal. To be sure, there is no question that here, as in the United States, the legislature usually has created whatever agency is at issue. Thus, all legislatively (as opposed to, say, constitutionally) created agencies can be seen as ‘serving’ the legislature in some sense. But this tends to be a rather thin understanding of administration in the constitutional scheme of separation of powers and, perhaps more important, an unhelpful view of the agency relationship in the scheme of ongoing politics (Verkuil 1988: 259). For example, it says nothing about whose present political preferences the various agencies do, or ought to, serve. Even Otto Mayer (a scholar of French administrative law and founding figure of German positivist administrative law) remarked with regard to the relationship between parliament and administration, that the law can well give an agency the task to ‘complete the act in a creative way, not to say what the [law or legislature] itself had wanted in this case, but [to say] what it, the agency, deems proper’ (1924: 99). Taking this idea further, German scholars have focused for some time on the ­‘emancipation’ (Verselbständigung) (Mayntz 1978) and ‘autonomy’ (‘Eigenständigkeit’) (Schmidt-­Aßmann 1998) of administration. The chief focus in Germany is not on independent agencies as such, but on the freedom of the executive branch and the various elements of its bureaucracy from the complete substantive control on the part of the legislature and the judiciary. But part of this argument also concerns the autonomy of

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The promise of comparative administrative law  145 individual administrative agencies and jurisdictions – and the question of their rightful principal – as well. In a strict parliamentary system with strong judicial review such as Germany’s, the search for administrative autonomy might initially seem fanciful. And yet, several elements complicating a simple vision of hierarchy in administration exist here as well. German constitutional federalism, for example, creates a multitude of administrative units by placing much execution of federal law in the hands of the Länder, who administer a good deal of federal law ‘on their own behalf’ as opposed to ‘on behalf of the federation’ (Article 83–5 Grundgesetz) (Halberstam 2001). In addition, separation of powers principles protect the executive branch at large, and the Grundgesetz even further protects the division of labor within the executive branch by mandating that each individual minister within the cabinet conduct the affairs within her designated area ‘independently and on her own responsibility’ (Article 65 Grundgesetz). Finally, in many areas, the constitution or a law of parliament insulates certain functionally or geographically designated administrative jurisdictions from direct instruction on the part of superiors within the executive hierarchy (Groß 1999: 63–105). Drawing on these legal features of administrative insulation, some authors rather plausibly maintain that in Germany, too, the executive branch and (independent) administrative agencies do not merely implement the policy program determined by the legislature under judicial supervision. Instead, the executive bureaucracy in general and various agencies within that bureaucracy are partially autonomous sources of policies and norms (Hoffmann-­Riem 2006). In France, this question is discussed most explicitly in the context of ‘independent administrative agencies’, which are not generally conceived of as agents of either parliament or the executive. Perhaps because of the semi-­presidential consolidation of power within the executive branch on the one hand, and the strong parliament on the other, independent agencies are thought of as operating on an almost apolitical terrain. A Conseil d’Etat study, for example, claims that unlike independent agencies in the United States, independent agencies in France emerge from ‘a more neutral context’, not as a result of a ‘power play among the government and the parliament’ (2001: 370). What the study means by this is that the French parliament does not try to employ independent agencies as a way to control the administration of the laws itself. In this vein, the study even laments the lack of political control exercised over these agencies, attributing this problem to a kind of negative conflict: ‘[T]he executive shows vigilance in respecting the independence of independent agencies, and the parliament maintains an attitude of ­distance’ (370). Others confirm the latter point (for example, Auby 2006: 20). The general understanding in France is that the independence of such agencies is directed toward all political powers, that is, the executive as well as Parliament (for example, Marcou 2008: 6). As another scholar puts it, the quest is for a completely neutral agency, which, apart from being subject to judicial control, is independent of ‘economic as well as political powers’ (Autin 1997: 3). It may be useful, then, to distinguish between two kinds of independence. The first, independence from above, is independence from political direction by the constituted political branches, as well as from detailed judicial review. The second, independence from below, is independence from the political influence of the regulated entities. Both forms of independence are central to the functioning of independent agencies and figure promin­ ently in the debates.

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146  Comparative administrative law Scholars have long noted that by granting an agency independence from above, it may become bound to the forces from below and thus beholden to the industry it is supposed to regulate. For example, if an agency is given budgetary independence from the government by drawing on the financial support of the regulated industry, an inappropriate sense of loyalty to the donors may arise. This may work more subtly than simple bribery or corruption. As Gérard Marcou, for example, has explained in warning against the creation of new French ‘independent public authorities’: The direct financial support of an agency by the companies of a given sector cannot help but create a certain state of mind within the management of the companies as well as among the staff of the regulatory agency that regulation is viewed as servicing the regulated sector, even though the regulation, as an exercise of public power, can only be in the service of the general interest of the entire society. (2008: 11)

Some might say that, in certain situations, an attitude of serving a particular sector may not be entirely misplaced, as in the case of policing the basic rules of competition in a highly competitive industry. But this dependence, whether material or cultural, suggests a spurious connection between the agency and the wrong principal. Whether an agency’s mission is to deliver welfare checks, hospital services, food safety, or competition in the market place, the proper principal is not the immediate population served but the general citizenry that stands behind the political decision to provide such services. After all, every provision of services and every economic intervention – even one that ensures ­competition – involves distributive consequences that demand democratic authorization. If we ask more carefully about what is meant by an independent administrative agency’s ‘independence’, then, we see that independence from above and below calls into question the very label of ‘administration’ itself. The language of administration can obscure the institutionally independent role of agencies by presuming both the pre-­existence of a policy that is to be ‘administered’ as well as the existence of a neatly defined ‘principal’ in either the constituted branches of government or the sector or population that the agency most immediately serves or regulates. If we understand independent agencies more properly, however, as a partially independent institutional trustee shaping policy determination as well as policy delivery in the interests of the general public, we are deep in the realm of primary constitutional law. In summary, to the extent that agencies have any independence from their supervising branches, such agencies have become separate arenas of governance. We may not agree that they are a ‘headless fourth branch’ or ‘miniature independent governments’, as the Brownlow Commission once charged (The President’s Committee 1937: 345–6). Nonetheless, the authority of such agencies – to the extent it exhibits any independence from the general branches of government – must be justified by reference to the primary values of constitutionalism. In so doing, we must turn directly to the constitutional justifications that underpin the authority of the generally constituted branches of government (cf. Bressman 2003). We cannot pretend that agencies – at least not independent agencies – are simply an appendage of the principal branches of government we have come to know, like, and trust, or at least tolerate.

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The promise of comparative administrative law  147

2.  THE VALUES OF CONSTITUTIONALISM To the extent administrative agencies possess a significant degree of independence, they do not fit the simple paradigm of serving as the agent of a general branch of government (that is, parliament, the executive, or the judiciary). Designing such independent agencies is therefore not a matter of devising a system by which a designated principal can control a designated agent to achieve a pre-­determined goal. This makes the law and practice of independent administrative agencies ‘constitutional’ in the sense that agency legitimacy cannot be entirely derivative of the generally constituted branches of government. To the extent that such agencies are independent, we must go back to first principles justifying the exercise of public authority. For present purposes, these foundational values can be kept very brief. As I have suggested elsewhere (Halberstam 2009), we can discern three primary values of constitutional authority, which can be captured in the ideas of ‘voice’, ‘expertise’, and ‘rights’. Very roughly, the first and last can be seen as corresponding to what Benjamin Constant referred to as the liberty of the ancients and the liberty of the moderns (Constant 1988, Holmes 1984). What I am calling voice, then, is, roughly, the idea of participation in governance decisions that affect one’s life. What I am calling ‘rights’ is the protection of certain substantive interests we deem to be fundamental against majoritarian decisionmaking. Going beyond Constant, however, these may be rights against government or private interference and also rights to certain basic forms of government protection. Constitutionalism serves these two basic forms of liberty by, on the one hand, creating and vindicating the expression of political voice and, on the other, defining and protecting individual rights. In addition to serving these two classically recognized values of liberalism, however, constitutionalism also serves a seemingly more mundane value: expertise. As Fritz Scharpf, for example, has suggested, the legitimacy of public power also depends on the ‘output’ of governance (1999), which we can take here to mean governance that responds with effective action to our shared knowledge and experience of the world. Important for present purposes is that no single branch of government holds a monopoly on the vindication of any one of these values. The traditional separation of powers according to Montesquieu would have us equate voice with the parliament, expertise with the executive, and rights with the judiciary. Although there may be some truth to such an association as a prima-­facie matter, each branch ultimately can lay claim to vindicating any one or more of these three values. As I have suggested elsewhere, the parliament can vindicate rights, much as the courts can vindicate voice, and the executive can lay claim to vindicating any one or all of these values as well (Halberstam 2009). On this view, independent agencies may (and, in one way or another, must) draw on these foundational principles of legitimacy as well. To be sure, administrative agencies, including independent agencies, derive a good deal of legitimacy from the generally constituted branches within whose sphere of influence and supervision they operate. And yet, the extent to which they are indeed independent demands a commensurate justification in the primary values of constitutionalism. It would be all too easy to equate (independent) administrative agencies with expertise-­based governance or as a simple aid or resource for the generally constituted branches of government. The way in which (independent) administrative agencies tap into the values of constitutionalism is more complicated – and more interesting – than that.

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148  Comparative administrative law

3. (INDEPENDENT) AGENCIES AS CONSTITUTIONAL REACTION The thesis I want to explore briefly is that the various approaches to what is generically termed ‘administrative law’ often reflect the anxieties and preconceptions within each system about constitutional authority itself. To be sure, certain qualities of administrative law and the creation of independent agencies across various jurisdictions may to some extent reflect convergence in the machinery of governance and in the policies of market regulation across systems. And, as in all matters of governance, the emergence of certain institutional features may, in part, simply be the product of ad hoc political deals. But the creation of administrative agencies and of independent administrative agencies, in particular, can also be seen in a different light: as compensation for the perceived shortcomings of the generally constituted branches of government. Indeed, at times, the comparative investigation of the role of administrative agencies within the structure of governance may reveal less about the objective role of such agencies in governance generally and more about the specific institutional dynamics and constitutional worries of the system in which such agencies operate. In particular, a comparative investigation can reveal the rather different hopes and fears in the various systems about constitutionalism and, hence, about the substantive balance and institutional vindication of voice, ­expertise, and rights. First, take the United States, where a generally pluralist view prevails of politics as horse-­trading and bargaining without much need for reasoned justification. On the most cynical view, reasoned deliberation is only a mask for interest group politics anyway. And so, the basic rule is to let the most powerful political actors win (as long as fundamental rights and certain basics of ‘procedural’ fairness are observed). We see this attitude in many places, but perhaps nowhere is it confirmed more authoritatively than in the deferential judicial stance in reviewing general economic legislation for conformity with the US Constitution. As a general rule, Congress’s burden of justification for a piece of ordinary economic legislation is minimal.4 Accordingly, we turn to administrative agencies in the United States principally for two reasons. First, we use administrative agencies, as do all other systems, simply for help in addressing the immense magnitude of getting the job of governance done. The law as passed by a legislature is rarely ever self-­executing and therefore inevitably raises questions about how to organize the machinery of implementation (Mashaw 2006). In this vein, the expanded functions of the state, especially since the mid to late 19th century, have almost universally led to the felt need for growth in the machinery of governance. But we have turned to ‘independent’ agencies in the United States also with a second goal in mind: to inject expertise, professionalism, and bi-­partisanship into a system of governance that is otherwise (perceived as being) dominated by the politics of the winning party. Although the roots of this idea reach further back as well (Mashaw 2008), the broad move toward professionalism in the general federal bureaucracy was institutionalized with the cre­ ation of the Civil Service Commission that formally put an end to the system of political patronage in federal employment.5 The creation of the independent Interstate Commerce

4 5

  See, for example, FCC v. Beach Communications, Inc., 508 US 307 (1993).   Civil Service Act (Pendleton Act), 22 Stat. 403 (1883).

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The promise of comparative administrative law  149 Commission, the Federal Trade Commission and others soon followed further to shield many regulatory decisions from the immediate influence of the affected industries as well as party politics (Cushman 1941: 668). By shifting large amounts of norm-­generation to the administrative process – and to independent agencies in particular – the hope in the United States may be to escape from the rough and tumble of the largely unfettered politics that are constitutionally allowed to prevail elsewhere in the system. As the ‘administrative process theory’ of regulation puts it, ‘administrative growth [is] a welcome shift of regulatory responsibility away from legislators and towards decisionmakers who are better situated to pursue general interests and thus advance social welfare’ (Croley 2008: 72). One important component of this move away from ordinary politics is that administrative action – and the exercise of administrative discretion – is generally subject to a far greater burden of justification as compared to legislation. For example, legislation is not subject to a general ‘giving reasons’ requirement in the United States, but administrative rulemaking, in effect, is (Shapiro 2002). Due to the widespread availability of judicial review of agency action, agencies take many of their decisions – even in the area of general economic regulation – under the shadow of review in court for their reasonableness (Miles and Sunstein 2008). Add to this the fact that the independent Commissions are headed by bi-­partisan committees, and we have the (sometimes naïve) hope that we are overcoming politics as usual.6 With this in mind, the move to independent agencies takes on special significance in a presidential system of governance, in which the legislature’s trust of the executive is not a necessary element of the executive’s claim to power but a contingent fact at best. In a presidential system, a legislature convinced by the need for more expert governance will not want to leave important questions of regulation to ‘the politicians in the executive departments’ (Cushman 1941: 669). In this sense, independent agencies are not radically different from executive branch agencies in the American institutional constellation, but they can be seen as the paradigmatic attempt to restore the role of expertise in an institutional environment perceived as being otherwise dominated by the unfettered expression of voice. Notice, however, what else happens in the United States. The shift of regulation from Congress to (independent) administrative agencies raises skepticism about the objectivity of expertise and concern about the detachment of bureaucratic decisionmaking from the direct influence of voice (Frug 1983). Accordingly, the legitimacy of the American (independent) administrative structure is not grounded solely in judicial review, the professional expertise of bureaucrats, or the limited scope of Executive and Congressional branch oversight. Instead, democratic forces are systematically brought back into the administrative process itself, albeit in a manner that hopes to blunt the force of concentrated well-­heeled interest groups (Croley 2008: 134–9). By insisting, in many contexts, on transparency and notice and comment rulemaking, and by numerous other avenues of formal and informal participation, the administrative process is structured to stand in part on its own grounding in voice.

6   Scholars have grappled with the problem that even independent agencies cannot be fully shielded from White House politics (Barron 2008).

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150  Comparative administrative law The picture changes as we turn to Germany. A rather prominent theme in German constitutional theory is the idea that the Grundgesetz prescribes the grand substantive outlines of administrative law as well as the general objects and goals of the administrative state. In comparison with the United States and France, this has led to a ‘relatively strong constitutionalization of German administrative law’ in terms of both substance and procedure (Möllers 2008: 8, cf. Oeter 1998: 167–8). To be sure, these constitutional objectives provide only weak guidance and would rarely suffice for, say, an immediate judicial determination of a particular substantive regulatory measure. And yet, within the German constitutional tradition, ordinary legislation as well as administrative regulations must conform rather closely to constitutional prescriptions. The judiciary plays a large role in this. As a general matter, judicial review of economic intervention is far stricter in Germany than in the United States (Eberle 2008, Baer 1999, Currie 1989). Consider, for example, the decision in Finanzausgleich I (Fiscal Equalization I), in which the German Bundesverfassungsgericht (Federal Constitutional Court) put forth an elaborate set of principles replete with specific rules regarding seaport charges to examine the constitutionality of the federal program of fiscal equalization.7 Even beyond the specific scheme of fiscal equalization enshrined in Article 107 of the Grundgesetz, the Bundesverfassungsgericht will review ordinary market regulation far more closely than would the US Supreme Court. The general equality clause of Article 3, para. 1, of the Grundgesetz, for instance, is considered to apply far more broadly than its Fourteenth Amendment equivalent does in the United States. To be sure, the Bundesverfassungsgericht also applies different levels of scrutiny to different situations – ranging from a weak ­‘evidence review’ and ‘defensibility review’ to the most stringent ‘unconstrained review’. And yet even the most minimal of these is more searching than an American-­style ‘rational basis’ review. As David Currie noted long ago, ‘whatever formulation is employed, review under the general equality provision is never as toothless as it has become in economic cases in the United States’ (369). Similarly, the right to exercise one’s profession plays a greater role in Germany than it does in the United States, not least because in Germany that right is specifically enshrined in Article 12 of the Grundgesetz. In the United States, by contrast, such a right has been at most implicit in the idea of constitutional protection of liberty and equality and has been virtually nonexistent since the New Deal.8 The upshot is that the German Grundgesetz is generally taken to provide firmer substantive guidelines than the US Constitution for both the legislature and the executive. And the German Federal Constitutional Court polices these guidelines rather stringently  – more strictly than the US Supreme Court does with regard to American constitutional analogues. One might therefore speculate that in Germany there is less of a felt need to remove matters from the rough and tumble of political horse-­trading because politics and government action writ large are seen as more closely guided by constitutional p ­ rinciples in the first place.   72 BVerfGE 330, 408–17 (1986).   Compare, for example, 7 BVerfGE 377 (1958) (the Pharmacy Decision) with Williamson v. Lee Optical Co., 348 US 483 (1955). Even with the relaxation of judicial review under Article 12 GG since the Pharmacy Decision, Article 12 GG continues to play an important role in German constitutional adjudication. See, for example, BVerfGE 98, 365 (1998). 7 8

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The promise of comparative administrative law  151 Two additional important features cut against the trend to formally independent agencies in Germany. First, Germany’s parliamentary system and constitutionally grounded executive cabinet ensure a necessary political connection between the broad governing majority (often a coalition) in parliament and the collectivity of ministers in the executive branch. This creates – as a structural constitutional matter – a greater degree of trust in Germany than exists in the United States between the lawmakers and their potentially rival ‘politicians’ in the executive branch. Second, Germany’s system of executive federalism, whereby a vast amount of administration is delegated to the constituent states (Länder) already creates a pervasive ‘independence’ of administration from the great battles of national majority politics. Länder agencies are beholden, if at all, to a plurality of political majorities at the constituent state level that may differ from one another and from the political majority at the federal level. In this way, executive federalism can sometimes ensure a certain independence of administration more reliably than even a system of formally independent federal agencies run by a handful of commissioners appointed by the chief executive. All this means that there may well be very specific and quite narrow functional reasons for the creation of formally ‘independent’ agencies in banking and journalism and maybe even in reviewing market competition (Masing 2008a). But as a more general matter, there are few calls for independent administrative agencies in Germany to serve as a sober counterpoint to raw politics. It comes as no surprise, then, that the creation of the most recent – and perhaps most extensive – independent agency, the Federal Network Agency, was not simply an indigenous development but was shaped considerably by the European Union (for example, Bulla 2007: 377–9). As public law scholar and German Bundesverfassungsgericht Judge Johannes Masing notes, with regard to the bulk of economic regulation, there is little question in Germany that complete executive control provides the proper means to implement ‘objectified guidelines’ (2008b: 4), as well as ‘legislative norms following clear criteria,’ subject, of course, to ‘judicial . . . review’ (6). As Masing further notes, ‘for traditional government tasks, the traditional subjection of administration to executive branch control remains undisputed to this day’ (5). As for France, the constitutional framework governing the various institutions initially seems rather opposed to the existence of independent regulatory agencies. Unlike the US Constitution or the German Grundgesetz, the French Constitution expressly provides the executive branch with the power to issue regulations. The Fifth Republic’s great compromise, reflected in Articles 34 and 37 of the French Constitution, formally grants the executive branch the residual power to issue regulatory decrees in all matters not expressly defined elsewhere under the constitution as ‘law(s)’. This places extra-­parliamentary norm generation on firmer constitutional footing than exists in either Germany or the United States. At the same time, along with the further provision in Article 20 that the Government ‘disposes over the administration’ (‘dispose de l’administration’) and Article 21 that the Prime Minister shall ‘exercise the power to make regulations’ (‘exerce le pouvoir réglementaire’), the French Constitution would seem to lend support to the argument for strict executive branch control of all regulation. And yet, the Conseil d’Etat and Conseil Constitutionnel have had little difficulty making space within the French constitutional constellation for the activities of independent administrative agencies. Administrative and constitutional jurisprudence have cut back on the executive’s independent constitutional warrant of ‘autonomous’ regulatory power.

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152  Comparative administrative law In so doing, the two tribunals have largely turned to a more traditional understanding of executive regulation as a power to implement legislative commands (Favoreu 1987, Lindseth 2004). The power of independent administrative agencies is thus understood as subsidiary to both parliament and the executive. And we ultimately find here, as we do elsewhere, resort to the familiar trope that administrative agencies are not ‘autonomous’ regulators at all, but merely in the business of ‘applying’ the law (Conseil d’Etat 2001: 295). More interesting, however, are the French justifications for turning to independent agencies. France created its first independent administrative agency, formally designated as such, not in an effort to improve the regulation of market actors but in response to a public outcry over civil liberties and the protection of privacy. From 1971 to 1974, the French government ran a program known by its acronym SAFARI,9 which sought to collect and consolidate information about French citizens from a variety of sources into a central database. After Le Monde exposed this venture (Boucher 1974), the Minister for the Interior, Jacques Chirac, canceled the project. Soon thereafter, the parliament established the Commission nationale de l’informatique et des libertés (CNIL) (National Commission for Informatics and Liberties). On the insistence of the French Senate, the law expressly designated the new agency an ‘autorité administrative indépendante’ (Frayssinet 1992: 7–8). But the CNIL did not remain an isolated case. Instead, it began a trend of turning to independent agencies in matters pertaining to civil liberties.10 At times this use of independent agencies as protectors of individual liberties has even come to serve as the paradigm against which the turn to administrative agencies is examined more broadly.11 Perhaps unsurprisingly, the birth of this particular use of independent agencies came at a time when constitutional rights review in France was still in its infancy and fundamental rights protection in the French constitutional system had become a centerpiece of political debate (cf. Sweet 1992: 66–9). To be sure, moving matters outside the executive hierarchy carried dangers of its own in terms of lack of accountability and the protection of rights. At the same time, by placing these decisions with an ‘independent’ administrative agency, such a move triggered heightened judicial review via the administrative review tribunals (for example, in terms of demanding transparency and a statement of reasons) as compared with that imposed on actors located within the bastion of France’s strong executive (Sabourin 1983). A second reason for the French move toward independent agencies is deeply connected to the substantive politics of market regulation. The French government shifted rather  9   For ‘système automatisé pour les fichiers administratifs et répertoire des individus’ (‘automated system for administrative files and the directory of individuals’). 10   Another prominent example is the creation of the National Commission on the Control of Security Interceptions or CNCIS, which controls the authorization of national security wiretaps and which was created after the European Court of Human Rights, in Kruslin v.France, Judgment 24 April 1990, Series A No. 176-­A, condemned France’s lack of systematic wiretapping safeguards (cf. Conseil d’Etat 2001: 275). 11   For example, Professor Martine Lombard opens her general introduction to an edited volume on economic regulation and democracy by invoking independent agencies’ unquestioned legitimacy in the protection of liberties and by suggesting that the central question is whether independent agencies in the economic sector raise similar or different issues from those protecting individual liberties (Lombard 2006: 1).

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The promise of comparative administrative law  153 dramatically in the 1980s from a dirigiste approach and a strong belief in the virtues of nationalization to the modern European mainstream of a liberal market economy. As one scholar puts it, this was nothing short of a ‘vast movement of disengagement of the state from the economy’ (Lombard 2006: 2). After briefly trying to address France’s economic difficulties in the more traditional French centralist style, François Mitterand, the first socialist President to be elected in France, changed course in 1983 toward denationalization and deregulation. But two constituencies needed to be sold on this shift: investors and voters. The French government needed to gain credibility, especially with international in­vestors, that the more liberal approach to market regulation was here to stay. The European Union, which might be seen as a rather complicated ‘independent agency’ of sorts, surely served as part of that pre-­commitment strategy. The creation of domestic independent agencies helped signal a commitment to this new approach as well. Putting these two trends together, the creation of domestic independent agencies was often the only way in which France, which had not entirely divested itself of certain functions in energy, telecommunications, and postal services, could follow the open competition ­policies that were now ‘imposed’ by the European Union (Conseil d’Etat 2001: 272–5). As far as French voters were concerned, the new market approach had become a matter of French elite consensus. After Mitterand’s conversion in 1983, the socialists repeatedly signed on to the new strategy, thereby largely taking this issue out of electoral contention. Perhaps because of this fact or perhaps because the move to a more liberal approach to market regulation did not fully cure France’s economic ills, the major parties soon withdrew from any forceful defense of these policies. Extensive periods of co-­habitation may also have contributed to this evasion of responsibility. In any event, the government – whether of left or right – increasingly presented the new French approach as an objectively necessary response to the demands of globalization or even as the necessary price for France’s membership of the European Union (Hall 2006). A move toward independent agencies as a rather convenient political fix (cf. Tushnet 1999: 1286) seems to fit with this rhetoric of depoliticization as well. In addition to the reasons behind the French move toward independent agencies, it is also worth highlighting the high degree of comfort in France with this move away from voice and toward the vindication of rights and expertise through independent agencies. Whereas turning to experts proved to be in tension with American sensibilities about democratic voice, France has not yet seen a similar infusion of participatory democracy in the agency context. To be sure, individual scholars have for some time argued in favor of democratizing France’s administrative state (for example, Lemasurier 1980). And transparency has gradually improved over what it once was (Lasserre et al. 1987: 187–204). And yet, in France one still searches in vain for a basic requirement to notify the general public or to take, and respond to, comments from the general public in the process of crafting an administrative regulation. Administrative procedure (apart from that applicable to judicial review of administrative action) has not been codified in a comprehensive manner. To the extent procedural requirements exist, they derive from judicial pronouncements or from the organic or substantive laws governing the various administrative agencies. And what we frequently find here is not a broad invitation to democratic participation, but a requirement to hear an individually affected party before taking an adverse decision, the requirement to consult

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154  Comparative administrative law specific agencies or specific previously identified stakeholders, and the requirement to perform scientific or empirical studies in advance of administrative action (Bermann and Picard 2008: 90–92). Even after France’s push for ‘administrative democracy’ over the past thirty years, and even after the introduction of the constitutional idea of decentralization and the local referendum in 2003 (Philippe 2004), the participatory element in shaping regulatory proposals in France is rather thin. As far as broad forms of public participation in regulatory policy formation (as they exist in the United States, for example) are concerned, French law ‘has not yet integrated such practices to any significant level’ (Auby 2006: 25).

4. SOME (UNCONVENTIONAL) LESSONS FROM THE COMPARISON There are not only important continuities, but also striking – and neglected – d ­ iscontinuities in the various experiences with administrative agencies in the United States, Germany, and France. The relative convergence in economic policies toward market regulation and market competition in all three systems indeed suggests certain potential commonalities in the means of maintaining, or bringing about, a liberal market economy. In this sense, the increased move toward independent agencies in Europe in recent years may well reflect a certain transatlantic institutional rapprochement, which scholars have begun to explore with good reason. But the various constitutional dynamics, histories and (perceived) pathologies nevertheless cast this turn to independent agencies in a distinctly national light. Most important from this perspective are the distinct inter-­institutional dynamics resulting from constitutional structure, that is separation of powers, federalism, and judicial review. Whereas in the United States and France, the legislature faces an independently politicized executive branch, Germany’s Bundestag does not. And whereas Germany maintains a constitutionally guaranteed system of executive federalism, we still find (despite recent reforms in France and the longstanding tradition of cooperative federalism in the United States) the constitutionally embedded centralization of political control over national executive functions in France and the United States. To be sure, political parties and bureaucratic structures mediate among the branches and between the levels of government. And yet, when it comes to administering national laws and policies, the legislatures in the United States and France confront a powerful and independently politicized executive in the way that Germany’s legislature does not. Consider in this regard also the different traditions of judicial review. Juxtaposed against a tradition of relatively constrained constitutional review in France, we find the availability of constitutional review in the United States for fundamental rights v­ iolations but not for the reasonableness of economic legislation, and a tradition of rather pervasive judicial review in Germany. Considering the various national traditions of separation of powers, federalism, and judicial review, then, we can see how the perception of constitutional pathology in the various systems and the inter-­institutional dynamics track promin­ent features of constitutional design. It should no longer come as a surprise that (1) France and the United States would react to their constitutional structure by turning away from executive branch hierarchy toward independent agencies in the search for

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The promise of comparative administrative law  155 expertise to a greater degree than Germany and that (2) in France, more so than in the other two systems, a prominent element in the move toward administrative agencies would also be a concern about the protection of rights. Second, consider the opposite political starting points of France and the United States in terms of their fundamental approach to regulation and the political dynamics in moving toward regulation. Whereas in the United States (independent) administrative agencies were largely deployed as a way to improve the effectiveness of government regulation, in France turning to independent administrative agencies constituted a significant retreat of the state. The French move toward independent agencies as a means of enlisting the support of the public for a new politics of elite consensus is therefore relatively absent in the United States. Accordingly, it may in some sense be true that the United States and France can be seen as converging on a more shared approach to market regulation in which independent administrative agencies serve similar functions with regard to the market. And yet, the political significance attributed to those agencies in the course of justifying regulation to the public differs greatly in the two systems. Finally, within the administrative process itself we seem to find the relative insistence on voice in the United States juxtaposed against the apparent emphasis on vindicating expertise and rights in France. As compared to the United States, we find in Germany, too, a stronger emphasis on expertise over that of voice when comparing, for instance, high court judgments upholding bureaucratic authority to issue regulatory norms (Möllers 2005: 175). Here, again, then, it is quite possible that the different degrees of public participation in the administrative process may reflect not different stages in some general evolution of universally applicable principles of good administrative governance, but persistent differences in the various national preconceptions about politics, inter-­institutional trust, and the vindication of constitutional values.

5. CONCLUSION The language of ‘administrative’ law can at times be deeply misleading. It may suggest a certain principal/agent model that does not match the institutional role of those agencies that have a good measure of autonomy vis-­à-­vis the regularly constituted branches of government. But it would be mistaken to view such agencies as mere appendages or servants of parliament, the executive, or the judiciary. Instead, we must recognize them for what they are: partially autonomous institutions of public governance demanding independent justification within the constitutional constellation of which they form a part. Once we consider the justifications for independent agencies in terms of the basic values of constitutionalism, we find important differences in the approaches to such agencies in the various systems. Indeed, as we compare the discussion about independent administrative agencies in one system with that in another, we do not simply find a common quest to address a common problem of effective rational governance of the market. To be sure, supranational and global pressures and various resulting legal obligations may at times push in the direction of adopting functionally similar (independent) administrative agencies in otherwise distinct legal systems. And yet, this focus on commonality ought not to obscure the profound difference in resonance that independent agencies have within these various systems.

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156  Comparative administrative law On closer examination, we find in the discussion about independent administrative agencies specific hopes and fears about constitutional governance in the particular institutional constellation of each system. Administrative agencies help get the job of governance done. But administrative agencies – and independent agencies in ­particular – are often sought out to fix perceived problems in the constitutional architecture of the particular system in which they operate. And in the discussions in the United States, Germany, and France of independent agencies, we often find rather different ­conceptions of what these particular problems are. In sum, we miss much if we understand the United States, Germany, and France as simply struggling with a common functional problem of how best to create effective administrative agencies to implement the task of regulation in a liberal market economy. To fulfill the promise of comparative administrative law, we must go further. We must explore the many ways in which each system’s struggle with independent agencies is a specific reaction to constitutional architecture, political history, and the basic hopes and fears about the vindication of constitutionalism itself.

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La transparence administrative, Paris: Presses Universitaires de France. Lemasurier, Jeanne. 1980. ‘Vers une democratie administrative: du refus d’informer au droit d’être informe’, Revue du droit public, 5: 1239–69. Lessig, Lawrence and Sunstein, Cass R. 1994. ‘The President and the Administration’, Columbia Law Review, 94: 1–123. Lindseth, Peter. 2004. ‘The Paradox of Parliamentary Supremacy: Delegation, Democracy, and Dictatorship in Germany and France, 1920s–1950s’, Yale Law Journal, 113: 1341–415. Lindseth, Peter L. 2005. ‘“Always Embedded” Administration?: The Historical Evolution of Administrative Justice as an Aspect of Modern Governance’, in The Economy as a Polity: The Political Constitution of Contemporary Capitalism, Christian Joerges, Bo Stråth, and Peter Wagner, eds., London: UCL Press. Lombard, Martine. 2006. ‘Introduction Générale’, Régulation économique et démocratie, Martine Lombard, ed., Paris: Dalloz. Marcou, Gérard. 2008. ‘Les autorités administratives “dépendantes” et “indépendantes” dans le domaine de l’intervention économique de la puissance publique – Une analyse sur des secteurs sélectionnés’, presented at the Centre Malher, Université Paris 1 (Panthéon-­Sorbonne) (July 4–5, 2008). Forthcoming in Unabhängige Regulierungsbehörden: Organisationsrechtliche Herausforderungen in Frankreich und Deutschland, Johannes Masing and Gerard Marcou, eds., Tübingen: Mohr Siebeck. Mashaw, Jerry L. 2006. ‘Recovering American Administrative Law: Federalist Foundations, 1787–1801’, Yale Law Journal, 115: 1256–344. Mashaw, Jerry L. 2008. ‘Administration and “The Democracy”: Administrative Law from Jackson to Lincoln, 1829-­1861’, Yale Law Journal, 117: 1568–693. Masing, Johannes. 2008a. ‘Zur Möglichkeit und Notwendigkeit übergreifender Grundsätze der Netzregulie­ rung’, in Telekommunikation, Energie, Eisenbahn: Welche Regulierung brauchen die Netzwirtschaften?, Jörn Lüdemann et al. eds., Tübingen: Mohr Siebeck. Masing, Johannes. 2008b. ‘Unabhängige Behörden und ihr Aufgabenprofil’, presented at the Centre Malher, Université Paris 1 (Panthéon-­Sorbonne) (July 4–5, 2008). Forthcoming in Unabhängige Regulierungsbehörden: Organisationsrechtliche Herausforderungen in Frankreich und Deutschland, Johannes Masing and Gerard Marcou, eds., Tübingen: Mohr Siebeck.

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158  Comparative administrative law Mayer, Otto. 1924. Deutsches Verwaltungsrecht, vol. I., Berlin: Duncker & Humblot (reprint 2004). Mayntz, Renate. 1978. Soziologie der Öffentlichen Verwaltung, Heidelberg: Müller Juristischer Verlag. Miles, Thomas J. and Sunstein, Cass R. 2008. ‘The Real World of Arbitrariness Review’, University of Chicago Law Review, 75: 761–814. Miller, Geoffrey P. 1986. ‘Independent Agencies’, Supreme Court Review, 1986: 41–97. Moe, Terry M. 1987. ‘Interests, Institutions, and Positive Theory: The Politics of the NLRB’, Studies in American Political Development, 2: 236–99. Möllers, Christoph. 2005. Gewaltengliederung, Tübingen: Mohr Siebeck. Möllers, Christoph. 2006. ‘Methoden’, in Grundlagen des Verwaltungsrechts, vol. 1., Wolfgang Hoffmann-­Riem, Eberhard Schmidt-­Aßmann, and Andreas Voßkuhle, eds., Munich: C.H. Beck. Möllers, Christoph. 2008. ‘Materiellrechtliche Bindungen’, presented at the Centre Malher, Université Paris 1 (Panthéon-­Sorbonne) (July 4–5, 2008). Forthcoming in Unabhängige Regulierungsbehörden: Organisationsrecht liche Herausforderungen in Frankreich und Deutschland, Johannes Masing and Gerard Marcou, eds., Tübingen: Mohr Siebeck. Nolte, Georg, ed. 2005. European and US Constitutionalism, Cambridge: Cambridge University Press. Oeter, Stefan. 1998. Integration und Subsidiarität im deutschen Bundesstaatsrecht: Untersuchungen zu Bundesstaatstheorie unter dem Grundgesetz, Tübingen: Mohr Siebeck. Philippe, Xavier. 2004. ‘The Amendment of the French Constitution “on the Decentralized Organization of the Republic”’, International Journal of Constitutional Law, 2: 691–722. Sabourin, Paul. 1983. ‘Les Autorités Administratives Indépendantes: Une Catégorie Nouvelle’, L’Actualité Juridique Droit Administratif, 5: 293–94. Scharpf, Fritz W. 1999. Governing in Europe: Effective and Democratic?, Oxford: Oxford University Press. Schmidt-­Aßmann, Eberhard. 1998. Das Allgemeine Verwaltungsrecht als Ordnungsidee, Berlin: Springer. Shapiro, Martin. 2002. ‘The Giving Reasons Requirement’, in On Law, Politics, and Judicialization, Martin Shapiro and Alec Stone Sweet, eds., New York: Oxford University Press. Strauss, Peter L. 1984. ‘The Place of Agencies in Government: Separation of Powers and the Fourth Branch’, Columbia Law Review, 84: 573–669. Strauss, Peter L. 2007. ‘Overseer, or “The Decider”? The President in Administrative Law’, George Washington Law Review, 75: 696–760. Sweet, Alec Stone. 1992. The Birth of Judicial Politics in France, New York: Oxford University Press. The President’s Committee on Administrative Management. 1937. ‘Report of the Committee with Studies of Administrative Management in the Federal Government’, reprinted in Subcommittee on Separation of Powers of the Senate Committee on the Judiciary, Separation of Powers and the Independent Agencies: Cases and Selected Readings, S. Doc. No. 91-­49 (1969). Tushnet, Mark. 1999. ‘The Possibilities of Comparative Constitutional Law’, Yale Law Journal, 108: 1225–308. Verkuil, Paul R. 1988. ‘The Purposes and Limits of Independent Agencies’, Duke Law Journal, 1988: 257–79. Yoo, Christopher S., Calabresi, Steven G., and Colangelo, Anthony J. 2005. ‘The Unitary Executive in the Modern Era, 1945–2004’, Iowa Law Review, 90: 601–731.

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10.  The puzzle of independence and parliamentary democracy in the common law world: a Canadian perspective Lorne Sossin1

This chapter explores the relationship between partisanship and independence in administrative law in Canada and the common law world. Partisanship is endemic to parliamentary democracy. The fusion of legislative and executive roles means that the leadership of the executive branch of government (i.e., the Prime Minister and Cabinet) is selected from the political party that leads the legislative branch of government through the confidence of Parliament. At the same time as the Crown, the executive leadership cannot exercise public powers in ways intended to benefit one party or one partisan perspective on public policy matters. Partisanship thus drives the process that produces the executive branch, but has no legitimate role as a goal or motivation in the exercise of public authority. Consequently, it should come as no surprise that a key tension in the development of administrative law in Canada, and elsewhere in the common law world, is how to ensure executive decision-making is sufficiently independent – that is, not unduly influenced or undermined by partisan considerations. Independence can be eroded by partisanship from the executive branch in at least two distinct (and interrelated) ways – first, through the exercise of executive discretion over appointments and second, through the attempts directly or indirectly to influence the actions of executive agencies. There are few legal constraints which preclude the executive from acting on partisan motivations but strong cultural aversions to this in the common law world. In this look back at a tumultuous decade for Canada, I explore what happens when those cultural aversions cease to be effective. Independent administrative bodies do not fit easily into the political, constitutional or legal landscape of parliamentary democracy as it is practiced in many parts of the common law world. These administrative bodies are generally established to fulfill policy mandates but without the usual forms of hierarchical accountability to the government that prevailing conceptions of parliamentary democracy normally demand. Independent administrative bodies are not courts and are not government, yet have significant impact both on the rights and interests of individuals and groups and the advancement of public policy objectives.2 Administrative bodies, in this sense, must stand apart from and yet be 1   This chapter builds on Sossin (2008) and the paper prepared for the first Workshop on Comparative Administrative Law, Yale University, May 2009, where I benefited from constructive and thought provoking comments on my paper and a lively exploration of comparative administrative law more generally. I am grateful to Vasuda Sinha and Danny Saposnik for their excellent research assistance on the original version of this chapter. 2   There is no obvious definition for ‘independent administrative body.’ In Canada, for example, the range of administrative bodies at both the federal and provincial/territorial level that could be

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160  Comparative administrative law knit together with legal and policy accountability mechanisms. They have been said to ‘span the constitutional divide between the judiciary and the executive’.3 Similarly, the notion of the independent exercise of executive discretion in the area of appointment to tribunals and courts reflects an inherent tension. How can the apex of executive government remain independent in this key function – and from whom? While the Canadian Constitution creates robust protections for judicial independence, these protections are triggered the moment after appointment. They do not constrain the executive’s power to appoint judges and other adjudicators and regulators or the process employed to make such appointments. Rather, whatever limits are set out by the statutes empowering executive appointment and common law administrative law constraints provide the only rule of law bulwark against partisan considerations infiltrating meritbased appointment. These hybrid settings where the political realities of partisanship and the legal structures of autonomy from partisan considerations create what I term a ‘puzzle’ of independence in common law parliamentary democracy. My focus here is on how this puzzle has manifested itself in the Canadian experience, where both independent administrative bodies and judicial appointment have risen to national prominence due to several highprofile and high-stakes crises. During a decade in office (2006–15), Prime Minister Harper’s Governments, in particular, attracted allegations of partisanship in appointments to the courts and attempts to influence independent administrative bodies (including the Canadian Nuclear Safety Commission, discussed below). The Harper Government came to power in a particularly acrimonious period of Canadian politics with a strongly ideological policy agenda. As a reaction to this confrontational and ideologically divisive period, the Liberal Government of Justin Trudeau, elected in October 2015, has been at pains to reiterate respect for independent institutions of accountability (whether parliamentary, judicial or administrative bodies). In February of 2016, the government issued a press release setting out its commitments to a more ‘open, transparent, and merit-based selection process’ for federal appointments.4 The new Canadian Government has unveiled a new process for exercising its discretion to appoint Justices of the Supreme Court of Canada (discussed below), intended to realize the Government’s expressed commitments both to diversity and transparency.5 So, how did we get here? The allegations of interference during the decade under review in this brief study suggest a need for a more coherent approach to the administrative law constraints on executive power. To what extent and in what ways should a

fairly characterized as ‘independent’ would be vast. The term is used here to cover, at a minimum, executive bodies with an adjudicative mandate and bodies (both executive and legislative) with a mandate of oversight over executive decision-making (see generally Ratushny 1990). 3   Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), [2001] 2 S.C.R. 781, at para. 32. As discussed below, while these bodies are viewed as part of the executive branch in Canada and Australia, they are part of the judicial framework in the U.K. On the significance of Ocean Port, see Jacobs (2013). 4   (February 25, 2016) http://pm.gc.ca/eng/news/2016/02/25/prime-minister-announces-newgovernor-council-appoint​ment-process. 5   See https://www.liberal.ca/files/2015/06/a-fair-and-open-government.pdf.

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The puzzle of independence and parliamentary democracy  161 government in a parliamentary democracy be constrained from such interference? To what extent and through what mechanisms may the government legitimately seek to influence the direction, approach and decision-making of independent bodies? Does independence enhance or limit the accountability of these bodies? Should independence be seen as simply independence from the government, or do these bodies similarly need independence from other potential sources of undue influence, from stakeholder groups to political parties? If these bodies are independent of everyone, to whom are they accountable and in what ways? And how (if at all) does the independence of administrative bodies differ from that of courts? These are the questions I seek to explore in this chapter. I view these case studies in light of the law of administrative independence not only in Canada but also elsewhere in the common law parliamentary democracies, in particular, the United Kingdom, Australia and New Zealand. These jurisdictions have avoided the kinds of problems that have arisen in Canada, I conclude, because political leadership in those countries has approached administrative justice and oversight systemically and has made clear, as a legislative and policy priority, that independent bodies have the ability to function in the public interest without political interference. The analysis below is divided into two parts. Part I examines two case studies from the tumultuous decade of Conservative Government in Canada including the unprecedented partisan confrontation between Prime Minister Stephen Harper and Chief Justice Beverley McLachlin over an appointment to the Supreme Court, and the removal of Linda Keen, the Chair of the Canadian Nuclear Safety Commission. Part II puts these recent disputes in a broader legal context and attempts to reconcile the status of independent administrative bodies in public law across the common law world where forms of parliamentary democracy prevail.

I. TWO CANADIAN CASE STUDIES: PARTISANSHIP, POLITICS, AND INDEPENDENCE The greatest threat to the independence of courts and tribunals in parliamentary systems, arguably, is partisanship. Partisanship in politics is in many respects the lifeblood of elections and parliamentary politics. Partisanship in Canada has been fueled by the centralization of political life at the federal level within the office of the Prime Minister and evidence of growing influence and intervention by the political staff within the Prime Minister’s Office (PMO). At the same time, Canada has witnessed the erosion of any shared sense of the boundaries of partisanship, or respect for certain ‘no-go zones’ that need to be (at least relatively) non-partisan if democracy is to work (for example, Elections Canada, the non-partisan body which regulates Canadian federal elections also came under attack during the period under review).6 Then Chief Justice Lamer of the Supreme Court of Canada observed with respect to the non-partisan nature of the courts in the Provincial Judges Remuneration Reference:

6   Kate Heartfield, ‘The Harper Conservatives and Elections Canada’ Ottawa Citizen (February 3, 2014) at http://ottawacitizen.com/opinion/the-harper-conservatives-and-elections-canada.

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162  Comparative administrative law [that]. . .the legislature and executive cannot, and cannot appear to, exert political pressure on the judiciary, and conversely, that members of the judiciary should exercise reserve in speaking out publicly on issues of general public policy that are or have the potential to come before the courts, that are the subject of political debate, and which do not relate to the proper ­administration of justice.7

Although judicial independence is said to require ‘depoliticization,’ courts have recognized that there is little they can do to compel governments to abide by this direction. If a government tries to subvert the impartiality and independence of the courts by appointing party hacks and fellow travelers to the bench, or by underfunding courts, for example, there is little that courts could do to resist politicization, beyond relying on public outrage to constrain political action. Recent headlines from Pakistan to Zimbabwe demonstrate the futility of legal process and the rule of law in the absence of political buy-in (Sharpe 2010). The Supreme Court of Canada has applied the framework of judicial independence to the common law requirement of independence before administrative decision-makers – this framework consists of: (i) security of tenure; (ii) financial independence; and (iii) administrative autonomy.8 Because this framework only guides the application of the common law requirement of procedural fairness in the administrative decision-making context, it can also be altered through clear statutory provisions.9 Because of the interrelated principles around adjudicative independence in the court and tribunal context, a partisan infringement in one context creates ripple anxieties in the other. As discussed in the two case studies below, this dynamic was particularly salient during the decade of Stephen Harper’s Conservative Government in Canada. A.  The Calamitous Case of Supreme Court Appointments Canada saw the nadir of depoliticization (and the apex of its opposite) in 2014 with an unprecedented confrontation between Prime Minister Harper and Chief Justice Beverley McLachlin (Sossin 2014; Lawrence 2014). The root of what has come to be known as the Nadon affair was the appointment of Federal Court of Appeal Justice Marc Nadon to the Supreme Court of Canada on September 30, 2013. Unlike the U.S. (and now the U.K.), the executive’s discretionary appointment power is virtually unfettered in Canada. When exercising this discretion, the government is engaged in an application of public authority governed by administrative law. In CUPE v. Ontario (Minister of Labour),10 the Supreme Court reaffirmed that no executive discretion to make appointments can truly be ‘untrammeled’ in a parliamentary democracy governed by the rule of law,11 but at the same time concluded that only a ‘patently   [1997] 3 S.C.R. 3 at para. 140.   These legal requirements were recognized as constitutional imperatives in Valente v. The Queen, [1985] 2 S.C.R 673, and applied to the context of administrative tribunals in Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3.  9  See Ocean Port Hotel Ltd. v. British Columbia (General Manager, Liquor Control and Licensing Branch), [2001] S.C.C. 52. 10   [2003] S.C.C. 29. 11   This reference to the bounded nature of all executive discretion derives from the Supreme  7  8

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The puzzle of independence and parliamentary democracy  163 unreasonable’ exercise of an appointment power would attract judicial interference. A patently unreasonable appointment could be one based on ulterior motives or motivated by improper purposes, or as in CUPE v. Ontario (Minister of Labour), fail to consider necessary criteria (in that case, whether interest arbitration Chairs were drawn from a roster of neutral arbitration Chairs mutually agreed upon by management and labour). The Court observed that even if the discretion was framed in the broadest terms, it had to be interpreted as bounded by the purpose and objects advanced by the statute conferring the appointment power. That said, a judicial appointment had never been challenged on legal grounds in the past, much less one to the Supreme Court of Canada. The Supreme Court Act [sections 5 and 6] provides some minimum threshold requirements intended to guide appointments to that Court (including, principally, that all those appointed have at least ten years of experience as a lawyer in Canada) and further requirements where the judge is filling one of the three seats (out of nine) required to be from Quebec. While Justice Marc Nadon grew up in Quebec and practiced there for more than ten years, at the time of his appointment he was based outside Quebec as a Federal Court Judge, thus giving rise to a measure of ambiguity as to his eligibility. Almost immediately after the appointment was announced, a lawyer in Toronto announced he would bring a legal challenge to the appointment. Within two weeks, the provincial government in Quebec announced it would join the legal challenge. Faced with a looming crisis, the federal government issued a reference to the Supreme Court of Canada to provide an advisory opinion on the scope of the relevant sections of the Supreme Court Act which would determine the eligibility of the Nadon appointment. In so doing, the Supreme Court would opine not only on the proper scope of the appointment authority at issue, but also on the quasi-constitutional nature of such appointments. Although the legal challenge centred on Justice Nadon’s Quebec status, the broader issue was the subtext of partisanship accompanying the appointment. Justice Nadon’s best-known judgement was a dissent in the Federal Court of Appeal decision in the Omar Khadr case (Hopper 2014), in which Nadon took the government’s side in the most notorious disputes of the post 9/11 era.12 (The case involved the Canadian Government’s obligations to protect the rights of a Canadian who as a teenager was alleged to have killed a U.S. soldier in Afghanistan and was incarcerated in the U.S. facility at Guantanamo Bay.) Moreover Justice Nadon, while generally well-regarded, was seen as far less distinguished in his legal and judicial record than several other higher profile Quebec candidates (Hopper 2014). In a stark rebuke, the Supreme Court held Justice Nadon was ineligible for an appointment to the Supreme Court (Justice Michael Moldaver dissenting) and quashed the government’s appointment.13 The Nadon decision was one of a series of high profile losses for the government in the Court which rolled back key aspects of the government’s

Court’s decision in Roncarelli v. Duplessis, [1959] S.C.R. 121, often cited as the foundation for Canada’s Rule of Law doctrine. 12   [2009] F.C.A. 246. 13   [2014] 1 S.C.R. 433 (the ‘Nadon Reference’).

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164  Comparative administrative law agenda from mandatory minimum sentences to attempts to close down safe injection sites (Sossin 2014). On May 1, 2014, just as the drama over the Nadon judgment was subsiding, a National Post headline stated that, ‘Tories incensed with Supreme Court as some allege Chief Justice lobbied against Marc Nadon  appointment.’ John Ivison reported that ‘senior conservatives’ advised that Chief Justice Beverley McLachlin may have lobbied against Nadon’s appointment. Chief Justice McLachlin released a statement to the press: Given the potential impact on the Court, I wished to ensure that the government was aware of the eligibility issue. At no time did I express any opinion as to the merits of the eligibility issue. It is customary for Chief Justices to be consulted during the appointment process and there is nothing inappropriate in raising a potential issue affecting a future appointment.

The statement was hardly inflammatory, but nothing like it had ever transpired in Canada between a sitting Prime Minister and Chief Justice. The PMO issued its own statement claiming that the Minister ‘advised the Prime Minister that given the subject she wished to raise, taking a phone call from the Chief Justice would be inadvisable and inappropriate’. The opposition, and the legal community and many political observers were stunned by the allegations. In short, the Prime Minister had called into question the integrity of the Chief Justice of the Supreme Court while the Chief Justice had called into question the honesty of the Prime Minister. Ultimately, neither the Prime Minister nor the Chief Justice backed down. A new justice was appointed to the Court (a well-known appellate judge with no ties to the government or track record of supporting its priorities) and both the Chief Justice and Prime Minister moved on (albeit with lingering unease) to other priorities. As a clear reaction to these tensions, the Liberal Party made reform to the Supreme Court appointments process a key plank of their election platform, which committed the party, if elected, to ‘restoring dignity to the relationship between the government and the Supreme Court’ and ensuring that the process of appointing Supreme Court Justices was ‘transparent, inclusive, and accountable to all Canadians’. On October 21, 2015 Canadians elected a Liberal majority government headed by Justin Trudeau. The Trudeau Government announced a new process for appointments to the Supreme Court of Canada on August 2, 2016. Under this new process, candidates can nominate themselves or be nominated by a newly created ‘Advisory Board’. Although the government retains exclusive discretion to select the justices, it has constrained that discretion by committing to appoint only on the basis of a short list provided by the Advisory Board. The Advisory Board will provide the ‘nonbinding, merit-based’ recommendations of three to five qualified and ‘functionally bilingual’ candidates to the Prime Minister for consideration. The Advisory Board must ‘seek to support the Government of Canada’s intent to achieve a Supreme Court of Canada that is gender-balanced and reflects the diversity of members of Canadian society’. Once the Board recommends the short-listed candidates, it must explain how each candidate meets the publicly available criteria. Parliamentarians (through the House of Commons Standing Committee on Justice and Human Rights) will have opportunities to question the Minister of Justice and the Chair of the Advisory Board on the candidate ultimately selected, and get to know the candidate in a session moderated by a legal academic. Interestingly, the board is not required to recommend candidates from a particular

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The puzzle of independence and parliamentary democracy  165 region to replace an outgoing Supreme Court justice who is from that same region, as has been the norm. Despite this ambiguity, on October 28, 2016, following the process set out above, Justice Malcolm Rowe from Newfoundland was appointed to fill a vacancy created by the resignation of Justice Thomas Cromwell, also from the Atlantic region. The Nadon episode and its aftermath reflect both the absence of a consensus on ‘no-go zones’ for partisanship in Canada’s system of parliamentary democracy, and the desirability of some quasi-independent structure to buffer executive discretion over appointments from partisan politics. Three successive Canadian Governments (the Liberals under Prime Minister Martin, the Conservatives under Prime Minister Harper and now the Liberals again under Prime Minister Trudeau) each made substantial reforms to the Supreme Court appointment process, and each acted unfettered by the government it succeeded or by the constitutional guarantee of judicial independence. In other words, as salutary as the current changes might appear, or actually work out to be in practice, there remains no impediment to the next government simply sweeping them aside. These issues do not arise in a system of institutional constraints (as in the U.S. where the legislative branch constrains executive (Presidential) discretion) or in systems which have instituted buffer entities, as in the U.K. which moved to a Judicial Appointment Commission through the Constitutional Reform Act 2005 (which also covers appointments to certain administrative tribunals, discussed below). While a system of federal Judicial Advisory Committees function in Canada, they engage only in a screening to determine competent candidates and play no role in the actual judicial selection process (and can be altered by the federal government at any time, which occurred most recently in January 2017).14 B. The Curious Case of the Canadian Nuclear Safety Commission While most would agree that democratic politics requires courts as independent arbiters of social, economic and political disputes, recent events in Canadian politics ask whether or not that same logic applies to regulatory and adjudicative bodies like the Canadian Nuclear Safety Commission. Does the public care if the independence of these bodies, which are themselves extensions of the executive branch of government, is preserved? These bodies are expected to be impartial and objective and to act only to advance the legislative purposes for which they were created. Beyond this, where a government, acting with a public mandate, challenges the decision of an administrative body, acting in the public interest, where does the public good lie? Unlike public servants, the members of these independent bodies owe no duty of loyalty to the government, but at the same time they are funded by taxpayers and bound by a variety of governmental standards and policies. Although they may bridge the worlds of independent decision-making and government policy-making, the Court in Ocean Port was clear that administrative tribunals and executive agencies do not enjoy the constitutionally protected status of judicial independence. Unlike judges, who have security of tenure (until the age of 75), appointees to administrative bodies typically serve fixed terms as set out in their governing statutes. Ocean Port   (January 20, 2017) http://www.justice.gc.ca/eng/csj-sjc/scapq-pncsq.html.

14

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166  Comparative administrative law further stands for the proposition that such statutes may even provide for the appointment of adjudicators ‘at pleasure.’ These questions go to the very heart of the Canadian concept of separation of powers. Under the conventional view, the legislature makes laws, the executive applies laws and the judiciary interprets laws. That conventional view, however, misconstrues the executive as a monolithic whole. The executive is more properly understood, at least in Canada, as a web of constitutionally mediated relationships. The relationship between the political executive, represented by the Cabinet, and the civil service, for example, is mediated by the Constitutional convention of bureaucratic neutrality (Sossin 2005). Independent administrative bodies are similarly in a complicated relationship, both with the political executive and sometimes also with the civil service. In this sense, independent administrative bodies are neither an integrated part of a single executive whole, nor do they constitute a headless fourth branch of government unaccountable to the executive.15 As the case studies below suggest, the very uncertainty of the status of these bodies means that there are no clear mechanisms for resolving disputes with the government when they arise (other than mutual posturing, dueling interviews in the media and threats of litigation). Independence, it turns out, works remarkably well in Canada as long as supported by government and remarkably poorly when government support erodes. By far the most contentious and noteworthy incident of the Conservative Government’s interference occurred in January 2008 when Natural Resources Minister Gary Lunn removed Linda Keen as the head of the Canadian Nuclear Safety Commission (CNSC), Canada’s nuclear safety watchdog. Lunn justified Keen’s removal on the basis that she had lost the government’s confidence over the way she handled the shutdown of the medical isotope-producing nuclear reactor in Chalk River, Ontario, owned and operated by Atomic Energy of Canada Limited, a Crown corporation, in December 2007 (CBC News 2008). The CNSC ordered the reactor to close on November 18, 2007 over safety concerns that the emergency power system was not connected to cooling pumps, as required to prevent a meltdown during disasters such as earthquakes. The closure of the 50-year-old reactor, which generates two-thirds of the radioisotopes used around the world in medical procedures and tests, resulted in a worldwide shortage of the crucial medical material. In December 2007, the government resolved the medical crisis by using the legitimate instrument always available to government to interfere with independent administrative agencies: Parliament. On December 11, 2007 an emergency measure passed through the House of Commons that ordered the reactor to be restarted for a 120-day run as of December 16.16 Minister Lunn removed Keen as President of the CNSC on January 15, 2008, the day before she was scheduled to appear before the House of Commons’ Natural Resources Committee to offer her version of the events leading up to the shutdown of the reactor. 15   As Katrina Wyman put it: ‘The doctrine of tribunal independence is not concerned with establishing administrative tribunals as a fourth branch of government’ (Wyman 2001, 100). I have argued elsewhere that we ought to develop a distinct place for administrative justice in Canada’s legal and constitutional system (Sossin 2009). 16   Bill C-38, An Act to Permit the Resumption and Continuation of the Operation of the National Research Universal Reactor at Chalk River, 39th Parl. 2nd Session.

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The puzzle of independence and parliamentary democracy  167 Critics were quick to condemn the Minister’s decision as a blatant political maneuver aimed at silencing a federal employee’s criticism of a controversial government decision. For example, Liberal Member of Parliament David McGuinty accused the Conservatives of ‘U.S. Republican-style tactics’ by having Keen removed in the ‘dark of night,’ just hours before she was due to testify.17 Two weeks after her dismissal, Keen did testify in front of the Committee, stating that the safety risks arising from restarting the nuclear reactor were 1000 times greater than permitted by accepted international standards. She added that, although the decision to keep the facility closed may have precipitated a health crisis, such considerations were not under the purview of a nuclear regulator. Keen insisted that public safety was the only consideration the CNSC was legally allowed to consider vis-à-vis its decision to shut down the Chalk River reactor. The committee and the country heard the government’s contrary version of the applic­ able law loud and clear. Gary Lunn maintained that the extended shutdown of the reactor threatened a national and international health crisis. He characterized the issue as, literally, one of life and death (CBC News 2008). Additionally, comments by Conservative members of the Natural Resources Committee attempted to establish that it was within Keen’s mandate to consider the medical fallout of shutting down the reactor and therefore also isotope production. Although Keen remained a CNSC commissioner following her termination as President (she subsequently resigned in September of 2008), she challenged the g­ overnment’s action in court. In April of 2009, the Federal Court dismissed her claim, based largely on the Ocean Port argument, that the position of President of the CNSC is an ‘at pleasure’ appointment.18 The politics of independence, however, are unlikely to be resolved by judicial fiat, no matter who leaves the last courtroom vindicated. Although the Court addressed the issue of whether the government had the right to dismiss Keen, it sidestepped the broader and deeper question of whether the government was right to exercise this power, whether or not it possessed it. The decision to remove Linda Keen in the middle of her second five-year term as President threatened the independence of the CNSC and the integrity of independent administrative agencies and quasi-judicial tribunals generally. The government’s decision to reverse the CNSC’s shutdown order can be justified on public health grounds – however, the decision to remove Linda Keen was not necessary to ensure a steady supply of medical isotopes. This appeared to be payback (Reuters 2008; CBC News 2008). Following Keen’s removal, an assistant deputy minister within the Ministry of Industry was named interim president (Natural Resources Canada 2008). The fact that the government chose a civil servant who emerged from a culture of loyalty to the government of the day was telling. In my view, during the Chalk River dispute the legal and political system functioned as it should have, at least until the Minister took steps to terminate Keen as President for reaching a decision that the Minister did not like and did not believe was in the public interest. In December, 2007, the regulatory body reached a decision it believed was appropriate in light of its expertise in the field of nuclear safety and the non-compliance

 Ibid.  See Keen v. Canada (Attorney General) [2009] F.C. 353.

17 18

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168  Comparative administrative law of the Chalk River facility. The government stepped in to ensure its overriding public health concerns, and the global shortage in medical isotopes was addressed by recalling Parliament and winning support for reopening the facility. Parliament’s reopening of the facility was not political interference but rather an exercise in parliamentary sovereignty. The Minister’s subsequent attack on Keen, however, like Prime Minister Harper’s attack on the credibility of Chief Justice McLachlin, appeared rooted more in partisanship than public policy. And yet, in a final, ironic twist, the Chalk River facility was once again shut down indefinitely in May of 2009 due to safety concerns (CBC News 2009). This time, the decision was not the CNSC’s but the operational managers of the facility. The government then indicated that perhaps it was time for Canada to move out of the field of medical isotopes altogether. In a little-noticed press release issued in March of 2015, Canada announced the world’s oldest operating nuclear reactor in Chalk River would be shuttered for good in 2018.19

II. THE LEGAL AND POLITICAL CONTEXT OF INDEPENDENCE IN THE COMMON LAW WORLD What is meant by ‘independence’ in the context of administrative bodies or those who exercise executive discretion? These decision-making structures, after all, are created by legislative act in order to further policy ends. These decision-makers are not free to adopt the mandate they believe is most appropriate, but must discharge the responsibil­ ities provided to them by law in order to ensure democratic accountability. These bodies do not choose the people best able to carry out this mandate; rather, the executive makes appointments to these bodies, and in doing so is bound by the criteria set out in the bodies’ empowering statutes, and by whatever other criteria the government of the day deems appropriate, as supervised by the courts under the rule of law. Lastly, these bodies do not control free-standing budgets to meet their needs, but rather must make do with the resources that the government of the day (or, in some cases, the legislature) provides. As the case studies above demonstrate, however, the very idea of independence has been under siege in Canada. Although the politics of independence is apparent, the law governing constraints on the executive branch in this regard is uncertain at best. Judicial independence enjoys robust and constitutionally grounded protection, but it applies only to judges post-appointment and does not constrain the executive in exercising its discretion to appoint judges. Canadian administrative law hints at the nature and scope of independence rather than addressing it expressly. The point of departure for this jurisprudence, as indicated above, is the Supreme Court’s decision in Ocean Port. In the case, the Court affirmed that administrative bodies are not subject to the protections of judicial independence as a

19   Ian McLeod, ‘World’s Oldest Operating Nuclear Reactor, in Chalk River, to Close in 2018’ Ottawa Citizen (March 15, 2015) at http://ottawacitizen.com/news/politics/historic-nru-reac​ tor-to-close-in-2018.

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The puzzle of independence and parliamentary democracy  169 matter of constitutional law.20 Or, more accurately, those who are affected by the decisions of these administrative bodies do not have a constitutional right to an independent decision-maker, as do litigants who have their disputes adjudicated in courts. Independence, in other words, is a right enjoyed by parties, not adjudicators.21 The test for whether the requirements of independence are satisfied by a given dispute-resolution mechanism in Canada is closely related to the test for judicial impartiality – namely, would a reasonable person, who is informed of the relevant statutory provisions, their historical background and the traditions surrounding them, after viewing the matter realistically and practically, conclude that the tribunal or court is independent.22 The Supreme Court held that the common law principles of procedural fairness, which include a measure of independence for administrative bodies modeled on judicial independence,23 can be negated by a clearly worded statute; this is what occurred in the context of appointees to the adjudicator at issue in Ocean Port. The Supreme Court of Canada subsequently made a similar point in Bell Canada v. Canadian Telephone Employees Assn.24 The Court confirmed that ‘[t]he fact that the Tribunal functions in much the same way as a court suggests that it is appropriate for its members to have a high degree of independence from the executive branch’. But also that the independence of administrative bodies did not extend to immunity from direction from those bodies given delegated authority by Parliament. Specifically, the Court found that the Canadian Human Rights Tribunal could be bound by guidelines issued by the Canadian Human Rights Commission. Although the Commission was often a party of interest before the Tribunal, the Court found that the Commission’s power to issue guidelines to the Tribunal was part of the scheme expressly established by Parliament for elaborating human rights law. These cases, however, do not explore the issue of politically motivated interference with the decision-making of administrative bodies. Much of the appellate case law addressing political interference has concerned the issue of government attempts to remove or not reappoint members or leaders of independent administrative bodies. As in the Keen case, these disputes reflect the tension between the legitimate government direction for administrative tribunals, on the one hand, and illegitimate political interference, on the other. They also reflect the willingness of the Court to intercede on behalf of preserving the integrity of independent administrative bodies. In short, the law regarding the independence of administrative bodies in Canada remains unsettled, especially when viewed through the lens of peer jurisdictions in other parts of the common law world. Below I explore briefly the systemic approach adopted in common law parliamentary jurisdictions such as the U.K., Australia and New Zealand. In

20   An exception is an administrative body deemed to be making a decision which engages rights under the Canadian Charter of Rights and Freedoms, Canada’s constitutionally entrenched bill of rights. See Singh v. Canada, [1985] 1 S.C.R. 177. 21  See Mackin v. New Brunswick (Minister of Finance), [2002] S.C.C. 13. 22   Committee for Justice and Liberty v. National Energy Board, [1978] 1 S.C.R. 369 at 394 (De Grandpré J.). 23   The application of judicial independence to administrative bodies was established in Canadian Pacific v. Matsqui (SCC 1995) per Lamer C.J. 24   [2003] 1 S.C.R. 884.

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170  Comparative administrative law each case, political leadership led to systemic reform which appears to have had the effect of insulating tribunals from political interference more effectively than in the Canadian context. This is precisely the political leadership that Canada (at least so far) has lacked. A.  United Kingdom Although independence in dispute resolution was recognized in tribunals in the U.K. as early as the nineteenth century (Stebbings 2006, at 329), the issue first rose to political prominence over the course of the middle third of the twentieth century. The first instance was the 1932 Donoughmore Report, which focused on delegated legislation and judicial or quasi-judicial decision-making made by appointees of the Crown (Report of the Committee on Ministers’ Powers 1932; Williams 1982). The report arose amid growing concerns regarding the power of government departments and the perception of increasing arbitrariness in executive decision-making (Williams 1982, at 278–9). The second indepth review of the system of administrative justice in England and Wales was the Franks Report of 1957 (Franks 1957). Although it entailed an extensive study of administrative tribunals, its focus was on the process of decision-making in tribunals and the values of openness, fairness, and impartiality. The Franks Committee arose in the aftermath of the Crichel Down Affair, a British political scandal that raised concerns regarding maladministration (Griffith 1955). Ultimately, however, it was only in the Report of the Leggatt Review of Tribunals in 2001 that the independence of tribunals was finally brought into the limelight in a substantive way (Leggatt 2001, at para. 2.1). Part of the Leggatt Review mandate was to examine ‘[t]he administrative and practical arrangements for supporting those decisionmaking procedures meet the requirements of the European Convention on Human Rights (ECHR) for independence and impartiality’. Thus, the terms of reference for the Leggatt Review itself established that the fate of tribunals in the U.K. would be tied to the ­administrative law of Europe. Article 6 of the ECHR states in part: (1) In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.

Article 6(1) provides that the tribunal must also be ‘independent’. Independence requires that decision-making bodies be free to exercise their powers without interference from the state’s executive or legislature or from the parties to the dispute. In the seminal case of Campbell and Fell,25 the European Court of Human Rights (ECtHR) sought to determine whether a prison’s ‘Board of Visitors’, charged with supervising the administration of a prison and adjudicating prisoners’ alleged violations of prison regulations, was independent. In determining whether a tribunal is independent, the ECtHR held that three criteria were relevant: the manner of appointment of the tribunal’s members and their term of office; the existence of guarantees against outside pressure; and whether the tribunal presents an appearance of independence. In turning to the facts of the case, the 25   Campbell and Fell v. UK (1985) 7 E.H.R.R. 165 (EctHR Appeal nº 7819/77;7878/77) [hereinafter ‘Campbell and Fell’].

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The puzzle of independence and parliamentary democracy  171 Court observed that the fact that tribunal members are appointed by the executive does not deprive them of independence. The executive can even provide them with guidelines regarding the performance of their functions without imperiling their independence as long as they are not subject to instructions in their adjudicatory role. While the threeyear term of members of the Board of Visitors in Campbell and Fell was relatively short, the Court made allowance for the fact that they were unpaid, and might refuse longer appointments.26 The fact that the executive may not remove judges during their term of office is generally a corollary of independence as it is understood within the meaning of Article 6(1) of the ECHR. Formal recognition in a statute or regulation that tribunal members are not removable is the strongest indicia of independence. In the absence of formal guarantees of independence, such as security of tenure, the Court examines whether these guarantees are recognized in practice and whether other guarantees are present. A tribunal may still be regarded as independent provided its members are irremovable in practice.27 In Campbell and Fell, the board’s independence was not threatened by the Home Secretary’s power to require board members to resign because, in practice, he could only exercise it in exceptional circumstances. The presence of additional guarantees against outside pressure played a crucial role in the European Court’s assessment of the independence of military tribunals in the U.K. In Morris v. United Kingdom,28 the permanent president of the Court Martial, appointed for a four-year term to serve on panels with an independent judge advocate and two serving officers, did not enjoy formal security of tenure. However, the European Court found that the permanent president’s presence on the Court Martial did not call into question its independence for several reasons: permanent presidents had never been removed from office and thus enjoyed de facto security of tenure; officers accepted the position of permanent president as the last appointment of their careers, which meant that they could not be influenced by any reports and promotions concerns; and permanent presidents worked outside the chain of command.29 In contrast to the permanent president of the Court Martial, serving officers were appointed on an ad hoc basis for individual proceedings. Relatively junior officers with no legal training, they remained subject to army discipline and reports and were not protected by statute from external army influence while hearing a case. Despite rules governing their selection, the requirement that they swear an oath promising impartiality, the right of the accused to object to any member of the Court Martial, the confidentiality of deliberations, and the rule that the most junior members expressed their view on verdict and sentence first, the Court found that there were insufficient safeguards against outside pressure being brought to bear on serving officers.30 These officers were exposed to outside pressure that jeopardized their i­ndependence

26   Campbell and Fell, ibid. at 199, paras 79–80. But see Belilos v. Switzerland (1988), 10 E.H.R.R. 466, where the Court determined that a complainant before a police board could legitim­ ately doubt the board’s independence and organizational impartiality because it consisted of a single member, a municipal civil servant likely to return to other departmental duties. 27   Campbell and Fell, ibid. at para. 80. 28   (2002) 34 E.H.R.R. 52 [hereinafter Morris]. 29   Morris, ibid. at paras 68–69. 30   Ibid., at para. 72.

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172  Comparative administrative law because they belonged to the army, which takes its orders from the executive, and more importantly because they were subject to military discipline and assessment reports that impacted on their careers. The ECtHR revisited this decision in Cooper v. United Kingdom,31 which dealt with the Royal Air Force Court Martial. Considering additional safeguards newly disclosed by the U.K., the Court was satisfied the independence of the ordinary members of the Court Martial (equivalent to the serving officers in Morris) was sufficiently protected. The most important safeguard was the distribution by the Court Martial Administration Unit of training material to the members of the Court Martial. Briefing notes provided the ordinary members a step-by-step guide to Court Martial procedures, their role in the proceedings and those of the Judge Advocate and Permanent President. Most import­ antly, the briefing notes underlined the importance of independent decision-making. As the Court described: these instructions served not only to bring home to the members the vital importance of independence but also to provide a significant impediment to any inappropriate pressure being brought to bear.32

Finally, the Court noted that Court Martial members were prohibited from disclosing any opinion expressed or vote cast during court martial proceedings, a fact which effectively prevented the ordinary officers’ superiors from subjecting their performance to assessment reports.33 This European case law, drawn from disputes arising in the U.K., thus framed the Leggatt Review’s mandate on the values of independence, coherence, and accessibility. It was particularly responsive to a general sense that tribunals were not perceived as independent by making recommendations with respect to: (a) the appointment process of tribunal members; (b) the role of government departments in providing administrative support and funding to tribunals tasked with reviewing those departments’ decisions; and (c) institutional separation (Cane 2009, at 109). The thrust of the report was that tribunals should be treated as courts are in terms of their independence. Thus, its recommendations included that the appointment process for tribunal members should be the same as for judges, that the array of tribunals be amalgamated into one general tribunal, and that the tribunal be integrated with the court system. The response to the Leggatt Review’s recommendations was a law reform initiative, leading to the Tribunals, Courts and Enforcement Act 2007,34 which in effect judicialized tribunals in the U.K. The Tribunals Act created a First–tier Tribunal and an Upper Tribunal, each divided into various chambers, into which most existing tribunal jurisdictions were transferred over the course of 2009 and 2010. In addition, a Tribunals Service was created in 2006 as an executive agency of the Ministry of Justice and was mandated with establishing a unified administration for the tribunals system. Finally, the legally-

  (2003) 39 E.H.R.R. 8.   Ibid., at para. 124. 33   Ibid., at para. 125. See also Incal v. Turkey (1998) 29 E.H.R.R. 449 at para. 68; Çiraklar v. Turkey (2001) 32 E.H.R.R. 23 at para. 39. 34   (UK), 2007, c. 15 [Tribunals Act]. 31 32

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The puzzle of independence and parliamentary democracy  173 qualified members of tribunals were made into judges and other judicial office-holders were made into tribunal members. I have suggested Canada has much to learn from the U.K. experience in viewing tribunals as part of an administrative justice system, rather than a disparate collection of arm’s length administrative bodies (Sossin 2011). At the same time, the Administrative Justice and Tribunal Council (AJTC) was with three functions: ●

to keep under review the overall administrative justice system in the U.K.; to keep under review and report on the constitution and workings of designated tribunals; and ● keep under review and report on the constitution and working of statutory inquiries. ●

The AJTC was abolished in 2013 because it was seen to duplicate the work of ministerial departments, striking a blow to the idea of ‘independent oversight’ (Kenny 2015) and making clear that the progress of the administrative justice system is anything but linear (Mason 2016). The U.K. experience with judicial appointment reform has been more concerted and has attracted broader support. The U.K. has engaged in arguably the most dramatic reformation of judicial appointments anywhere in the common law world. With the Constitutional Reform Act, 2005, the U.K. brought to an end the ability of the executive branch to control the judicial appointments process in England and Wales for all but the most senior positions. As Joanna Harrington wrote at the time of the contretemps between Prime Minister Harper and Chief Justice McLachlin, ‘There’s a lesson in here for Canada’ (Harrington 2015). The U.K. established an independent body for the appointment of judges and tribunal members to ensure that those holding judicial office are selected solely on the basis of merit, through a fair and open competition. The members of the Judicial Appointments Commission are themselves selected through open competition, other than the three members from the judiciary. The Commission does more than screen candidates for competence – it engages in interviews, role-playing and ultimately recommends just one candidate for each vacancy (which the Minister can accept or reject, or seek Commission reconsideration). As noted above, Canada requires a minimum of ten years at the bar to be a judge. In the U.K reforms, the time period post-qualification has been reduced to seven years (five years for the District Court). The desire for diversity has been a motivating factor, premised on the aspiration that judicial officers should reflect the public they serve. This means the appointment of women judges, as well as judges from ethnic minorities (what are known in England as BAME appointments to increase judges from black, Asian, minority ethnic communities) and judges from varied professional backgrounds (including legal academics), and indeed, the appointment of a number of High Court judges under the age of 50. Remarkably, over this same period, Canada – an immigration country of far greater multicultural diversity – witnessed a period in which 98 of 100 federal judicial appointments over the period 2009–12 were white (Makin 2012). A study analyzing judicial appointments over the period 2012–14 found over two-thirds of the 107 appointments were male and only one candidate was identified as racialized. As the U.K.’s House of Lords Select Committee on the Constitution concluded in its

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174  Comparative administrative law 2012 report, there is a clear link between judicial independence and the retention of public confidence in the justice system. The cross-party body recommended against the use of pre- and post-appointment hearings for senior judicial appointments for fear partisanship would inevitably inform both the selection of parliamentarians to sit on the relevant committees or panels, and the choice of questions to be asked. B. Australia As in Canada, the challenge in Australia is how to stake out meaningful independence when the oversight body is part of the executive branch of the government it is overseeing (Fleming 2009, at 90). Australia is a federation made up of a Commonwealth government and separate governments in Australia’s states and territories. Government at the federal or Commonwealth level is characterized by a strict separation of powers, between the legislature, the executive and the judiciary, imposed by the Constitution, which is less prominent in the context of state governments. At the federal Commonwealth level, executive tribunals cannot exercise judicial power. The distinction leads to a simple, but very important, consequence for tribunals. Not being courts, tribunals cannot exercise the judicial power of the Commonwealth. Courts are bodies that can enforce their judgments and are made up of judges with tenure to a retirement age imposed by the Constitution. Tribunals do not generally satisfy these tests. Judicial power is the power to determine disputes between parties, both public and private. Australia’s analogue to the UK’s Franks study was the report published by the Kerr Committee in 1971 (Kerr 1971). The major features of the Australian system of administrative review derive largely from the Kerr Committee’s recommendations (Administrative Review Council 1971, at 4.9). These include: (a) the framework for judicial review;35 (b) the Administrative Appeals Tribunal (AAT), which provides independent merits review of administrative decisions;36 (c) the Ombudsman, which investigates and resolves complaints about Government departments and agencies;37 and (d) the Administrative Review Council (ARC), which advises the Australian Attorney General on strategic and operational matters relating to administrative law.38 Unlike the Franks Report in the U.K., however, the Kerr Committee took the view that complete independence of the administrative review system was not necessary (Kerr 1971, at para. 321). Thus, for example, it recommended that tribunal panels could include a member of the body whose decision was being reviewed (Kerr 1971, at para. 292). Australia has taken a generally different approach to tribunal independence relative to the U.K. In Better Decisions, a 1995 ARC review of Commonwealth merits review tribunals initiated at the behest of the Minister for Justice, the council stressed that tribunals are distinct from courts in both form and function (Administrative Review Council 1971, at 4.2). While tribunals were acknowledged as engaging many of the same issues with   As implemented through the Administrative Decisions (Judicial Review) Act 1977 (Cth.).   See the Administrative Appeals Tribunal Act 1975 (Cth.). 37   See the Ombusdman Act 1976 (Cth.). 38   While the ARC remains in existence, it has lost its secretariat and had its functional capacity reduced in recent years. 35 36

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The puzzle of independence and parliamentary democracy  175 respect to independence, such as the importance of ensuring that there is no perception – nor reality – of undue influence, the processes of guaranteeing that independence could reasonably differ. Thus, the independence of tribunal members would not require the salary and tenure protections that attach to the judiciary (Administrative Review Council 1971, at 4.6). Similarly, the ARC was untroubled by performance monitoring with respect to the quality of reasoning or the timeliness of decision-making, and the involvement of the relevant minister in making appointments to the various specialist divisions.39 In line with its variegated approach to independence between tribunals and courts, the Australian system also applies different standards among tribunals. While the AAT enjoys strong independence protections, that is not necessarily the case for specialist tribunals. Peter Cane, in his definitive work on the topic, points to the fact that AAT members can be appointed for longer periods, the AAT operates at a greater distance from the executive, it has its own constitutive legislation, and is administered by the Attorney General rather than whomever the relevant minister happens to be (Cane 2009, at 111). Cane finds these double standards puzzling, since a relaxed independence requirement does not naturally follow from a characterization of the tribunals’ function as merits review (Cane 2009, at 112). If they are meant to provide an external means of vindicating the concerns of individuals, rather than simply a mechanism for internal policy review, it seems unclear why the independence of their members should not always be protected vigorously. Although the Australian approach to the independence of tribunals has resulted in fewer of the types of confrontations discussed above in the case studies, Australia boasts cautionary tales of its own. For example, in December of 1996, the Refugee Review Tribunal held against the arguments of the now-Department of Immigration and Citizenship, and approved the claims of two women seeking asylum on the basis of a claim that their respective home governments had been unwilling or unable to prevent spousal abuse at the hands of their husbands (Legomsky 1988, at 248–9). The Minister heading the department responded with public criticism of the tribunal members and later denied reappointment to 16 of 35 members who applied for reappointment in 1997. Arguably as a consequence of a threatening atmosphere, the set-aside rate of department decisions under review fell from around 17 percent to 2.7 percent (Legomsky 1988, at 249–50). Generally, Australia has avoided the anxiety around the role of administrative tribunals faced in other common law jurisdictions (and which is perhaps most pronounced in Canada) (Ellis 2013, Mason 2016). Australia locates its tribunals firmly in the executive sphere (as in Canada, but in contrast to the U.K.), but tensions surrounding the independence of adjudicative tribunals appear rare. Is this purely a function of political buy-in from the governments of the day in Australia? The Kerr Report seemed to have set in motion legislative and policy change that reframed the government’s approach to administrative tribunals. The Kerr Commission itself was a product of political leadership, and was a response to the perceived inadequacy of judicial review to provide oversight over the machinery of the regulatory state. This is precisely the kind of leadership, I would suggest, that Canada has lacked.

  It did, however, object to monitoring review outcomes and performance-based pay.

39

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176  Comparative administrative law C.  New Zealand Developments in New Zealand’s administrative tribunal system have largely tracked those in the U.K. In 2004, New Zealand’s Law Commission published Delivering Justice for All, the culmination of a three-stage inquiry into the structure, jurisdiction and processes of New Zealand’s system of courts and tribunals. In the report, the commission recommended establishing a judicially-led, independent and unified tribunal framework that would exist at the same level as a Primary Court (N.Z. Law Commission 2004, at 284). It suggested that this would address concerns regarding standing, competence, authority, and independence. As had been identified in Australia and the U.K., New Zealand had an unnecessarily great diversity of tribunals, many of which were staffed by inexperienced tribunal members meeting infrequently and dependent on the resources of the departments whose decisions they were mandated to review. By rationalizing the roster of tribunals, the Law Commission hoped to build up a core of experienced tribunal members within a unified tribunal system (N.Z. Law Commission 2004, at 284–5). This structure would be led by a judge and protected from outside interference by handing over responsibility for all tribunal administration to the Ministry of Justice. Appeals from the tribunal structure would go to an appellate panel and from there to a full bench of the High Court. The Government of New Zealand presented a response to the Law Commission’s report to the House of Representatives where it accepted the need to establish a unified tribunal framework administered by the Ministry of Justice (N.Z. Government 2004). While the government was unwilling to commit to sweeping changes in the administration and operation of tribunals without first developing a set of guidelines to assist in a transition, the factors it directed the Ministry of Justice to take into account were notable in their inclusion of independent decision-making. This process has resulted in the establishment of a Tribunal Reform Program, which released ‘Tribunals in New Zealand, the Government’s Preferred Approach to Reform Public Consultation Document’ in July 2008 in order to seek agreement on the program’s scope and direction (N.Z. Government 2008). Key components of the preferred approach include the implementation of a new legislative framework and the establishment of a unified Tribunals Service located within the courts’ structure, on the same level as a District Court, headed by a Principal Judge, and administered by the Ministry of Justice. Through judicial oversight, separation, and a neutral administration, the new tribunal structure would enjoy significant systemic and structural protections to its independence. New Zealand’s commitment to a systemic approach has not completely removed the specter of political interference from administrative tribunals. In January of 2008, New Zealand’s Energy Minister was ‘in the firing line’ following allegations he had interfered with the decision of the Electricity Commission in order to speed up approvals of new transmission lines to Auckland (Fisher 2008). A residence group alleged bias on the part of the Minister and the matter proceeded to judicial review. In its decision, the High Court of New Zealand, Justice Wild reached the following conclusion: I accept that a lay observer would interpret this [interfence by the Minister] as the Government putting pressure on the Commission . . ..I do not accept that the same observer would go the further step of interpreting this as indicating bias on the part of the Commission. Pressuring

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The puzzle of independence and parliamentary democracy  177 the Commission to expedite its process is not the same thing as pressuring the Commission to accept a particular outcome, leading to an apprehension of bias.40

This kind of case demonstrates that even progressive measures to protect and promote the independence of tribunals cannot shelter tribunals from the political storm. In New Zealand, as in the U.K., little attention has been paid to a distinctly administrative justice approach to independence, but rather, the concept of judicial independence has been applied to tribunals as well as courts. As the 2015 New Zealand Ministry of Justice publication ‘Tribunal Guidelines’ observes, ‘Judicial independence is a fundamental principle of New Zealand’s constitutional system, and this principle extends to tribunal members. As judicial officers, they must be free to make decisions without external interference, particularly from the executive branch of government’ (NZ ‘Tribunal Guidelines’). New Zealand has joined with other jurisdictions in endorsing the Council of Australasian Tribunal’s ‘International Framework for Tribunal Excellence’ (COAT Framework) which proposes the following criteria – or conditions – for independence in the context of dispute resolution tribunals: ●

● ● ●

● ● ● ● ●

the tribunal is created by statute; the tribunal is an independent body with its own parliamentary appropriation and is responsible for its own budget and expenditure; the tribunal controls its premises and has secure and sufficient funds to ensure provision of resources, facilities and services it needs to perform its functions; the tribunal chair has input into budget allocation and control. They also have statutory powers to direct the tribunal’s case management system (e.g., issue practice directions), assign cases, decide appointment panels and administer the tribunal; the tribunal chair has input into decisions about facilities and services such as IT, security, personnel and hearing rooms; members are appointed on their merits, with the tribunal chair involved in any interview panel; the tribunal chair is involved in the appointment of the tribunal registrar or manager; the tribunal is free to apply or depart from government policy when reviewing a decision in accordance with common law; there is a statutory provision preventing a Minister or executive officer from overruling or altering a decision of the tribunal.

Although the COAT Framework has generated attention in Canada and elsewhere in the common law world, there remains no overarching and shared understanding of independence in the administrative justice context. What are the common themes linking Canada’s peer common law jurisdictions? In my view, there are at least two that together explain why so many of our colleagues elsewhere, when told about the Canadian controversies 40  See New Energy Era Inc. v. The Electricity Commission, HC WN CIV 2007-485-002774 4 May 2009 at paras 88–89.

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178  Comparative administrative law discussed above, would assert ‘that would never happen here!’ First, in the common law jurisdictions outside of Canada, governments have approached administrative justice as a system. Tribunals, for example, enjoy a certain minimum set of appointment standards, among other indicia of independence. Thus, appointments ‘at pleasure’, as in the CNSC case, likely would not be acceptable in other common law jurisdictions. The second and related trend is to treat administrative justice as a policy sphere, and one appropriate for independent review and recommendations, as in the case of the Leggatt Review or the New Zealand Law Commission’s Report and subsequent ‘Tribunal Guidelines’. In my view, Canada’s checkered record of assuring the independence of tribunals may be explained, in part, by the absence of these dynamics. The exercise of ministerial discretion is even less coordinated and coherent – and remains subject to only the thinnest of shared understandings of the constraints imposed by the rule of law and the boundaries of statutory authority.

CONCLUSIONS The discussion above raises the broader question, in Canada and throughout the common law world, of how to demarcate a sustainable boundary between a government’s desire to achieve its policy objectives and independent decision-making. One view of the recent disputes during the Harper Government in Canada is that it is ultimately self-defeating for government to attack independent agencies, or to politicize the Court. Partisanship begets more partisanship. The result is public cynicism, a corrosion of parliamentary democracy, and the undermining of the policy goals that motivated the establishment of independent agencies in the first place. As Gabriel Fleming has observed: ‘The power to depart from government policy is central to a discussion of the independence of tribunals’ (Fleming 2009). If governments want the longer-term benefits of a system of administrative justice, they must be prepared to live with the short-term costs. The other view of the recent disputes in Canada is that the government used the power at its disposal to achieve its objectives, and this will embolden other governments to do the same. To the extent the firing of Keen generated negative press or awkward moments during Question Period, this storm lasted only a few news cycles and may soon be forgotten. Both Prime Minister Harper and Chief Justice McLachlin continued to play their respective roles long after the dueling press releases. To the extent there is a negative assessment of the government’s partisanship, it usually occurs in hindsight, often when a new government looks to chart a different course of policy, as evidenced by the implicit critique of the Harper policies in the Liberal 2015 platform, and the Trudeau Government’s recent reform to Supreme Court appointments. The recent confrontations show that there is little to compel Canadian Governments to constrain their discretion to make appointments based on partisan motivations or to respect the independence of administrative agencies if they do not want to do so. These controversies reveal the hard but important truth about independence in administrative decision-making in a parliamentary democracy: while the rule of law and principles of fairness and impartiality may require independence, only political leadership can sustain it. Political leadership created independent agencies in order to ensure that important areas of the public interest (such as regulating nuclear power) are served by people and

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The puzzle of independence and parliamentary democracy  179 institutions that are not caught up in partisan politics. As the experience of other common law jurisdictions makes clear, it takes political leadership and a systemic approach to administrative justice to safeguard the boundaries of partisanship and ensure that administrative bodies are free to operate without fear of political repercussions for decisions that do not accord with the policies of particular governments. Canada’s current government came to power, at least in part, as a reaction to the decade of partisanship discussed in this chapter. The current government’s commitment both during the election and subsequently to usher in a new era of respect for the independence of executive appointments and administrative bodies is noteworthy. The question remains whether a government in a common law, parliamentary democracy can institute the kind of legal and political reform that leads to structures of independence (e.g., buffer organizations such as appointment commissions or tribunal services) intended to and capable of binding future governments with differing partisan commitments.

REFERENCES Administrative Justice Office. 2002 ‘On Balance: Guiding Principles for Administrative Justice Reform in British Columbia’ at http://www.gov.bc.ca/ajo/down/white_paper.pdf (Accessed December 30, 2009). Administrative Review Council. 1971 Better Decisions: Review of Commonwealth Merits Review Tribunals Canberra: Australian Government Publishing Service. Cairns Way, Rosemary. 2014 Deliberate Disregard: Judicial Appointments under the Harper Government 67 Supreme Court Law Review at http://sclr.journals.yorku.ca/index.php/sclr/article/view/39263 (Accessed March 28, 2017). Cane, Peter. 2009 Administrative Tribunals and Adjudication Oxford: Hart Publishing. Canadian Press. 2009 ‘Government won’t reappoint Chair of Military watchdog’ (October 14, 2009) at http:// www.cbc.ca/canada/story/2009/10/04/militarywatchdog-tinsley.html (Accessed December 30, 2009). CBC News. 2008 ‘Nuclear safety watchdog head fired for “lack of leadership”: minister,’ (January 16, 2008) at http://www.cbc.ca/canada/story/2008/01/16/keen-firing.html (Accessed December 30, 2009). CBC News. 2009 ‘Isotope Shortage Looms as Chalk River Reactor Closes Down Again’ (May 19, 2009) at http:// www.cbc.ca/canada/story/2009/05/18/isotopes-chalk-river.html (Accessed December 30, 2009). Council of Australasian Tribunals (COAT) International Framework for Tribunal Excellence (2014) at http:// www.coat.gov.au/images/downloads/INTL%20COAT%20FRAMEWK%20TRIB%20April%202014.pdf (Accessed March 28, 2017). Ellis, Ron. 2013 Unjust by Design: Canada’s Administrative Justice System Vancouver, UBC Press. Fisher, David. 2008 ‘Minister in the Firing Line over Pylons’ (January 13, 2008) New Zealand Herald, at http:// www.nzherald.co.nz/electricity-commission/news/article.cfm?o_id5600625&objectid510486542 (Accessed March 28, 2017). Fleming, Gabriel. 2009 ‘Tribunals in Australia: How to Achieve Independence’ in Robin Creyke (ed.), Tribunals in the Common Law World Toronto: Irwin. Franks, Oliver. 1957 Report of the Committee on Administrative Tribunals and Enquiries London: Her Majesty’s Stationery Office. Griffith, JAG. 1955 ‘The Crichel Down Affair’ Modern Law Review 18: 557. Harrington, Joanna. 2015 ‘From the U.K., A Lesson Judicial Appointments’ (July 29, 2015) Globe and Mail at http://www.theglobeandmail.com/opinion/from-the-uk-a-lesson-for-canada/article25733842/ (Accessed March 28, 2017). Hopper Tristan. 2014 ‘Marc Nadon caught Stephen Harper’s attention with dissent Khadr ruling in  2009’ National Post (March 21, 2014) at http://news.nationalpost.com/news/canada/canadian-politics/marc-nadoncaught-stephen-harpers-attention-with-dissent-khadr-ruling-in-2009 (Accessed March 28, 2017). Jacobs, Laverne. 2013 ‘Independence, Impartiality and Bias’ in Colleen Flood and Lorne Sossin (eds.), 2nd edition Administrative Law in Context Toronto: Emond Montgomery. Kenny, Justice Susan. 2015 ‘The Administrative Review Council and Transformative Reform’ in Connelly and Stewart Public Law in the Age of Statutes, The Federation Press. Kerr, John. 1971 Report of the Commonwealth Administrative Review Committee Canberra: Australian Government Publishing Service.

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180  Comparative administrative law Lawrence, Sonia. 2014 ‘2013: Constitutional Cases in Review’ Supreme Court Law Review 67: 3. Leggatt, Andrew. 2001 Tribunals for Users: One System, One Service London: Her Majesty’s Stationery Office. Legomsky, Stephen H. 1988 ‘Refugees, Administrative Tribunals, and Real Independence: Dangers Ahead for Australia’ Washington University Law Quarterly 76: 243. Makin, Kirk. 2012 ‘Of 100 new federally appointed judges, 98 are white, Globe finds’ (April 17, 2012) at http:// www.theglobeandmail.com/news/politics/of-100-new-federally-appointed-judges-98-are-white-globefinds/ article4101504/ (Accessed March 28, 2017). Mason, Hon Sir Anthony, ‘The Pursuit of Excellence in Tribunal Decision-Making in Australia, The United Kingdom and Canada’ (2016) Canadian Administrative Law and Practice (forthcoming). Natural Resources Canada. 2008 Press Release at http://www.nrcan-rncan.gc.ca/media/newcom/2008/200830eng.php (Accessed December 30, 2009). N.Z. Government (Ministry of Justice) ‘Tribunal Guidelines’ (2015) http://www.justice.govt.nz/publications/ global-publications/t/tribunal-guidelines/part-2-equipping-tribunals-to-operate-effectively/maintainingindependence (Accessed March 28, 2017). N.Z. Government. 2008 ‘Tribunals in New Zealand, the Government’s Preferred Approach to Reform Public Consultation Document’, July 2008, online: Ministry of Justice http://www.justice.govt.nz/publications/ global-publications/t/tribunal-reform-programme-october-2007/publication (Accessed December 30, 2009). N.Z. Government. 2004 ‘Government Response to Law Commission Report on Delivering Justice for All,’ August 2004, http://www.justice.govt.nz/publications/global-publications/g/government-response-to-law-com​ mission-re​port-on-delivering-just​ice-for-all-au​gust-2004 (Accessed December 30, 2009). Ratushny, Edward. 1990  ‘Canadian Bar Association Task Force Report’ The Independence of Federal Administrative Tribunals and Agencies in Canada Ottawa: Canadian Bar Association. Reuters. 2008 http://www.canada.com/ottawacitizen/news/story.html?id5c1bb5ff1-7e5a-4d47-8568-f4d0818c7​ f31&k586236 (Accessed December 30, 2009). Sharpe, Robert. 2010 ‘Crisis in Pakistan’ in Adam Dodek and Lorne Sossin (eds), The Future of Judicial Independence Toronto: Irwin. Sossin, Lorne. 2014 ‘Court Dismissed’ (December 18, 2014) The Walrus at https://thewalrus.ca/court-dismissed/ (Accessed March 28, 2017). Sossin, Lorne. 2011 ‘Reflections on the UK Tribunal Reform from a Canadian Perspective’ 24 Canadian Journal of Adminastrative Law & Practice 17. Sossin, Lorne. 2009 ‘The Ambivalence of Administrative Justice in Canada: Does Canada Need a Fourth Branch?’ Supreme Court Law Review 46: 51–75. Sossin, Lorne. 2008 ‘Does Independence Matter?’ Literary Review of Canada 16:3. Sossin, Lorne. 2005 ‘The Ambivalence of Executive Power in Canada’ in Adam Tomkins and Paul Craig (eds), The Executive and Public Law: Power and Accountability in Comparative Perspective Oxford: Oxford University Press. Stebbings, Chantal. 2006 Legal Foundations of Tribunals in Nineteenth Century England Cambridge: Cambridge University Press. Report of the Committee on Minister’s Powers (London: Her Majesty’s Stationery Office, 1932). Williams, DGT. 1982 ‘The Donoughmore Report in Retrospect’ Public Administration 60: 273. Wood, J. 2008 ‘Terminated’ The Star-Phoenix, March 6, 2008. Wyman, Katrina. 2001 ‘The Independence of Tribunals in an Era of Ever Expanding Judicial Independence’ Canadian Journal of Administrative.Law and Practice 14: 61.

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11.  Assessing the theory of presidential dominance: empirical evidence of the relationship between the executive branch and regulatory agencies in Brazil Mariana Mota Prado

In my earlier contribution to this volume (Prado 2010), I argued that Latin American independent regulatory agencies (IRAs) operate within presidential systems that differ significantly from the U.S. system.1 Using Brazil as a case study, I hypothesized that the Brazilian President is substantially more powerful vis-à-vis the Brazilian Congress than the White House is vis-à-vis the American Congress.2 As a consequence, if one used the principal-agent framework to analyze Brazilian IRAs, there are strong reasons to believe that they are controlled by the President (i.e., the President is the principal). In contrast, many American scholars subscribe to the ‘theory of congressional dominance’ to describe Congress as the branch of the government acting as the principal of these agents, IRAs. Borrowing the same terminology, I concluded that a ‘theory of presidential dominance’ is better suited to describe the interaction between the government and the regulatory agencies in Brazil. My earlier contribution can be described as exploring the ‘varieties of presidentialism’ under which regulatory agencies may operate and it was divided into two parts. First, I engaged in a descriptive exercise to determine which branch of the government exerts most control or influence over regulatory agencies. This is the primary question addressed by the theories of congressional and presidential dominance. In the second part, I turned to a normative debate: who should control regulatory agencies? Here, again, I identified a significant difference between the United States and Brazil. In the U.S., in light of a constitution that is silent on this matter, there is a heated debate about the constitutional legitimacy of the political control of agencies. ‘The unitary executive’ thesis suggests that, despite the fact that Congress created some agencies independent of the President, these agencies, nevertheless, should be under presidential control. In contrast, other U.S. scholars argue that Congress has the authority to choose, and therefore it can either delegate powers to the executive branch or to independent agencies. Unlike the U.S., the Brazilian constitution explicitly places the entire bureaucracy within the executive branch, under the control of the President. As a consequence, the normative legal-constitutional debate in Brazil is not focused on which branch of the government controls agencies, but it is 1   See Ackerman in this volume (arguing that the distinction between presidential and parliamentary systems is more relevant to administrative law than the distinction between common law and civil law). Building on this assumption, I argued that it was also relevant to differentiate presidential systems. See Limongi (2005). 2   At the time of this writing, the Brazilian President was facing the prospect of being impeached. The impeachment, however, does not challenge the academic literature supporting the idea that the Brazilian President is one of the most powerful in the world (Melo 2016, 55–6).

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182  Comparative administrative law instead concerned with the level of presidential influence over agencies that is constitutionally legitimate. This chapter builds on these earlier contributions to propose the idea of ‘varieties of regulatory state’. On the descriptive front, there is now empirical evidence to support my hypothesis of ‘presidential dominance’. Data shows that presidential interference has increased and the independence of regulatory agencies has fallen over time in Brazil (Silva 2011). The first two parts of this chapter ask how and why this has happened. As to the how question, some of the predictions of my earlier contribution to this volume have proved correct: flawed mechanisms failed to guarantee agency’s insulation from presidential influence. However, a series of other mechanisms – not identified in my previous analysis – have been employed to further reduce the independence of these agencies. I discuss these in the first part of this chapter. In the second part, I turn to the why question. Silva (2011) shows that political interference by the president in regulatory agencies has varied from sector to sector and over time. She offers an interesting hypothesis to explain this variation, based on a complex cost-benefit analysis by the President. According to this hypothesis, the President would take into account institutional constraints, his or her own preferences, and the impact on sectoral investment. While very insightful, I believe that Silva’s hypothesis fails to explain why this has happened in Brazil starting in 2002, with the election of President Luiz Inácio Lula da Silva. There is some evidence that, since 2002, the Brazilian President was not simply trying to find some room for policy maneuvering within the existing regulatory structure. Instead, the President was trying to move away from the governance structure associated with IRAs to adopt a different model of state intervention in the economy. In the third part of this chapter, I turn to the normative question: who should control regulatory agencies? My earlier contribution to this volume tried to answer the narrow question of how much power the executive branch can have over IRAs. This chapter, in contrast, turns to the broader question of whether the president can decide to abandon IRAs in pursuit of a different model of state intervention in the economy. This broader normative question is rarely discussed in the North American literature on regulatory agencies. While this discussion may not be as relevant to countries that have a stable and long-existing regulatory state, and are unlikely to abandon it in the near future (such as the U.S.), it is a pressing issue in countries that have only in the last two decades fully or partially privatized public utilities and created IRAs for these infrastructure sectors. In the U.S., the ‘regulatory state’ refers to a broad range of independent agencies and executive departments that constrain and structure the market according to various statutory mandates, such as protecting consumers, the environment, investors, and employees. In South American countries, by contrast, the so-called ‘regulatory state’ is a relatively recent creation and refers to a particular model of state intervention in specific sectors of the economy (mostly public utilities) (Jordana and Levi-Faur 2006). A newly elected President, however, might prefer to move away from this marketoriented ‘regulatory state’ in favour of other forms of state intervention in the economy. For instance, Latin America has been historically characterized by the so-called ­‘developmental state’, which induces private activity in a goal-oriented fashion (Schneider 1999). In contrast to the neoliberal basis for the ‘regulatory state’, where state intervention is designed to address market failures, the developmental state is based on the assumption that there can be a third type of economy, which is capitalist without being based on free-

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Assessing the theory of presidential dominance  183 market economics. In this framework, the state intervenes into the marketplace without assuming centralized control over all economic activity, as in socialist economies (Johnson 1982). The range of state intervention in economic activities in such a developmental state is wider as it includes guidance, incentive and fostering of private strategies. These activ­ ities are based on several instruments such as state-owned banks, state-owned enterprises, taxes, financial incentives, redistributive policies, and sectoral regulations. The question is whether a democratically elected President would be entitled to move away from the neoliberal ‘regulatory state’ in favour of another form of state intervention, such as the ‘developmental state,’ in a context of ‘presidential dominance.’ My conclusion is that in the Brazilian case nominally ‘independent’ regulatory agencies are controlled by the President, not by Congress (Prado 2010). Thus, their independence will be largely determined by presidential preferences (Silva 2011). The range of potential presidential preferences, however, cannot be limited only to frameworks that prevail in the global north, or more particularly in the U.S. In this particular case, a different model of state action may influence presidential preferences. The long history of state interventionism in Latin America, in general, and Brazil, in particular, cannot be ignored. Thus, in line with Dubash and Morgan (2013), I argue that although scholarship analyzing ‘the regulatory state’ in the global south may be enriched by theories generated in the global north, it also needs to make a conscious effort to be more grounded in the unique political, legal and social circumstances in which these IRAs operate.

1. HOW DOES THE PRESIDENT CONTROL REGULATORY AGENCIES IN BRAZIL? In contrast to the United States, the constitutional features of the Brazilian polit­ ical system imply that most of the control mechanisms over IRAs are allocated to the President. My earlier contribution (Prado 2010) indicated how three mechanisms supported the hypothesis of presidential dominance over agencies: budgeting, appointments, and new legislation. I formulated a hypothesis and presented some anecdotal evidence to support it; subsequently, two of these three mechanisms were largely confirmed in an empirical analysis developed by Silva (2011), which will be discussed in detail below. 1.1  Empirical Evidence of Budgetary Control To guarantee their financial autonomy, Brazilian IRAs have alternative sources of funding, which are not part of the executive fiscal accounts. Like all the expenditures made by bodies in the executive branch, however, the use of these funds has to be previously authorized by federal budgetary appropriations. In my earlier contribution to this volume, I argued that the Brazilian President has substantial control over IRAs’ budgets. The Brazilian President can influence the federal appropriations process through three mechanisms. First, the President has exclusive power to prepare a budget proposal. Independent agencies’ budgets are incorporated into the presidential budget that is sent for congressional approval. The preparation of this proposal is the first point at which the President can influence the appropriations process and hence the agencies’ budgets. Second, constitutional and statutory provisions allow for significant presidential control

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184  Comparative administrative law over the final outcome of the bill approved by Congress, as the President can choose to veto some of its provisions (Figueiredo and Limongi 2002, 303). Finally, the President can reduce congressional appropriations (including the amounts allocated to the agencies) during the budget implementation phase at his or her own discretion. The result is that, in Brazil, there is no guarantee that the resources allocated to IRAs by Congress will be disbursed. There are basically three mechanisms by which the President can reduce the amount of money after it has been allocated by Congress to the agencies. First, the President can require some funds to be reserved for contingencies (Reserva de Contingência). Second, he or she can reduce the limit allocated by the congressional budgetary appropriations process by not disbursing the full amount. While the law defines the maximum amount that can be disbursed, the President has discretion to determine the actual amount by presidential decree (in Portuguese, Decreto de Execução Orçamentária). Third, he or she can impose specific limits on spending by the public administration, such as travel budgets.3 As a result of Silva’s (2011) study, there is now comprehensive evidence that the President has heavily used the mechanisms described above to impose budgetary cuts on IRAs. Data from 1997 to 2008 shows that the reductions were consistent and pervasive, and were mostly implemented through the Reserva de Contingência, although they varied from agency to agency (see Table 11.1 below). [T]he number shown represents the portion of the budget that is withheld, considering the size of the agency’s initial budget. The agency most affected by this practice is ANTAQ [Regulatory Agency for Water Transportation], where the average contingenciamento is 41.73. Conversely, the

Table 11.1  Contingenciamento of the Brazilian regulatory agencies (1997–2008) AGENCY

N

MINIMUM (% of budget)

MAXIMUM (% of budget)

ANA (Water) ANAC (Aviation) ANATEL (Telecommunications) ANCINE (Cinema) ANEEL (Electricity) ANP (Oil & Gas) ANS (Health Care Services) ANTAQ (Water Transportation) ANTT (Ground Transportation) ANVISA (Health & Safety)

8 2 11 5 11 11 9 7 7 10

2.94 11.15 0.81 29.88 0.93 1.69 3.46 21.33 11.01 1.71

17.31 16.09 3.52 44.18 20.53 3.67 24.29 61.11 16.93 4.01

MEAN STAND DEV 12.45 13.62 2.27 36.61 8.07 2.42 9.18 41.73 13.57 2.73

5.42 3.49 0.86 5.39 6.40 0.63 6.38 15.61 2.19 0.80

Source:  Silva 2011, Table 2, p. 57.

3   ‘In 2003, for instance, a presidential decree limited the travel expenses of the employees of all executive branch bodies (including ministries) to 60 per cent of the total amount spent in 2002. The agencies, as bodies of the executive branch that belong to the ministries, were also subject to these limits’ (Prado 2008a, 495).

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Assessing the theory of presidential dominance  185 agency least affected is ANATEL [Regulatory Agency for Telecommunications], with an average contingenciamento of 2.27 (Silva 2011, 57).

In sum, the data shows that at least one of the mechanisms described in my earlier analysis has been actively used to reduce the amount of resources available to regulatory agencies. 1.2  Empirical Evidence of Control over Appointments My earlier contribution to this volume also suggested that the Brazilian President was not very constrained in his or her choice of commissioners to IRAs. First, there is no partisan balance requirement, a feature common in U.S. independent agencies. Second, there is a requirement for senatorial approval of presidential nominations but it does not seem to be very effective. In theory, senatorial approval gives the Senate veto power over the President’s nomination. The assumption is that, in order to avoid a veto of one of his or her nominees, the President must consider the Senate’s political preferences. Almost all constitutive statutes in Brazil require this senatorial approval for nominations to regulatory agencies. However, the Brazilian Senate rarely rejects nominees. At the time of my analysis, the vast majority of presidential nominations for IRAs had been approved by the Senate. One hypothesis for this lack of vetoes is that senatorial approvals do not constrain the President’s choices for agency appointments. The other hypothesis is that it does, but the negotiation happens in the background, before nominations become public (Prado 2008a, 481–2). While there does not seem to be any empirical analyses to test these hypotheses, there is data regarding two other mechanisms the President used to control IRAs’ commissioners in Brazil: resignations and vacancies. Silva (2011) collected data over 1997 and 2008 and found that out of 152 directors, 25 resigned before the end of the mandate. This suggests that ‘[a]lthough an important guarantee of independence, the lack of removal power by the President may be ineffective. The President can still find ways to “convince” commissioners to resign, leaving a vacancy that will be filled by the President’s own nominees’ (Prado 2008a, 470). The number of resignations is relatively high (16 per cent), and at least some seem related to presidential attempts to directly influence the agency. For instance, the chairman of the telecommunications agency (Luiz Guilherme Schymura) resigned in January 2004, after a series of conflicts with President Lula (Prado 2008a, n. 214). While not conclusive, this qualitative evidence is in line with Silva’s assumption that resignations may serve as a mechanism for the President to reduce the level of independence of Brazilian agencies. Vacancies occur when an opening in one of the seats at the board of the IRA (due to a resignation or the end of the term) is not occupied by a new commissioner, remaining vacant. As Silva (2011, 54) explains: ‘if an agency stays long without one or more directors, the functioning of the regulatory agency as a whole is undermined’. There are basically two ways in which vacancies can negatively affect the operation of regulatory agencies. First, with a reduced number of commissioners, there is a higher workload for each commissioner, which may either create delays or reduce the time available for deliberation over important decisions. In connection with this, it is important to note that an agency operating with a reduced number of commissioners is less likely to have diversity of points of view, which may not only reduce the richness of its deliberations, but also

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186  Comparative administrative law Table 11.2 Vacancy on the board of the Brazilian regulatory agencies by days (1997–2008) AGENCY

N

MINIMUM (days)

MAXIMUM (days)

MEAN

STAND DEV

ANA (Water) ANAC (Aviation) ANATEL (Telecommunications) ANCINE (Cinema) ANEEL (Electricity) ANP (Oil & Gas) ANS (Health Care Services) ANTAQ (Water Transportation) ANTT (Ground Transportation) ANVISA (Health & Safety)

9 3 12 6 12 11 10 8 8 10

0 0 0 76 0 0 0 0 0 0

324 116 365 365 226 365 273 317 352 300

61.11 47.00 128.33 214.83 52.08 202.82 110.20 136.50 92.88 121.90

106.753 61.049 134.660 130.824 90.767 167.398 106.208 149.500 140.030 110.308

Source:  Silva 2011, Table 1, p. 55.

may affect its independence. The second and more drastic way in which vacancies can negatively affect the operation of agencies is by not providing the minimum quorum required by law, in which case decisions must be postponed until there is a quorum. This may happen for exceptional decisions that require unanimity or supermajority, or for regular decisions, when the agency is fully paralyzed by not having the minimum number of commissioners required by law. As Silva (2011) (Table 11.2) shows, the numbers of vacancies in Brazilian IRAs have been significant. These data show that there are other mechanisms (in addition to the ones identified in my earlier contribution to this volume) that may allow the President to influence the commissioners of IRAs and reduce the agencies’ independence. Vacancies that are filled by the President help him or her achieve results consistent with his or her aims; unfilled vacancies benefit a President who wishes to limit the actions of an IRA. 1.3  Empirical Evidence of the Threat of New Legislation In my earlier analysis, I argued that the Brazilian President has constitutionally entrenched legislative powers to implement structural reforms in the design of the agencies, and these powers could be used to influence regulatory outcomes. The Lula administration’s actions towards independent regulatory agencies in 2003 seem to illustrate such a threat: while pressing IRAs in the telecommunications and electricity sectors to implement a particular level of tariffs increase, the President supported a bill in Congress to reduce the independence of agencies. I suggested that the executive branch could be using the threat of the bill to signal to IRAs that acts contrary to government policy preferences would be punished with severe structural changes. It is interesting to note, however, that the telecommunications agency (ANATEL) managed to resist such pressure, while the electricity agency (ANEEL) did not (Prado 2010). At least three hypotheses could explain why ANATEL managed to resist this

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Assessing the theory of presidential dominance  187 pressure better than ANEEL. First, ANATEL has slightly stronger formal guarantees of independence than ANEEL (Prado 2008a). Second, the bureaucrats in the telecommunications sector were all in favour of implementing an IRA in the sector, whereas those in the electricity sector were divided on the matter (Prado 2012). As a consequence, it may be that the personnel in one agency were more inclined to resist any changes in the model than in the other agency. Third, while the telecommunications sector was fully privatized in Brazil, the electricity sector was not. As a result, providers in the sector were all private, and perhaps better able to organize themselves to lobby against a greater degree of executive control (and thus wider discretion) over sectoral regulation. While there is no further evidence to support which of these hypotheses is correct (if any), it is interesting that ANEEL was eventually deprived of its ability to define the terms of concession contracts without approval from the executive branch. Indeed, in 2004, a presidential decree (medida provisória) determined that concession contracts for the electricity sector would need to be approved by the ministry. This has significantly reduced the level of independence of ANEEL (Silva 2011, 52). Except for this decree affecting ANEEL, however, there were no significant changes in the rules defining the regulatory powers or the internal procedures of IRAs (Silva 2011, 58). Thus, there does not seem to be empirical evidence showing the systematic use of this mechanism by the Brazilian President.

2. WHY DOES THE PRESIDENT CONTROL REGULATORY AGENCIES IN BRAZIL? My earlier contribution to this volume argued for a ‘theory of presidential dominance’ over IRAs in Brazil (Prado 2010). Silva’s (2011) careful empirical analysis not only finds supporting evidence in line with the hypotheses I raised, but also points towards a new set of mechanisms used by Brazilian Presidents to control IRAs’ commissioners, such as resignations and vacancies, as discussed in section 1. This section turns to the reasons why the President would try to exercise control over regulatory agencies. Silva (2011) argues that the presidential decision is informed by a complicated costbenefit analysis. The factors in the presidential calculus include the formal mechanisms constraining presidential action, the President’s preferences, and the costs related to regulatory credibility, which could affect the level of investment in the sector. Silva’s hypothesis is very plausible, but it raises another question: why would the President try to exercise greater control over regulatory agencies? This section hypothesizes that President Lula had a preference for a different form of state intervention in the economy, known as ‘the developmental state’. The institutional structures of the ‘regulatory state’, created in the aftermath of utility privatization to reduce executive discretion over sectoral regulation, did not fit well into this model. The data discussed in the first part of this chapter could support this hypothesis. 2.1  Why Reduce the Budgets of Regulatory Agencies? Although the funds available to IRAs fell during Lula’s presidency, it is not clear whether this was designed to enhance the President’s control over agencies. Some claim that it was

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188  Comparative administrative law driven by other factors. Indeed, in response to the accusation that he was trying to reduce the independence of the agencies, President Lula’s administration argued that the budget reduction was being used to generate a fiscal surplus (Prado 2008a, n. 332). The annual report of the oil and gas agency for 2003 and 2005 has also indicated that the fiscal surplus was the main reason for the budget cuts (ANP 2003, p. 30; 2005, p. 27). Along the same lines, a 2006 report produced by the association of companies directly or indirectly operating in regulated sectors (Associação Brasileira de Infra-Estrutura e Indústrias de Base, ADBID) indicates that most of the reductions were part of the government’s attempt to generate a fiscal surplus (ABDIB 2006). None of these three sources are neutral, and thus the information provided by them can be biased. In any event, the argument is that the President was not intentionally trying to influence IRAs. Instead, he just decided that the resources earmarked for regulation would be more useful if allocated for other purposes, e.g., fiscal surplus. A competing hypothesis is that the significant increase in budgetary appropriations (contingenciamentos) that followed the election of Lula can be potentially associated with the political agenda of the Workers’ Party (Partido dos Trabalhadores, PT), to which President Lula belongs. PT was the opposition party at the time and vehemently opposed the neoliberal reforms promoted by the previous President, Fernando Henrique Cardoso: privatization of state-owned companies in infrastructure sectors and the creation of regulatory agencies. As a result, the election of PT in 2002 and Lula’s inauguration in January 2003 was interpreted as a potential threat to the independence of regulatory agencies (Mattos and Mueller 2006; Pacheco 2003). Figure 11.1 shows a significant increase in the total amount of withholding of budgetary allocations (contingenciamento) for IRAs starting with Lula’s inauguration. Silva (2011) acknowledges that, unlike Cardoso, Lula had preferences that did not support maintaining the independence of the regulatory agencies. The question, however, is why Lula would have such preferences. These significant budgetary cuts on IRAs could be seen as a resistance to ‘the regulatory state’ apparatus because they imposed significant obstacles to Lula’s preferred model of state intervention in the economy. Indeed, the budgetary cuts seem to have caused reductions in monitoring activities, across the board cuts in personnel, and even elimination of customer services (Exame 2005). These could be interpreted as an attempt to block the agency from effectively exercising its regulatory functions. 2.2  Why Maintain Vacancies in the Board of Regulatory Agencies? Two mechanisms of control discussed in section 1 above were resignations and vacancies. As indicated earlier, qualitative evidence seems to suggest that some of these resignations were the result of a campaign to oust commissioners who were not aligned with the polit­ ical preferences of the President. However, some (if not most) of these resignations may have been caused by other factors, such as commissioners deciding to leave an agency for personal reasons. Unless every single case of the 25 resignations identified by Silva (2011) is analyzed, and the reasons for each are accounted for, it is difficult to exclude the hypothesis that they were driven by other reasons, rather than presidential attempts to influence agencies. The vacancies are subject to the same uncertainty. Although the number of vacan-

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Assessing the theory of presidential dominance  189 26.0 24.0 22.0 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 –2.0 1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source:  Silva 2011.

Figure 11.1 Evolution of annual contingenciamento as a percentage of agencies’ total budget as approved by Congress (1998–2008) cies significantly increased with the election of the Workers’ Party to the presidency, it is not possible to determine whether these vacancies were a result of the different level of congressional support that President Lula had during his first terms in office, or whether the vacancies were intentional decisions that he pursued to undermine the ability of regulatory agencies from functioning. Silva favours the latter interpretation: ‘the vacancy can be politically motivated, because the nomination of a director with aligned preferences does not guarantee control of the agency’s decisions, but it undermines its decision-making capacity and certainly makes it easier to capture’ (2011, 55). While decreasing the decision-making capacity of the agency would facilitate capture (as there is less diversity in the board and less time for deliberations), it also can simply undermine the agency’s ability effectively to exercise its regulatory functions. This, in turn, could be a presidential attempt to empty the agencies and weaken the regulatory state. In Brazil, the vacancies seem to have been used to increase presidential influence over agencies, not to reduce the overall level of regulation. Indeed, the nomination of ­‘temporary commissioners’ (diretores interinos) seems to have become pervasive in Brazil with the increase in the number of vacancies (Exame 2015). When there is a vacancy in the regulatory agency that is preventing it from performing its regulatory functions (as most agencies must have a minimum quorum to deliberate) the President has either nominated a commissioner or has empowered the minister of the sector regulated by the agency to do so. It is important to note that ‘temporary commissioners’ are nominated by presidential decree and do not require senatorial approval. In sum, while there is no information about what motivated these vacancies, the increase in ‘temporary commissioners’ seems

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190  Comparative administrative law

350 300 250 200 150 100 50 0 1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source:  Silva 2011.

Figure 11.2  Annual vacancies in Brazilian regulatory agencies (in days) to suggest that increased presidential control (instead of fully paralyzing IRAs) was the motivation behind such vacancies. It is interesting to note that vacancies have increased from 1999 onwards, peaking in 2004. However, there was a significant decline starting in 2006 (see Figure 11.2 above). To the best of my knowledge, there is no analysis trying to explain the decline in vacancies after 2006. One could speculate that despite the fact that the agencies were still governed by the same President (Lula was reelected for a new term in 2005, was inaugurated in 2006 and remained in office until 2010), the political dynamic may have changed in his second mandate. Indeed, the political alliance of Lula’s congressional coalition differed from his first term to his second term in office. Although the first term was marked by the mensalão scandal, in which the President had to provide monthly payments to guarantee the support of allies in Congress, the second term was marked by a significant increase in the number of ministries (and thus another form of payment to Congressional allies) (Pereira et al. 2011). This could have facilitated or expedited nominations in Lula’s second term. One piece of anecdotal evidence that could support this hypothesis that there was more congressional support in the second term is the fact that an opening in ANATEL in 2007 was quickly filled in 2008 when the government needed a third vote to get a corporate acquisition approved by the telecommunications agency. At the time, two commissioners had announced they would approve the acquisition. However, the other two commissioners had announced that their approval would not be unconditional. To solve the deadlock, the President quickly nominated a fifth commissioner in September 2008, and the acquisition was approved shortly thereafter (Turner and Prado, 2009). The fact that the

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Assessing the theory of presidential dominance  191 government could quickly fill a vacancy when it needed a third vote suggests that nomin­ ations could be done rather quickly in Lula’s second term in office, if the President so wished. However, this case could also be an exception: it is possible that Congress quickly approved the nomination because it also supported the corporate acquisition (or it was being pressed by other political actors). In sum, there is no conclusive evidence to determine whether leaving vacancies open is an intentional strategy to further executive control over IRAs. The increase in the number of temporary commissioners, however, suggests that the President’s preference was to increase control over agencies. This, in turn, could support the hypothesis that the President was favouring a more interventionist state where sectoral regulation was closely aligned with the policies of the executive branch. 2.3  Why Use the Threat of New Legislation? As described in section 1, President Lula seems to have used the threat of new legislation to directly influence the decisions of some regulatory agencies regarding tariff increases in 2003. In the same year, President Lula established an interministerial working group to discuss the governance of regulatory agencies. As a result of the report produced by this working group (Presidência da República 2003), a bill was sent to Congress in 2004.4 The bill was known as the ‘general law of regulatory agencies’ and it proposed a series of changes in the powers and governance structure of regulatory agencies. It is possible to interpret the bill proposed by the executive as yet another instance of the Workers’ Party resistance to accepting ‘the regulatory state’.5 The President could explicitly voice his or her resistance to the regulatory state and try to openly and publicly eliminate IRAs. However, the possible risks associated with that policy (given the concerns with regulatory credibility and the negative impact that this could have on levels of investment) could be significant. In this context, the 2004 bill could have been an attempt to subtly change the system. The specific reforms proposed by this bill were so intrusive that one cannot safely discard the hypothesis that while formally maintaining their shell, they effectively amount to efforts to remove regulatory power, and to impose presidential control over the regulatory powers that were not withdrawn from the agencies (Coutinho et al. 2004; Prado 2008b). The bill was subject to significant resistance from the regulatory agencies themselves, their association (Brazilian Association of Regulatory Agencies, ABAR), and the association of companies directly or indirectly operating in regulated sectors (ADBID) (Silva 2011, 58). Silva uses this resistance to conclude that the threat of new legislation was not used to try to influence regulatory agencies in Brazil, and thus it should not be included as a variable in her attempt to measure the de facto independence of Brazilians IRAs. In contrast, in my earlier contribution to this volume, I suggest that the President could potentially have used the mere threat of new legislation to influence IRAs (Prado 2010).

  PL 3,337/2004.   But see Silva (2011, 58, 64), who interprets the bill as a compromise: ‘Lula went from a position contrary to the model to a position of recognizing their role, but defending reformulations such as those seen in the project of the “general law of regulatory agencies.”’ 4 5

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192  Comparative administrative law Leaving aside this disagreement, there is a more important possibility to consider: that this legislative proposal was a first step by President Lula to undermine aspects of ‘the regulatory state’, such as independence of regulatory agencies, that were hard to reconcile with ‘the developmental state’. However, given the amount of negative publicity that the bill received, and considering the level of political resistance to the proposed changes by powerful actors, the President decided that the process of implementing significant reforms in the regulatory state would have to be subtler than initially envisioned. In this case, the budgetary cuts and the vacancies could be strategies designed to continue his attempts to reduce the independence of regulatory agencies. These efforts intensified after the proposed bill failed to receive the support it needed to be approved by Congress. To be sure, there is a lot of uncertainty as to President’s Lula preferences vis-à-vis IRAs. A detailed analysis of newspaper articles regarding the relationship between Lula and the regulatory agencies in 2003 and 2004 shows that month by month the preferences of the President seem to change. They oscillate between the more radical discourse against the ‘regulatory state’ as a whole, with a more moderate discourse against regulatory independence and an even more moderate discourse of reconciling some of his policy preferences with the existence (and added value) of IRAs (Nunes et al. 2007, 258–62). This oscillation may just be a reflection of the fact that we lack a clear model to conceive of a regulatory state with dirigist characteristics (Jayasuriya 2013), which is the topic of the next section.

3. WHO SHOULD CONTROL REGULATORY AGENCIES IN BRAZIL? Both pieces that have guided the analysis in the first part of this chapter – my earlier contribution to this volume, (Prado 2010) and Silva’s (2011) empirical analysis of the presidential influence over Brazilian IRAs – use the principal-agent framework to analyze the relationship between the President and regulatory agencies. We both assume that ‘the relationship between principal and agent is contained in an institutional context, so that the wider environment has a direct impact on the ruler’s incentives structure to act opportunistically and change the rules of the game’ (Silva 2011, 45). This section does not abandon that framework. However, the idea that the President may prefer a form of intervention in the economy that differs from the ‘regulatory state’ may push the framework to its limit. A new principal (Lula) may not perceive the advantages of delegating power to an agent established by its predecessor (Cardoso). As a result, the new principal may try to dismantle the terms of the principal-agent relationship as defined by the previous principal because this arrangement is an obstacle to pursuing a distinct form of state intervention in the economy. The normative question raised by this hypothesis is what are the limits for the principal to redefine the terms of the existing principal-agent relationship, i.e. the ‘regulatory state’. It is important to note that the discussion here assumes that the President is the principal, as is the case in Brazil, where IRAs are clearly placed within the executive branch, under the auspices of sectoral ministries.6 The Brazilian Constitution defines the President

6   This is not the case for agencies of oversight and monitoring, such as the Tribunal de Contas da União and the Ministério Público (Public Prosecutor’s Office).

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Assessing the theory of presidential dominance  193 as the chief of the executive branch, subordinating to him or her all offices of the public administration.7 Thus, in contrast to the U.S., there is less room to debate whether they should be controlled by Congress or by the President from a legal-constitutional perspective (Prado 2010). Instead, the Brazilian debate focuses on how much presidential control is legitimate given that the law guarantees IRAs some degree of autonomy (Prado and Urueña, 2016). As I discuss in my earlier contribution to this volume, the legal-constitutional debates in the U.S. and in Brazil may emphasize different questions, but they can also have something in common: both rely on ‘larger competing views of regulatory politics, and can be fully understood only with reference to those broader visions’ (Croley 2003, 833–4). In the U.S.: those who see greater presidential control as benign tend to see the outcome of unsupervised agency rulemaking as itself problematic. For example, agency rulemaking in the absence of active White House oversight is undesirable because agencies are too easily captured by the regulated interests they represent. . ..Critics of expanded presidential oversight of agency rulemaking imply a more favorable view of agency and possibly even of legislative decisionmaking. Their view finds support, for example, from the traditional picture of agencies as experts whose primary function is not to deliver favorable regulation to politically powerful constituencies but rather to exercise their expertise in a rational way that promotes general welfare (Croley 2003 834–5).

In Brazil, there are also competing visions of regulatory and democratic politics. On the one hand, those who oppose high levels of presidential control of agencies believe that such control can lead to opportunistic political decisions driven by short-term electoral concerns that will be harmful to regulated sectors. Therefore, delegation of powers to independent agencies is often interpreted as a sign of credible commitment. On the other hand, those in favour of greater presidential control argue that democratically elected Presidents are more likely than agencies to promote general welfare. The assumption here is that the President is just trying to do his or her job, and that s/he will only be able to successfully govern a country and implement policies if s/he can coordinate the acts and decisions of many different bureaucratic entities. The discussion outlined in the previous section of this chapter, however, is not related to diverging views about regulatory politics. President Lula’s resistance to IRAs was not driven by “public choice theory’ concerns about principal-agent relationships and commitment mechanisms. Instead, the resistance was driven by the belief that development policies require close coordination between states and markets. The governance structure of the traditional ‘regulatory state’, and more specifically the independence of regulatory agencies, operate as obstacles to such coordination, and thus would be obstacles to implementing effective development policies. Thus, creating mechanisms for greater presidential control over IRAs seems to have been part of a larger plan to adopt a different form of state intervention in the economy. Since 2003, the country has been moving progressively but steadily towards increased state interventionism, which has been described as a movement towards the creation of a potentially New Developmental State (Trubek, Coutinho and Shapiro 2013). This is considered a ‘new’ form of developmentalism because, unlike   1988 Brazilian Constitution, art. 84, sec. II.

7

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194  Comparative administrative law its predecessors, it is more reliant on the private sector and cooperation with multinational corporations that operate in a global economy. It is clear what the Lula government was moving away from: the neoliberal reforms implemented by his predecessor. The institutions related to development finance had been reformed in the late 1980s and early 1990s to guarantee that the Brazilian state was operating within the parameters of the neoliberal agenda proposed by the Washington Consensus. This meant that there could not be unaccountable money transfers between the Central Bank, the Brazilian Development Bank, and the Treasury. The institutional set related to regulation of infrastructure sectors, in turn, had been implemented in the mid-1990s, as part of a package of neoliberal reforms to promote development. In conjunction with a massive privatization process, the government created independent regulatory agencies to foster an economic environment attractive to private investors. These reforms were designed to curtail common practices that supported the Brazilian Developmental State in the 1960s and 1970s. One of the practices that was reformed was the substantial transfer of resources from the Treasury to support economic activity in certain sectors of the economy. Another was direct political intervention in infrastructure sectors, where the regulatory framework was often used not to guarantee the viability of the sector, but to address other economic concerns (such as reducing the price of electri­ city to unsustainable levels in order to control inflation). While it was clear that the Lula government was moving away from the neoliberal reforms of the 1990s, it is less clear in which direction it was moving towards. The Brazilian Developmental State has been described as a hybrid form, in which state interventionism is coupled with private investment (Saad Filho and Morais 2012). But we still do not have a clear understanding of whether and how state activism could be reconciled with the free market and neoliberal reforms implemented in the 1990s. This is not simply a question about whether and how a government could pursue interventionist policies through regulatory frameworks. Instead, it is a question about new governance structures that still allow for a regulatory state to exist, but in a renewed and redefined fashion. The transformations described in this chapter call for an effort to explore new forms of regulatory arrangements that emerged as a result of the adaptation that ensued after the transplantation of regulatory structures from the global north to the global south (Dubash and Morgan 2013). The lack of clarity about what kind of governance structure the Lula government was trying to create comes, in part, from the lack of theoretical research exploring ‘­varieties of the regulatory state’,8 in general, and the possibility of ‘a regulatory state with dirigiste characteristics’, in particular (Jayasuriya 2013). One could think that the new developmental state would find other sources of financing for key sectors, leaving the development financing structure created in the 1990s untouched. One could also imagine that while the government would intervene in certain economic sectors, any intervention in infrastructure sectors would not challenge the regulatory framework created at the time 8   I am conceiving ‘varieties of regulatory state’ differently from what was previously described as ‘varieties of regulatory capitalism’, as the latter refers to different governance structures that may characterize the regulatory state, whereas the former contemplates the different forms of state intervention in the economy that may guide a regulatory state. On ‘varieties of regulatory ­capitalism’, see Levi-Faur 2006.

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Assessing the theory of presidential dominance  195 of the privatization. Thus, it is possible that what Silva (2011) identifies as a preference to maintain the agencies, but with some modifications, is actually an attempt to find ways to reconcile these two models of state intervention in the economy. This seems like a more interesting hypothesis than simply assuming that the interaction of the Brazilian President with agencies was an intentional, albeit subtle, attempt to dismantle the regulatory state, in the aim of ultimately returning to old forms of state intervention that ­historically characterized the developmental state. In my earlier contribution to this volume, I argued that the dispute about the diver­ ging views on regulatory politics is an empirical one. The question about which agent will act opportunistically and which one will guarantee better regulatory outcomes can be answered with collection of data and an assessment of the impact of different arrangements on the quality of regulation. The dispute about the preferred form of state intervention in the economy can also be framed as an empirical one: which type of interaction between state and the private sector guarantees the best development outcomes. The problem is that the answer may be indeterminate, as the comparison between ‘liberal’ and ‘coordinated market economies’ under the label ‘varieties of capitalism’ seems to suggest (Hall and Soskice 2001). Similarly, what this analysis seems to suggest is that there may be room to also explore ‘varieties of the regulatory state’. Thus, the narrow question about whether the President should control regulatory agencies or not is intrinsically connected with and depends upon the answer to a much broader question: whether the President should prefer the ‘traditional regulatory state,’ with its strong IRAs, over other forms of state intervention in the economy.

CONCLUSION My earlier contribution started and ended by pointing to the risks of legal transplants. When immersed in a different political system, transplanted institutions diverge from their original models. This is clearly illustrated by the case of IRAs in Brazil. I also called attention to the dangers of ‘theoretical transplants’ and ended my piece by stating that ‘[i]n an era in which “one of the most widespread institutions of modern regulatory governance is the so-called independent regulator” (OECD 2002), determining the most appropriate theory to describe and evaluate IRAs is of considerable importance’ (Prado 2010). Since then, the study and analysis of the regulatory state in the global south has made significant inroads into the academic literature, as illustrated by the publication of a special issue of the journal Regulation and Governance dedicated to this topic, and of the book, The Rise of the Regulatory State of the South (Dubash and Morgan 2013). In direct dialogue with the issues raised by this chapter, these publications suggest that a conversation between the literature on the developmental state and debates over the role of regulatory agencies could potentially be extremely fruitful, as: developmental state scholars . . . helpfully highlight the importance of exploring the ways in which pressures for redistribution are mediated with greater or less success through economic institutions. But . . . regulatory state scholars are particularly well placed to enrich this perspective with their knowledge of an institutional form that is growing in importance and by its very construct is designed to be insulated from these pressures—the regulatory agency. We suggest then, that more dialogue between developmental state and regulatory state scholars is a

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196  Comparative administrative law ­ roductive way forward. Since those focused on developmental considerations typically not only p give more conceptual space for redistributive policy than regulatory state scholars but also stress a more robust role for the state in steering the economy, interesting tensions seem empirically likely in Southern states that adopted neoliberal ideas about regulation in the 1990s but are now taking a turn towards the ‘new developmental’ state (Dubash and Morgan 2013, 17).

Brazil is a case in point, but probably not the only one.

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Assessing the theory of presidential dominance  197 Saad Filho, A. and L. Morais (2012), ‘Neo-Developmentalism and the Challenges of Economic Policy-Making Under Dilma Rousseff,’ Critical Sociology 38(6), 789–98. Schneider, B.R. (1999), ‘The Desarrolista State in Brazil and México,’ in Meredith Woo-Cumings (ed), The Developmental State, Ithaca: Cornell University Press. Silva, M.B. (2011), ‘Independence After Delegation? Presidential Calculus and Political Interference in Brazilian Regulatory Agencies,’ Brazilian Political Science Review 5(2), 39–74. Trubek, D., D. Coutinho and M. Shapiro (2013), ‘New State Activism in Brazil and the Challenges for Law,’ in D. Trubek et al. (eds), Law and The New Developmental State: The Brazilian Experience in Latin American Context, Cambridge, UK: Cambridge University Press. Turner, C. and M.M. Prado (2009), ‘Democracy and its Impact on Nominations for the Supreme Court and Independent Regulatory Agencies’, Revista de Direito Administrativo, 250 (Jan./Apr.), 27–74.

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12.  Experimenting with independent commissions in a new democracy with a civil law tradition: the case of Taiwan Jiunn-rong Yeh

In 2005, the Taiwanese government established the National Communications Commission (NCC), the first ministerial level independent regulatory commission in Taiwan. Not surprisingly, its establishment triggered intense political confrontations, partisan fights and constitutional court rulings against the backdrop of contentious ­politics in a new democracy. It also provoked frequent controversies in subsequent operation. This chapter uses Taiwan as a case study to demonstrate the perils and prospects of introducing independent commissions into new democracies with civil administrative law systems.  First, Part 1 presents some background on the use of commissions in Taiwan and a case history of Taiwan’s first independent commission, the NCC. Part 2 then places the NCC in the context of an institutional and functional analysis of the many meanings of ‘independence’ as applied to regulatory commissions. Next, Part 3 turns to positive political economy to explore the political dynamics behind the creation of such commissions and the application of these arguments to Taiwan. Finally, Part 4 contrasts the NCC with the Taiwanese Central Bank to show how ­‘independence’  may  have little to do with the formal institutional properties of an agency.

1. THE ROAD TO NATIONAL COMMUNICATIONS COMMISSION: TAIWAN’S FIRST INDEPENDENT COMMISSION In Taiwan, quite a number of government agencies are named ‘commissions’ but very few of them are independent in both the legal and the operational sense. I first briefly discuss how these commissions were created and what functions they shouldered. I then explain why the idea of creating a real independent commission arose after democratization in 2000 when the Democratic Progressive Party (DPP) won the presidency for the first time after the long time dominance of the Chinese Nationalist Party (Kuomintang, or KMT). Next, I will recount the controversies NCC faced in its operation. 1.1  Creating Commissions The 1947 Constitution of the Republic of China leaves open the organization of the Executive Yuan, functioning as a cabinet and specifies that the details should be deter198 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 198

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Experimenting with independent commissions in a new democracy  199 mined by statute (Constitution, 1947, art. 61).1 The resulting Organic Act of the Executive Yuan (Organic Act), however, fixes the cabinet at eight ministries, two commissions and five to seven ministers without portfolio.2 The last revision to this Act was in 1980. In the last two decades, many new ministerial positions and government agencies were created by organic statutes, and despite several attempts at revising the Organic Act, an agenda for government reforms was not put on the table until the first regime change in 2000. 1.1.1  Creating representation-reinforcing commissions: the 1940s The Organic Act creates two commissions besides the eight ministries: the Mongolian and Tibetan Affairs Commission (MTAC) and the Overseas Compatriot Affairs Commission (OCAC). The creation of these commissions represented the KMT government’s attempt at representing ‘the entire China’ despite a persistent gap between what it could rule and what it imagined it ruled (Yeh, 1997). The history of the MTAC may be traced back to the Qing dynasty.3 Its current existence, however, can be understood only as an example of representation reinforcement. In 1912, the newly born Republic of China established an agency regarding Mongolian and Tibetan affairs within the Ministry of Internal Affairs. Ironically, after its relocation to Taiwan, the KMT government elevated the previous agency to the level of ministry to represent—however nominally—de jure control over Mongolia and Tibet. The OCAC is part of this same representational myth created by the KMT government. An agency that dealt with overseas Chinese affairs was already established and subordinated to the Executive Yuan in the 1930s. It was later elevated to a ministerial level to bestow on the KMT government the image that it was the government of all Chinese people around the globe despite the fact that it could only rule the tiny island of Taiwan. Using the organizational form of a commission also permitted the ­government to invite  overseas leaders residing in respective countries and regions to serve on the commission. 1.1.2  Creating commissions for foreign voices: the 1950s and 60s Two very distinctive commissions were established as a way to represent foreign voices in the postwar reconstruction of Taiwan. They were the Council for United States Aid (CUSA) and the Joint Commission on Rural Reconstruction (JCRR). The Sino-American Economic Aid Agreement signed between the Republic of China and the United States in 1948 established the CUSA. American financial aid was provided to Taiwan, and the CUSA was created to supervise their use. Its collegial structure made it easier for American advisers to participate in decision-making processes. After several

1   The Republic of China Constitution (hereinafter, ROC Constitution or Constitution) was created in 1947 and brought by the Nationalist (Kuomintang, KMT) government to Taiwan in 1949 with its defeat and retreat (further details on Taiwan’s constitutional change, Yeh, 2002). 2   There are also two ministerial offices, the Government Information Office and the DirectorateGeneral of Budget, Accounting and Statistics (Organic Act of the Executive Yuan, 1947, arts 3–5). 3   The Qing dynasty created the Court of Colonial Affairs to oversee the relationship of the Qing court to its Mongolian and Tibetan dependencies. During the years of Emperor Kuang Hsu, it was reorganized as the Ministry of Minority Affairs. It then evolved to the current Mongolian and Tibetan Affairs Commission.

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200  Comparative administrative law reorganizations,4 it evolved into the current National Development Council assisting the Premier in promoting comprehensive national socio-economic development. Similarly, the JCRR was established in 1948 in Nanjing as part of an economic agreement between the United States and the Republic of China. Several members of the Commission were Americans. It moved with the KMT government to Taiwan in 1949. As its missions ended and the agreement terminated in 1979, it was reorganized as the Council for Agricultural Planning and Development (CAPD) and later became the current COA. These agencies took the form of commissions to facilitate American participation. 1.1.3 Creating commissions in response to growing social and political demands: 1980s–present The 1980s witnessed a drastic economic boost and related social and political changes. Demands for health care, environmental protection, consumer protection and social security brought about a sharp increase of statutes as well as regulatory agencies. But as indicated earlier, the Organic Act fixes the number of ministries, and thus makes government reorganization difficult. Nevertheless, the law permits the Executive Yuan to set up commissions if deemed necessary (The Organic Act of the Executive Yuan, 1947, art. 14). The government saw this as a most expedient way out and quickly created many ­commissions to expand its structure in response to growing social demands. As a result, over the last two decades, the executive created 19 commissions under this particular provision. Commissions such as the Financial Supervisory Commission, Mainland Affairs Council, National Youth Commission, Veterans Affairs Commission, Atomic Energy Council, are all products of this expedient strategic action despite the rather rigid legal framework. Absent a coherent and consistent organizing principle, the organization of government is evidently confusing and fosters inefficiency. 1.2  Creating Independent Commissions As discussed earlier, administrative commissions have become an ordinary means of establishing new governmental organs, but they resemble cabinet ministries not the independent commissions of the American model. The idea of creating a real independent commission came only with the first regime change in 2000. 1.2.1 The legal recognition of independent commissions in the government reform package Since the early 1990s, Taiwan has undertaken seven rounds of constitutional reform but much of the agenda was focused on the rearrangements of constitutional institutions (Yeh, 2002). The constitutional reform of 1997, however, represented a real opportunity. In streamlining provincial governments, two articles were also added to allow a great deal of flexibility in the organization of the central government and to lessen legal restrictions 4   In September 1963, CUSA was re-formed as the Council for International Economic Cooperation and Development (CIECD), which in turn became the Economic Planning Council (EPC) in 1973 for the purpose of strengthening the Executive Yuan’s planning and research functions. In 1977, the EPC was merged with the Executive Yuan’s Finance and Economic Committee and reorganized as the CEPD.

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Experimenting with independent commissions in a new democracy  201 on establishing administrative agencies (Additional Article of the Constitution, 1997, art. 3, secs. 3–4). Despite this constitutional opportunity, not much action was undertaken until the first regime change that came in four years later. Once in power, the Democratic Progressive Party (DPP), the long-time opposition under the past authoritarian regime, made government reform an important part of its political agenda. In June 2002, a committee on government reform established in the Executive Yuan began to push through major bills for government reforms. One of the most important of these was the Basic Code Governing Central Administrative Agencies Organizations (Basic Code) that was finally enacted on June 23, 2004. The Basic Code provides the legal foundation for creating a real independent commission. The definition of independent commission is stipulated as ‘a collegial commission that acts independently in accordance with the law and without being subject to the supervision of other organs’ (Basic Code 2004, cl. 2, art. 3, sec. 1). Such an independent commission is designed to have five to seven full-time commissioners with fixed terms, appointed by the Premier5 with legislative approval (Additional Article, 1997, art. 3, sec. 1). It is also added that a certain number of commissioners shall not be from the same political party (Basic Code, 2004, art. 21).6 Upon the passage of the Basic Code, the DPP government released its government reform package with a plan to reduce the 37 government agencies to 24 and to formally recognize five independent commissions, including the NCC.7 1.2.2  The establishment of NCC and controversies The passage of the Basic Code seemed to provide a momentous opportunity for government reform, and the DPP government pressed further to create the NCC in light of digital convergence. Party politics, however, worsened as President Chen continued into his second term in 2004. The KMT had not expected to lose the presidential race for the second time. Facing this challenge, the KMT decided to assert its legislative dominance, it boycotted major legislation, policies and budgets proposed by the DPP government.8 In contrast, aided by its presidential victory, the DPP pushed for further progressive reforms, part of which targeted the KMT on its large pool of party assets and party-controlled enterprises. 5   That is, the President of the Executive Yuan, who is appointed directly by the President but is responsible to the Legislative Yuan, the parliament (Additional Article, 1997, art. 3, sec. 1). 6   This is similar to the conditions of appointment to American independent commissions. The President appoints commissioners subject to Senatorial confirmation, but terms are staggered and generally longer than the President’s term. The President appoints the Chair. Most statutes require that no more than a majority of the members can be affiliated with the same political party. Under the US two-party system, this generally means a three to two split on the typical five-member commission. In Taiwan, the reason that the Standard Act called for party balance was, not surprisingly, partly the result of a political compromise. It left determination of the precise ratio to subsequent statutory enactments. For example, the Organic Act of the National Communication Commission now requires that no political parties shall have more than half of the commissioners. 7   The five independent commissions are National Communications Commission (NCC), Central Bank, Financial Supervisory Commission, Fair Trade Commission, and Central Election Commission. 8   An assassination attempt on the president and vice president one day before the presidential election in 2004 and the subsequent legal disputes also exacerbated the political confrontation between the KMT and the DPP.

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202  Comparative administrative law The KMT was itself a media tycoon that controlled the China Television Company (CTV), Broadcasting Corporation of China (BCC) and Central Motion Pictures Company (CMPC). Pressed upon the issue of party assets and perhaps under financial difficulty as a result of losing the presidential campaigns, the KMT under the chairmanship of Yin-jeou Ma rather quickly sold its majority shares in the three media companies to the China Times Group before the end of 2005. Suspicions abound regarding whether there were any under-the-table deals or whether the Chinese Communist Party was even involved. The Government Information Office (GIO), at the time still in charge of media ­regulation, vowed to undertake a thorough investigation.9 Against this political background, it is easy to understand why, at the time, both the KMT and the DPP welcomed the proposal to establish the NCC.10 The KMT was pleased that the NCC would substitute for the GIO, thus undermining the DPP ­government’s regulatory control over the media. As for the DPP, media reform had always been on its own agenda, and thus it also endorsed the idea of a neutral regulatory commission. Notwithstanding a thin agreement on creation of the NCC, the two parties faced a serious political fight as the KMT sought to entrench its political dominance in the composition of the NCC. The KMT—in defiance of the Basic Code (2004, art. 21)—came up with a novel way to appoint commissioners in proportion to seats enjoyed by major political parties, thus leaving the Premier only ceremonial power in appointment.11 It should be noted that perhaps in reaction to the KMT’s partisan formula, some DPP government officials began defying the Basic Code and arguing that the NCC commissioners should be appointed directly by the Premier, since all ministers must be appointed as such stipulated in the Constitution (1947, art. 56). As a minority party in the parliament, the DPP found no way to stop the KMT’s partisan formula except by petitioning the Council of Grand Justices, the Constitutional Court. On November 9, 2005, the Organic Act of the National Communication Commission (hereinafter NCC Organic Act) was passed in spite of the serious political standoff. Surrounded by protests and controversies, the commissioners were appointed in accordance with the partisan formula supported by the KMT12 and the NCC was established on February 22, 2006. Not surprisingly, the NCC   The Office was under the Executive Yuan and hence was controlled by the DPP government.   When it became clear that the KMT might take political advantage of the creation of the NCC, some DPP members and government officials began to have a second thought on its cre­ ation, and some even opposed it strongly. 11   The original Basic Code provided that a total of 15 members of the NCC would be recommended based on the percentages of the numbers of seats of the respective parties (or political groups) in the Legislative Yuan, and, together with the three members to be recommended by the Premier, should be reviewed by the Nominating Committee, which would be composed of eleven scholars and experts as recommended by the political parties (or political groups), again, based on the percentages of the numbers of seats of the respective parties (groups) in the Legislative Yuan, via a two-round majority review by more than three-fifths and one-half of its total members, respectively. And, upon completion of the review, the Premier shall nominate those who appear on the list as approved by the Nomination and Review Committee within seven days and appoint the same list upon confirmation by the Legislative Yuan. (The NCC Organic Act, 2005, art. 4, secs. 2–3). 12   As a gesture of protest, those commissioners who sided with the DPP government resigned their posts immediately after their appointment. They also urged their colleagues who sided with the KMT to resign in order to rescue the integrity of this newly established institution.  9 10

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Experimenting with independent commissions in a new democracy  203 quickly renewed the license of BCC and found neither legal violations nor irregularities in the KMT’s sale of its shares to the three media companies. 1.2.3  Constitutional court rulings and political response In July 2007, the Constitutional Court rendered Interpretation No. 613 (2007), ruling that the way commissioners were appointed under the NCC Organic Act was unconstitutional as it deprived the Premier of his powers to appoint commissioners. The Court first discussed whether it was constitutional to establish a so-called independent commission, and if the answer were affirmative, it would then discuss how commissioners would be appointed and whether the current method of appointment violated the Constitution.13 On the first issue, the Court reasoned that ‘under the principle of administrative unity, the Executive Yuan must be held responsible for the overall performance of all the agencies subordinate to it, including the NCC’. Because of the principle of administrative unity, the establishment of an independent agency must be regarded as exceptional and can be justified ‘only if the purpose of its establishment is indeed to pursue constitutional public interests’.14 The Court derived the exceptionality of creating independent commissions from the text of the Constitution, administrative unity, and principles of democracy as well as accountability. The Court reasoned that the Constitution requires a ­‘hierarchical administrative system’ which ensures a democratic ‘politics of ­accountability’. Independent commissions will ‘inevitably’ reduce such accountability. With regard to the second issue, the Court found that the method of selecting and appointing NCC commissioners ‘deprive[s] the Premier of the power to decide on personnel affairs of the Executive Yuan substantially’, ‘thus violating the principles of politics of accountability and separation of powers’. The design of partisan proportional representation was criticized by the Court as accomplishing ‘exactly the opposite’ of impartiality by ‘inviting active intervention of political parties’. Despite the finding of unconstitutionality, the Court did not immediately void the function of the NCC and relevant provisions. It declared that these provisions would remain in effect until December 31, 2008 unless they were revised earlier. It further added that ‘the legality of any and all acts performed by the NCC will remain unaffected’ before its final nullification. The revised NCC Organic Act was completed by the end of 2007, and it stipulated that the NCC should be composed of seven members with four-year terms, appointed by the Premier with legislative approval. No more than half of its commissioners may be members of one party (NCC Organic Act, 2008, art. 4). In January 2008, the KMT won a landslide in the legislative election held under a new electoral rule established by constitutional amendment.15 The KMT, assured of its political dominance, was not in a hurry to implement the revised law. In March, the

13   There was also a minor legal issue, but one with large political consequences, concerning pending decisions at the GIO that were transferred by the NCC Organic Act to be reviewed by the NCC. The Court, however, did not find these transfers unconstitutional. As a result, the pending decision concerning the media company previously owned by the KMT was constitutionally transferred and reconsidered by the NCC. Not surprisingly, the decision was in favour of the media company. See also Yeh 2016. 14   J.Y. Interpretation No. 613, 2007. 15   The 2005 constitutional revision reduced the seats in the Parliament from 260 to 113 and

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204  Comparative administrative law KMT p ­ residential candidate, Ying-jeou Ma, won the election and assumed office in May. Subsequently in August, the Premier nominated the second-term commissioners of the NCC with the approval of the legislature where the KMT occupied almost three-quarters of the seats.16 1.3  Challenging Independent Commissions The controversies about NCC did not end with the Constitutional Court ruling and the subsequent reorganization in 2008. Before the reorganization, the integrity of the commissioners was challenged by the legislators and executive authorities. In the years following its reorganization in accordance with the Constitutional Court ruling, the Commission was further muddled with political allegations, drawing suspicion on its neutrality and competence from various corners of the society. It seems that the past partisan manipulation of the Commission, despite being overruled by the Court and corrected by the subsequent legislative revision, has stayed and that it may take a long while to gain public trust. 1.3.1  Questioned neutrality: the suspicion from Congress In addition to the constitutionality issue over the first-term commissioner appointment, many commissioners’ integrity was challenged. During the legislative approval procedure, some legislators expressed their suspicion on the nominees for their association with the telecom industry. Also, many commissioners were alleged to hold other concurrent posts even after taking up the position as commissioners, in contravention of the NCC Organic Act.17 1.3.2  China Times Group controversies: the anxiety from the public Against the backdrop of KMT’s scandalous assets and enterprises, Eng-Meng Tsai, the CEO of Want Want Holdings Limited, gradually revealed his ambition to establish his media empire in Taiwan after his successful takeover of local media in China. Many of these deals required NCC approval. With fragile public trust, NCC walked on the tight rope of political confrontation. After Ma assumed presidential office in 2008, Tsai purchased the China Times Group, a leading newspaper and publication corporation in Taiwan with close ties to the KMT. Subsequently, Tsai moved to purchase former KMT enterprises CTV, CTI Television Incorporation (CTI), and CNS, one of the largest multi-system operators in Taiwan. adopted a proportional representation system with two votes (one vote for party and the other for candidates). 16   NCC continues to operate with seven commissioners, whose professional backgrounds include three in telecom, one in law, two in media, and one in economics. Their respective backgrounds are available at the website of the NCC, http://www.ncc.gov.tw/english/ (last visited, Sept. 6, 2016). 17   It is stipulated that ‘[c]ommissioners, from three years prior to assuming the position, shall be free of having served in full-time party-affiliated positions, or having participated in civil servant elections, or having served in paid positions or as consultants at a government agency or a state-run enterprise, or having served in paid positions or as consultants as assigned by a government agency or a state-run enterprise’ (The NCC Organic Act, art. 7).

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Experimenting with independent commissions in a new democracy  205 There were concerns that the merge might threaten freedom of speech and the integrity of journalism. At the same time, there had been some traces indicating President Ma’s administration’s pro-China preference. With the timing of Tsai’s purchase and business background, plus Ma’s cross-strait policy preference, suspicions rose among the public that China might, in a subtle way, have put a hand in Taiwan’s media industry. NCC did approve Tsai’s purchase of CTV and CTI with conditions. However, Tsai questioned NCC’s decision for prejudice as some conditions attached seemed to be targeting only his purchase. The provisions were ridiculed as ‘Want Want Provisions’. To Want Want’s satisfaction, NCC took away the concerned conditions. Scholars and citizens, however, were concerned that with Tsai’s increasing power in both print and digital media industry, Taiwan’s pluralism and open society may be jeopardized. Unhappy, Tsai appealed to NCC and subsequently to the Court for the elimination of such conditions. In the Court, Tsai questioned the appropriateness and legality of the provisions while NCC refuted that it was their professional judgment and constitutional duty to guarantee the diversity of voices in Taiwan’s marketplace of ideas. Tsai’s purchase of CNS provoked heightened political confrontation involving students and voluntary groups. CNS is one of the major multi-system operators, providing a comprehensive telecommunication service, including cable television, digital television, HDTV, and wireless Internet. It is said that after the purchase, Tsai was able to control 12 TV channels and 11 cable TV systems. The impact to Taiwan media environment is huge since it is the biggest media corporate merger in Asia in five years. It led to a serious concern from academics and journalists after Tsai announced his plan to purchase CNS. In response to the public concern, NCC held a series of public hearings. However, three commissioners severely criticized by Tsai from the last disposition announced they were backing away from the discussions concerning CNS purchase. They even voiced their concerns about NCC’s independence. Aside from concerns addressed by commissioners and scholars, there were increasing anxieties from the general public. NCC approved the merger with conditions. However, during and after NCC decision-making, Tsai and Want Want bombarded the media pages with accusation against the individuals involved. That is, Tsai would use his media tools—China Times, CTV, and CTI—to damage or harass people who stood out against the purchase. Tsai’s campaign provoked public nerves. Not only did Next TV accuse Tsai over his intentional blockage to make a contract with CNS, but also students concerned by the issue took to the street. They questioned NCC for its inability to properly handle the merger issue with a series of protests around the NCC office and CTI building in 2012. Students asked for NCC to scrutinize the merger application, to draft an anti-trust act, to lessen China controls, and to support Next TV staff to organize a union.18 At that time, NCC was seen as a powerless governmental agency facing a well-funded corporation with ample media capital. 18   The fight between Next TV and Tsai resulted in the sale of Next TV, because Jimmy Lai Chi-ying, founder of Next Media, thought that the cost would be unacceptable if Next TV still could not be launched in Taiwan. During the protests, students and social activists organized Formoshock, an organization concerning the development of Taiwan media industry. They still keep their eyes on what the merger issue induced, including the legislation of an anti-trust act and the revision of the telecommunications act.

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206  Comparative administrative law Eventually, in February 2013, NCC canceled the permit of merger since Tsai did not fulfill the requirement of the imposed conditions. Even with this last decision, NCC’s credibility was severely questioned.

2. THE OPERATION OF INDEPENDENT COMMISSIONS AND THEIR LEGAL AND INSTITUTIONAL PREDICAMENTS The first independent commission in Taiwan—despite all the controversy surrounding its creation and subsequent operation—is now well into its tenth year of operation. It provides a way to ask how the operation of an independent commission may be affected by the existing legal and institutional administrative frameworks. What factors dominate the institutional setting and practical operations of independent commissions? For example, is the constitutional government structure—that is, presidential, parliamentary or a mixed system—a dominant factor? The following discussion seeks to analyze the institutional and legal context within which independent commissions must work to achieve their assigned functions in an ‘independent’ manner. 2.1  Independence from the View of Constitutional Structure Presidential and parliamentary democracies assign different functions to Presidents and Parliaments respectively. In a presidential democracy, executive functions are carried out primarily by a President and his/her departments with supervision by the Parliament. To create an independent commission with regulatory functions in a presidential democracy, the law must separate the commission from the President and block executive control over the chosen regulatory arena. Decisions on whether or not to create an independent commission and its level of independence are basically reduced to a fight between President and Parliament. The scenario is slightly different in a parliamentary democracy, where executive functions are carried out by a cabinet that is subject to the will of the Parliament. In this case, how can an independent commission actually be independent? If the commission is intended to be independent of the cabinet, which is subject to parliamentary control, is it also intended to be independent from the Parliament? Here we may contemplate two scenarios: the first is an independent commission that is independent from the cabinet but not from the Parliament and the second is an independent commission that is independent from both the cabinet and the Parliament. In the former, creating an independent commission—from the viewpoint of the Parliament—is similar to creating any other type of agency except that it is a little detached from the cabinet. In the latter, however, an independent commission is independent from the Parliament, making it very different from other types of agencies. Evidently the challenges facing independent commissions vary between presidential and parliamentary systems. In a presidential system, independent commissions must be attentive in relationship to the President, whereas in a parliamentary structure, they need to focus on their degree of distance from the Parliament. The role of independent commissions in a mixed system, such as that of Taiwan, is even muddier. In a mixed system, if the President’s political party fails to enjoy a parliamentary majority, an independent

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Experimenting with independent commissions in a new democracy  207 commission would have a hard time deciding from which branch it should keep its distance. The Parliament would certainly demand that it be separated from the President, whereas the President would urge otherwise. This was certainly reflected in the fight between the DPP government and the KMT legislature surrounding the NCC’s creation. The KMT insisted on extending its legislative influence over the NCC and separating the NCC from the DPP government. The DPP argued that the NCC in exercising administrative powers must still be kept under a certain degree of control by the DPP executive. 2.2  Independence from the View of Administrative Functions What—if anything—makes independent commissions salient and novel institutions in the civil administrative law tradition? Definitely not their quasi-legislative and quasi-judicial powers, which are shared by ordinary executive agencies. Perhaps in a civil administrative law tradition, collegial deliberation and related institutional setting are what make independent commissions unique. The heightened level of deliberation in the decision-making processes of independent commissions marks a departure from the traditional decisionmaking of ministries and agencies. 2.3  Independence from the View of Administrative Procedures Suppose an independent commission exercises powers no different from agencies. What kind of ‘independence’ does it enjoy in terms of its decisions, decision-making process and even subsequent appeals? In Taiwan, as in other civil administrative law systems, administrative dispositions may be appealed for review by the supervisory authority (Administrative Appeals Act, 1998, art. 3). Before individuals litigate their cases in the administrative courts, however, they must first make administrative appeals to the higher supervisory authority (Administrative Litigation Act, 1998, art. 4). For instance, administrative dispositions made by the Environmental Protection Agency must first be appealed to the Executive Yuan before being litigated in the administrative courts (Administrative Appeals Act, 1998, art. 3).19 In the case of the NCC, should their administrative dispositions be appealed to the Executive Yuan? Will this not compromise the NCC’s independence? This issue was debated in the drafting process of the NCC. If one had the American model of independent commissions in mind, one would definitely think that administrative dispositions made by the NCC should not be reviewed by the Executive Yuan and instead should be allowed to be litigated directly in the courts. Interestingly however, most scholars trained in German administrative law, as well as judges in Taiwan, contended otherwise. They argued that administrative appeals against dispositions is a vested individual right, and that the review of administrative appeals is on the lawfulness of decisions rather than on their appropriateness, thus posing no threat to the ‘independence’ of independent commissions. In the end, the NCC Organic Act left this issue unresolved. Even more interesting, the agency does not carry out administrative appeals itself

19   If administrative dispositions are made by the Executive Yuan, then administrative appeals would be to itself (Administrative Appeals Act, 1998, art. 3).

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208  Comparative administrative law but rather assigns the task to an administrative appeal committee. According to the Administrative Appeals Act, every competent administrative authority (including the Executive Yuan, ministries, commissions and agencies) must set up an administrative appeals committee, half of whose members must be scholars, experts and righteous persons with a specialty in law outside such an authority (Administrative Appeals Act, 1998, art. 52). In other words, the appeals committee includes a majority of outsiders— mostly law professors and attorneys. This design ensures the independence of the appeals committee within the agency. But should administrative dispositions by an independent commission be reviewed—even in terms of law—by another independent appeals committee, either of itself or of the higher authority, namely the Executive Yuan? This is again an open question in Taiwan. Another open question is the extent to which independent commissions should abide by procedures required in the Taiwanese Administrative Procedural Act (APA). According to the APA, agencies must give individuals the opportunity to be heard before rendering an administrative disposition (2001, art. 102). Agency rule-making is also required to follow a notice-and-comment procedure (2001, arts 154–155). These requirements do not exempt decision-making by independent commissions, but should they do so? Similar issues apply to the question of judicial scrutiny. Should the court use a different standard of review for decisions made by independent commissions? In the view of political accountability, one might argue for more exacting scrutiny (May 2006), but, conversely, others point to the commission’s collegial mechanisms, deliberative rationality and plural (or nonpartisan) representation as reasons for deferential court review. 2.4  Independence from the View of Regulatory Policies and Budgets Most of the time, independent commissions exercise regulatory functions, either quasilegislative or quasi-judicial. The massive amount of regulations in a modern welfare state certainly requires delicate coordination, not to mention accountability (Kagan 2001). Regulatory coordination takes place on at least three levels. First and foremost, it occurs at the level of budgetary planning. Who should be empowered to decide on the level of resources to allocate to any particular area of administration and regulations, for instance to any particular independent commission? To what extent should independent commissions have any say in this budget allocation process? In a presidential democracy, where the President had the power to propose a budget to the legislature, in what sense would independent commissions remain independent?20 Even in a parliamentary system where the Parliament barely goes into much of the details of the prime minister’s budget, how should independent commissions coordinate budgetary needs with other ministries and agencies? The second level of coordination occurs in a much more mundane sense of administrative chores. Certain policies such as paper reduction, gender statistics, regulatory impact assessment or eco-friendly offices are often coordinated by the presidential administration or the cabinet office. Should these policies apply to independent ­commissions? Would

20   On the delicate budgetary relationship between independent commissions and the president see Pierce, Shapiro and Verkuil (2004).

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Experimenting with independent commissions in a new democracy  209 this affect their ‘independence’? In contrast with mundane administrative coordination, the third type involves much more delicate policy concerns. After all, it is d ­ ifficult— and perhaps even unrealistic—to imagine that a central bank can make policy without co­ordinating with other economic-related ministries as well as with statistics and accounting bureaus. Nor can any independent communication commission—such as the NCC in Taiwan—ignore the decisions of other equally independent commissions—such as the Fair Trade Commission—and policies of related ministries such as the Ministry of Transportation or the National Science Council. How can independent commissions strike a balance in such sensitive situations while maintaining their ‘independence’? 2.5  Independence from the View of the Relationship with Bureaucrats There is yet another perspective in which the ‘independence’ of independent commissions must be assessed: their relationship with bureaucrats. To ensure independence as well as high-quality expertise, commissioners are often sought from outside government, and they often do not serve for a long time due to their own career concerns.21 As a result, commissioners become very much dependent upon bureaucrats, their knowledge of the field and their assessments of particular issues. They run the risk of being captured by bureaucrats who represent entrenched technical biases and, even worse, business interests (Uga et al. 2009). In this way, independent commissions are not really different from ordinary ministries and agencies. If independent-minded commissioners choose to fight with career bureaucrats, they will soon realize that their institutional advantages (outside expertise, term limits, and independence from the central administration) will turn into grave disadvantages (e.g., as outsiders with a short time in office with no internal support) (Uga et al. 2009). 2.6  Independence from the View of State-Society Relationship The last perspective on the ‘independence’ of independent commissions is the statesociety relationship. After all, the creation of independent commissions signals a distrust of the state and seeks to bring in societal influence to dismantle and even to democratize the state (Sajó 2004). This presupposes that there is an actual separation between state and society particularly regarding experts, their training and even, to certain extent, their available resources. For many states, especially new democracies, however, such an autonomous society full of experts and resources simply does not exist or is still emerging. In selecting commissioners, it is more often than not public university professors, researchers for state labs or retired senior bureaucrats who are on the list. They do not really represent even slightly different sets of knowledge, backgrounds or entrenched interests from those reflected in traditional ministries and agencies. The same line-up may appear in ministries as in independent commissions. Such entrenched state-society relationships pose perhaps the greatest challenge to the independence of independent regulatory commissions.

21   Most of them, for example, are university professors and tend to go back to universities after serving for one, two or three terms.

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3. CAPACITY-BUILDING FOR THE ‘INDEPENDENCE’ OF INDEPENDENT COMMISSIONS Designating a public body as independent is one thing; sustaining independence in day-to-day political dealings is quite another. Institutional capacity-building towards independence has been a critical challenge for modern independent commissions. The reorganization of contextual needs and challenges are vital to the capacity-building of the independent commissions established in the flux of democratic transition. 3.1 Theories Explaining the Establishment of Independent Commissions: Control, Trust and Insurance In a modern bureaucratic government, can one find principles to help one decide whether to organize an agency as an independent body rather than as an arm of a cabinet agency? Positive political economy provides one useful framework for analysis. Under this view, one examines the institutional dynamics and interest alliances of the actors at the time the law was passed, including Congress, the President, Ministries and bureaucrats (Devins and Lewis 2008). One may also investigate the creation of an independent regulatory commission in a particular social context, such as democratic transition or a divided society (Sajó 2004). In this construction, the independence of the regulatory body serves functional needs in a given social context. States set up independent commissions in different contexts and for different reasons. Three models could help explain this diversity. The first can be called the control model, in which the organizational form of an independent commission prevents political dominance by the sitting executive. Despite variations across independent commissions, US agencies were established primarily to limit the dominance by the current President (Strauss,1984; Devins and Lewis 2008). At a time when members of Congress are concerned about the influence of the current President on policy, they tend to create independent agencies to implement policies. Because independence is meant to limit the President’s control, major points of concern are fixed-terms for the commissioners and just cause removal by the President.22 Operational transparency or level of expertise, while meaningful in constructing independent commissions, is not the essential point of concern under this model of independent commissions. Secondly, in some societal settings where social distrust prevails, independent commissions might be able to win social trust in some regulatory areas. Societies in profound transition, where large-scale reconstruction of economic and political order is occurring, require a level of stability to counter the flux of political exchange that generated the distrust. The creation of independent commissions in Central and East Europe, where the planned economy was transformed into a market economy, fall into this category. In this trust model, control is not the primary concern; neutrality is. A neutral institution in transitional polities may be able to downplay short-term pressures for redistribu-

22   For example, Myers v. United States, 272 U.S. 52 (1926); Humphrey’s Executor v. United States, 295 U.S. 602 (1935); Wiener v. United States, 357 U.S. 349 (1958).

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Experimenting with independent commissions in a new democracy  211 tion that would harm long-term sustainability. Conversely, however, neutral institutions might simply safeguard vested interest against politically motivated redistributive policies (Sajó 2005). Isolation from day-to-day politics thus generates a sense of security in the flux of transitional democracy. In the trust model, the function of independent commissions goes beyond the non-intervention central to the control model. To avoid capture by vested interests, institutional structures such as plural representation or diversified expertise are needed. Thirdly, in a political insurance model, independent commissions might stabilize policy in the face of possible regime change and/or a transitional justice deficit. In new representative democracies, where regime change becomes possible in major national elections, major political factions may opt for mutual insurance to prevent a worst-case scenario arising from the shift of powers. This is particularly true for current power-holders who fear future electoral losses, or for the defeated who are not sure about coming back. While this political insurance model could well explain the inception of constitutional courts for new democracies,23 studies show that the percentage of new agencies with insulating characteristics also relates to periods of divided government in the US (Lewis 2003; Devins and Lewis 2008). The establishment of the NCC in Taiwan during the DPP Administration may well be an example of the political insurance model at work. 3.2 Institutional Capacity-building for Independence: Plural Representation, Neutrality and Independence Institutional capacity-building should proceed in accordance with the explanatory models set out above. Under the control model, non-intervention by the current governing power is the key underpinning the independence of independent commissions. The corresponding institutional arrangement is just-cause removal. This non-intervention/just-cause removal thesis, however, only applies to the control theory. It does not provide a sufficient foundation under trust model under which the establishment and operation of an independent commission has to win social trust in the flux of transitional political exchange. Neutrality—an institutionally conscious refusal to take sides, be it on religious, partisan, factional or ideological grounds—is essential to win social trust. Neutrality can take various forms. Religious neutrality is generally imposed on administrative functions in modern administration. Neutrality of the bureaucracy is a built-in element of democracy that seeks to prevent instability arising from constant regime changes following elections. In the East and Central European context, the institutional interests of the inherited agencies and the shrinking of government activities and ­large-scale privatization have increased the need for neutral regulatory agencies (Sajó 2004: 32). Independence as understood in the political insurance model, however, goes beyond neutrality. Being neutral and only neutral, an independent commission may avoid making timely and correct decisions. Indeed, in the democratic transitional social context, it is a luxury to expect every decision by an independent commission to be ‘neutral’ or colourblind. Every decision must take sides; there is no way for its decisions to be ‘non-partisan’.   Ginsburg 2003.

23

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212  Comparative administrative law Accordingly, independence should go beyond neutrality or impartiality. The commission needs to respond to social need with convincing arguments. If a creation of an independent commission is to succeed, what are the institutional requirements? In a situation where the expectation of independence goes beyond neutrality, what more is required? The spatial gap between neutrality and independence in fact determines the legitimacy of an independent commission. What more is needed? Possible answers could include institutionally built-in expertise, procedural rationality, and the confinement of the regulated areas. But one cannot overlook other non-institutional factors, which I consider in the next section. 3.3  Capacity-building Beyond Institutional Design The contextual basis for the inception of independent commissions could be significant not only for institutional design, but also for elements beyond it. Indeed, there are elements beyond the institutional design for independence, including leadership and partisan practice and political culture. For this purpose, the functional independence of Taiwan’s Central Bank will be examined as a counterexample to NCC. 3.3.1  Leadership, partisan practice and culture The typical institutional view on independent commissions presupposes an obvious line between independent agencies and executive agencies and there are distinct characteristics of independent and non-independent agencies (Bressman and Thompson 2010). Kirti Datla and Richard L. Revesz (2012) question this line and provide a spectrum of independence for agencies. They reject the binary distinction between independent and executive agencies. Instead, they argue that all agencies should be regarded as executive and be seen as falling on a spectrum from more independent to less independent. Noninstitutional factors such as leadership, politics, and culture may contribute to agencies’ position on this continuum. 3.3.1.1 Leadership  As we can imagine, leadership directly influences independent commissions’ policy-making. In the case of Federal Communications Commission (FCC) in the US, Philip Weiser elaborates a negative lesson. He argues that the leadership choices of the Chairman can exacerbate poor institutional design (Weiser 2009: 684–90). Weiser recounts how the Chairman in 2007, Kevin Martin, denied the public and his fellow commissioners’ a meaningful opportunity to comment on his ad hoc policy proposals. Weiser takes other commissions as positive counterparts. He names Alfred Kahn of the Civil Aeronautics Board (CAB), and Robert Pitofsky and Timothy Muris of Federal Trade Commission (FTC). He concludes that thoughtful leadership can help to change an agency’s culture and commit it to serious strategic thinking and planning. This leadership argument could well be advanced for the functional dependence of a formally non-independent agency such as Taiwan’s Central Bank which will be elaborated later. 3.3.1.2  Political/partisan practice    It is commonly held that institutional design would insulate commissions from political control. Other factors, however, may also insulate commissions from political control. One of them, as Barkow maintains, is ‘political tools’ (Barkow 2010). Political tools, such as the strategic use of information, and reliance on

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Experimenting with independent commissions in a new democracy  213 public benefactors and public advocates may enable commissions to negotiate with other agencies. While political leadership of the commission will vary depending upon the partisan composition of the legislature and the executive, political polarization and consequent delay in confirmation may significantly impair the executive’s ability to control commission policy (Devins and Lewis 2008). 3.3.1.3  National context  Compared to leadership and political/partisan practice, institutionalism is a much broader and underlying factor. As a governmental design borrowed from an established democracy—the US—independent commissions may produce peculiar problems when introduced into new or transitional democracies. Mariana Mota Prado shows how transplanting the US model of independent commissions to Brazil often failed to achieved the desired regulatory results because it did not respond to ‘local conditions and peculiarities’, including the President’s ability to control agencies through appropriations, despite traditional mechanisms of administrative independence (Prado 2008: 442).

4.  ANALYZING TAIWANESE INDEPENDENT COMMISSIONS Having set out many of the factors that influence the creation of independent commissions, and make them effective, this section will apply these lessons to the Taiwanese case. First, I will describe the reasons for the creation of the NCC. Then I will contrast the case of the NCC with the Taiwanese Central Bank, which was not formally ‘independent’, but nonetheless achieved genuine political independence and significant policy success. 4.1  The NCC It was not until after the first regime change in 2000 that an independent commission, the NCC, was established. Why did the concept of an independent commission develop so late in Taiwan when the organizational concept of a commission had taken shape so early? The unusually long and continuous authoritarian rule of the Nationalists prevented development of constitutional check and balances (Yeh 2007). Democratization had brought about partisan competition in the political arena, resulting in contentious partisan politics. The large-scale government reform proposed by the DPP administration soon after the first regime change in 2000 included the proposal for the independent NCC, the first of its kind in Taiwan. On the one hand, the new regime initiated and carried out the NCC proposal, though a minority government in the legislature, after the first regime change since democratization. On the other hand, communication regulation was of great interest to the prior ruling party (KMT), but its commitment to free speech, a critical foundation to new democracy, was in doubt. The creation of the NCC, the first independent commission, thus had social and institutional underpinnings beyond the control model as set forth above. Designating the NCC as an independent commission was not primarily a way to assure non-intervention by the President, but was rather a way to direct the social transition to a more competitive political reality. One can easily link the story to the political

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214  Comparative administrative law insurance model because both the green and blue camps wish to insulate the regulation of communications from the impact of sudden political change. But the social underpinnings go even further. At stake was media and telecommunication regulation, a foundation for democratic consolidation in new democracies. In Taiwan KMT’s ownership of radio, television and newspaper presented special difficulties even after regime change. The lack of transitional justice in partisan politics led the public to place great hope in the NCC. The NCC nonetheless failed to maintain public trust in the wake of adverse supreme court rulings and suspicions of partisan control. 4.2  Independence in Practice: the Central Bank as a Counter-example to the NCC I will turn to the counter-example to the NCC: The Central Bank of Taiwan (CB) is not an independent agency but it enjoys functional independence in the eyes of the general public, marking a contrast to the NCC which was guaranteed independence both legally and institutionally while struggling painstakingly for its practical political independence. The CB was originally founded in China in 1928 with a mission to unify the currency and to serve as the bank of state and government that manages interest and monetary supply. With the completion of the Chinese Civil War, it was relocated to Taiwan. It was not until in 1961, however, that the CB was able to take on a wider set of functions ­including improving the banking system, leading finances, stabilizing the currency, and so on. Today, the main goals of the CB are promoting financial stability, guiding sound banking operations, maintaining the stability of the internal and external value of the currency, and fostering economic development within the scope of the above objectives.24 The organization of the CB has seen frequent changes since its inception. It has been placed under the Nationalist Government (1927–49), under the Office of the President (1949–61), and subsequently under the Executive Yuan (1961–present). The CB’s inception was not based on a concept of an independent commission. Neither the 1947 ROC Constitution nor the Central Bank of Republic of China (Taiwan) Act stipulate its independent status.25 Under the government reform project, the CB, unlike the NCC, the Central Election Commission, and the Fair Trade Commission, was not chosen to be an independent agency. However, the CB has shown considerable independence in practice; it has been considered a credible agency amid and after the democratization due primarily to Governor Fai-Nan Perng’s leadership. At first, Yuan-Dong Xu was the governor of the CB; people 24

  Central Bank of Republic of China (Taiwan) Act art. 2:

The primary objectives of the Bank’s operations shall be: 1. To promote financial stability; 2. To guide sound banking operations; 3. To maintain the stability of the internal and external value of the currency; 4. To foster economic development within the scope of the above objectives. 25   It is stipulated that: ‘In the following matters, the Central Government shall have the power of legislation and administration: . . . 9. Currency system and state banks. . .’ (1947 Constitution, art. 107).

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Experimenting with independent commissions in a new democracy  215 trusted Xu’s ability, and he was able to insulate Taiwan from the Asian financial crisis. With Xu’s sudden death in the air crash in February 1998, Fai-Nan Perng, vice-governor of CB, took up Xu’s office. At first, few had confidence that Perng would come to the rescue amid Asian financial crisis and possible economic recession but Perng was able, nevertheless, to tackle the hardship successfully. Although Taiwan faced cross-Strait tension, the Asian financial crisis, a major earthquake and typhoon, and the SARS epidemic, Perng still successfully kept the currency stable—the change in exchange rate of New Taiwan Dollar (NTD) is around 0.01 per cent. Perng and seven other governors of the CB earned an ‘A’ grade in 2015 from Global Finance Magazine, making them the only governors of the CB earned rank ‘A’ in a sequence of 13 years.26 In contrast to the astonishing change-rate of the premiers and cabinet members, Perng continued his governorship without intervention, be it in the DPP or KMP administrations. He has refused many attempts to accept the nomination to be the premier of the cabinet by both KMT and DPP administrations. Under Perng’s leadership, the CB has maintained its role as a functional independent agency in the flux of political change. There have been no instances where the President or the premier have sought to influence CB’s monetary policy, even in financial or polit­ ical hardship. Aside from Perng’s leadership, however, the reputation of the CB’s previous governors and the historical practice are contributing to its independence and credibility. This independence may have contributed to Taiwan’s particularly low inflation rate of 1.2 per cent, which in 2014 ranked below the US, EU, and Canada, among others.27 The practice of the CB, as compared to the NCC, teaches a lesson: legal protection or institutional design of independence is not everything—the CB is not a stipulated independent commission, whereas the NCC is; in practice, however, the CB is much more independent than the NCC. This is because there are other factors besides institutional design at play. Leadership and political manipulation may influence the practice of an independent agency. The NCC suffered political manipulation at its inception and thus, despite judicial remedy and subsequent reorganization, it requires more effort to win back public confidence in the hostile political environment. In sum, legal protection or the institutional design may serve as a foundation for the independence of commissions, but not as a guarantee of political independence. Other factors may also contribute to the independence. If the leadership factor is so critical to the independence, maybe the power of nominating and appointing commissioners of independent commissions carries more weight than we normally envisaged. To what extent this may change the calculus of judicial scrutiny needs to be further explored.

26   Ben O. de Vera, “Global Finance Gives Tetangco Top Grade,” Inquirer.net, September 5, 10216, http://business.inquirer.net/214496/global-finance-gives-tetangco-top-grade (last visited March 27, 2017). 27   United States Central Intelligence Agency, The World Factbook, https://www.cia.gov/ library/publications/the-world-factbook/fields/2092.html (last visited Sep 9, 2016).

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5. CONCLUSION Independent commissions as an organizational form developed originally in the US and evolved into modern days. A similar concept was introduced into other political systems with divergent social contexts. In those systems, independent commissions often served different functions and had different institutional capacities compared to those in the US. The creation of the NCC in Taiwan exemplified a unique social context that makes the very conception of agency independence different from its American counterpart. Regime change, transitional constitutional order, the transitional justice deficit and global networking are salient features involving the creation of the first independent commission. Combined, these social backdrops form a model of independence beyond the conception of control or intervention. Broader institutional and operational capacity-building are  needed in order to live up to the social trust and contextual needs of democratic transition.

REFERENCES Barkow, R.E. (2010), ‘Insulating Agencies: Avoiding Capture Through Institutional Design’, Texas Law Review, 89: 58–64. Bressman, L.S. and R.B. Thompson (2010), ‘The Future of Agency Independence’, Vanderbilt Law Review, 63: 599–671. Datla, K. and R.L. Revesz (2012), ‘Deconstructing Independent Agencies (and Executive Agencies)’, Cornell Law Review, 98: 769–843. Devins, N. and D.E. Lewis (2008), ‘Not-so Independent Agencies: Party Polarization and the Limits of Institutional Design’, Boston University Law Review, 88: 459–98. Ginsberg, T. (2003), Judicial Review in New Democracies: Constitutional Courts in Asian Cases, Cambridge, UK: Cambridge University Press. J.Y. Interpretation No. 613 (2006), http://www.judicial.gov.tw/CONSTITUTIONALCOURT/en/p03_01.asp? expno5613, accessed 10 April 2009. Kagan, E. (2001), ‘Presidential Administration’, Harvard Law Review, 114: 2245–385. Lewis, D. (2003), Presidents and Politics of Agency Design. Stanford, CA: Stanford University Press. May, R.J. (2006), ‘Defining Deference Down: Independent Agencies and Chevron Deference’, Administrative Law Review, 58: 429–53. Pierce, R. Jnr, S. Shapiro and P. Verkuil (2004), Administrative Law and Process (4th ed.), New York: Foundation Press. Prado, Mariana Mota (2008) ‘The Challenges and Risks of Creating Independent Regulatory Agencies: A Cautionary Tale from Brazil,’ Vanderbilt Journal of Transnational Law, 41: 435-503. Sajó, A. (2004), ‘Neutral Institutions: Implications for Government Trustworthiness in East European Democracies,’ in János Kornai and Susan Rose-Ackerman, (eds), Building a Trustworthy State in PostSocialist Transition, New York: Palgrave Macmillan, pp. 29–51. Sajó, A. (2005), ‘Constitution Without the Constitutional Moment: A View from the New Member States’, International Journal of Constitutional Law, 3: 243–61. Strauss, P.L. (1984), ‘The Place of Agencies in Government Separation of Powers and the Fourth Branch’, Columbia Law Review, 84: 573–669. Uga, K. et al. (2009), Experiencing Independent Commissions: Japan v. Taiwan. National Taiwan University Law Review, 4(2): 183–226. Weiser, P.J. (2009), ‘Institutional Design, FCC Reform, and the Hidden Side of the Administrative State’, Administrative Law Review, 61: 680, 692. Yeh, J.-r. (1997). ‘The Cult of Fatung: Representational Manipulation and Reconstruction in Taiwan,’ in Graham Hassall and Cheryl Saunders (eds), The People’s Representatives: Electoral System in the Asia-Pacific region, St. Leonards, Australia: Allen & Unwin, pp. 23–7. Yeh, J.-r. (2002), ‘Constitutional Reform and Democratization in Taiwan: 1945–2000,’ in Peter C.Y. Chow (ed.), Taiwan’s Modernization in Global Perspective, Westport, CT: Praeger, pp. 47–77.

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Experimenting with independent commissions in a new democracy  217 Yeh, J.-r. (2007), ‘Globalization and government reform: challenges and tasks,’ paper presented at Globalization and Blocs: Lawyers’ Perspectives., 22–23 February 2007, Seoul, South Korea. Yeh, Jiunn-rong (2016), The Constitution of Taiwan: A Contextual Analysis, Oxford and Portland, Oregon, Hart Publishing.

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13.  Flag-bearers of a new era? The evolution of new regulatory institutions in India (1991–2016) Arun Kumar Thiruvengadam

This chapter provides a critical account of the emergence of a select few regulatory state institutions in India since the early 1990s, when the national government initiated a series of new economic policies. The creation and evolution of these institutions has arguably altered the landscape of Indian administrative law in fundamental ways, the significance and impact of which has yet to be carefully studied and understood. In describing the factors that influenced the formation and evolution of these new regulatory institutions, I analyze their original design and critically assess their functioning across the quarter century of their existence. The advent of economic liberalization in the early 1990s fundamentally altered the structure and operation of the Indian state as it had evolved across the post-independence era from the 1950s to the start of the 1990s. Consequently, the traditional concerns of many legal and political disciplines also underwent either a significant change or, at the very least, a major shift in emphasis. It is arguable that the emergence of new regulatory institutions has revitalized the subject of Indian administrative law. In the pre-1990 era, administrative law, following the colonial legacy and the trend in British administrative law in the 1950s and 1960s, focused primarily upon questions of judicial review of administrative action. Given this, the dominant emphasis of the field, as is clear from surveying the contents of some of the leading books, was primarily on the judicial institution and the vagaries of judicially determined doctrines of administrative law as they evolved over time (Sathe 2004; Jain and Jain 2013). The momentous events of 1991 heralded a series of changes in the economic, political and legal landscape that some believe ‘transformed India in the everyday’.1 The quartercentury anniversary of those events provides an auspicious occasion to reflect upon and review their consequences. These changes have given new prominence and emphasis to old questions within the discipline of administrative law in India. They include classic questions such as the proper role and relationship between state actors and society, and ‘between civil servants, state institutions on the one hand, and citizens, business firms, organized groups and non-citizens, on the other’ (Rose-Ackerman and Lindseth 2010, 1). However, these questions are now addressed by a new set of institutions within a changed policy environment. A leading scholarly account characterized the shift as transforming a ‘centralized, tutelary, interventionist state whose political and administrative elites were committed to the notion that they knew best and could do best’ into ‘an increasingly decentralized regulatory state and market economy whose politicians and entrepreneurs turned to voters, consumers and investors for ideas and action’. (Rudolph and Rudolph 1   This is the view of the biographer of the Prime Minister who initiated the economic reforms of 1991 (Sitapati 2016, 9).

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The evolution of new regulatory institutions in India  219 2001, 129). While the reference in this quotation is to constitutional institutions, including the judiciary, the Election Commission and the office of the President, this chapter focuses on regulatory institutions in a narrower, economic sense and includes regulators for the telecom, electricity and the financial sectors. The changes within the domestic economic, political and legal environment since the early 1990s have both indigenous and exogenous roots and influences. While contempor­ aneous accounts emphasized the external geopolitical forces that prompted policies of economic liberalization, more recently published accounts—relying on interviews with insiders—present a more complex account where domestic factors also played a decisive role (Mukherji 2014; Ramesh 2015). As one scholar argues, ‘[t]he ideas behind the reforms of 1991 . . . had been agreed upon for at least a decade within government circles’ (Sitapati 2016, 138). This chapter seeks to draw parallels with larger trends beyond India, especially in nations of the Global South that were experiencing similar challenges. Several scholars have noted the global proliferation of independent regulatory author­ ities in the 1990s. One study, which focused on 48 nations and 16 sectors across the period between 1920–2007, found that the number of newly established regulators ranged from less than five (between the 1920s–80s) to more than 20 (between 1990–2002), with a peak of nearly 40 new regulators between 1994–96, a period which was also very significant for regulation in India (Jordana et al. 2011). These independent regulatory institutions have been transplanted even to jurisdictions, such as France, with an established, administrative law culture based on civil law traditions that would suggest at least some incompatibility. It has been argued that in France, this phenomenon occurred due to a combination of ‘Americanization, Europeanization and Gallicization’ (Custos 2010). As this chapter seeks to detail, a similar argument could be made for the Indian story of independent regulatory authorities, where both external and internal forces played significant contributory roles in the emerging narrative. A recent and important collaborative work by scholars focusing on regulation across several countries of the Global South concluded that independent regulatory agencies were introduced in many developing countries, particularly in the utilities sector (usually consisting of telecom, water and electricity), as a result of powerful external pressures during the 1980s and 1990s (Dubash and Morgan 2013, 4). During this phase, the process of integrating national and regional economies into the global economy, combined with conditions placed on international loans (especially relating to the utilities sector) by international financial institutions, resulted in the creation of independent regulatory authorities in many countries across Latin America, Europe and several parts of Asia (Prado 2008). India fits this pattern well because, in March 1991, in the aftermath of the First Gulf War, it was confronted with a serious economic crisis that was reflected in a drastic dimin­ ution of its foreign exchange reserves, coupled with a ballooning of its short-term external debt. The conventional understanding has been that these cumulative crises caused a newly elected government to take emergency measures and to approach the International Monetary Fund which, in turn, imposed conditions on their lending that required drastic changes in economic policy (Ramesh 2015, 11–13). More recent scholarship has, however, drawn attention to a more complicated reality. By the late 1980s, even the Soviet Union had, thanks to the perestroika movement, altered its model of forced-pace industrialization, autarky and planning. This and India’s own disappointing record with policies of

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220  Comparative administrative law import substitution, which had produced fiscally unsustainable growth, caused sections of its technocratic elite and political leadership to seek a substantial change in policy direction. By the early 1990s, the ‘decline, desertion and eventual demise of the Soviet Union removed an external market and a source of imports that were sustained not by competitiveness but by a geopolitical alliance’ (Herring 1999, 329). A combination of these factors, according to a recent scholarly assessment, caused India’s policymakers to decide that aligning with ‘the globalizing economic system was a better alternative’ (Mukherji 2014, 33). In the decade that followed, India established a number of independent regulatory authorities across a range of sectors, including, but not restricted to, the utility sectors. It is important to emphasize, however, that these changes were brought about in each individual sector not only because of external pressures, but also because there was an internal demand for reforms among a small group of influential persons, located both within and outside government and the bureaucracy, who had been seeking to reform the institutions and culture of the old socialist state of the 1980s. These developments add nuance to a simplistic narrative of domestic agents bowing to foreign pressures. The Indian ‘regulatory state’ is characterized, as in other jurisdictions, by: an expanded role for markets; greater private sector participation in all facets of societies; and withdrawal of the state from the direct provision of services and as the dominant employer. The new regulatory state is said to have been motivated by a desire, held closely by at least some of its principal actors, for ‘greater reliance on institutions operating at arm’s length from government, insulated from daily political pressures, and embedding their decisions in technical expertise’ (Dubash and Morgan 2013, 3). A principal objective, apparently, was the hope that the new regulatory institutions would transform what was a hopelessly politicized governance culture into one that was rule-bound, apolitical and technocratic in its design and operation. It quickly became apparent that this was an unrealistic objective. Regulatory decisions are so embedded in politics that seeking to depoliticize them seems, perhaps with the benefit of hindsight, extraordinarily naïve. Although the politics of old institutions of economic regulation was transformed by the process of liberalization, politics itself was not eliminated. It is now clear that the new regulatory institutions which replaced or supplemented them are marked by their own complex politics (Dubash 2017, 230–36). The chapter is organized as follows: Section 1 focuses on the way the framers of the Indian constitution conceived of economic regulation, and reviews the post-independence experience with economic regulation until the early 1990s, before detailing the new regulatory institutions that emerged and analyzing some of their structural features, powers, capacities and limitations. Section 2 unpacks the concept of independence both conceptually and as it has been incorporated into the new regulatory institutions in India, before suggesting some ways to resolve the problems that these regulatory institutions have confronted.

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The evolution of new regulatory institutions in India  221

1. REGULATING THE INDIAN ECONOMY: THE CONSTITUTIONAL VISION AND THE POSTINDEPENDENCE EXPERIENCE (1950s–EARLY 1990s; 1991 AND BEYOND) New regulatory institutions, usually termed independent regulatory authorities, have emerged in several sectors in India, although their form, structure and process of appointments varies. This section focuses on a select few among the many new regulatory institutions established since the early 1990s. However, before doing so, it is important to get a sense of what preceded and shaped the regulatory landscape in the early postindependence period. 1.1 Absent in the Founding Vision? The Framers, the Constitution and Independent Regulatory Authorities The first point to emphasize is that these new regulatory institutions have no constitutional basis or grounding. The framers of the Indian constitution appear not to have felt the need for such institutions. Although they went beyond conventional constitutions that only set out the traditional three branches of government and gave constitutional status to unconventional institutions such as the Comptroller and Auditor General, the Election Commission and the Finance Commission, the framers did not specify the details of institutions housed in the traditional executive. This may have been because the framers, being themselves shaped by the thinking of their times, were nearly uniformly committed to the idea of a strong state that would lead and dominate the economic realm. There is clear evidence that some of the centrally important framers were influenced by ideas that emphasized the importance of a strong state for attending to India’s dire developmental needs. These ideas included Fabian socialism and early strands of Soviet socialism that counselled state control of the ‘commanding heights of the economy’. In this context, it is important to recall that while the framers were at work, their peers in government were the Democrats in the US (who, under President Truman, were still engaging with the New Deal state erected by President Roosevelt), Labour party politicians in the UK (who, under Prime Minister Clement Atlee, were creating the modern British Welfare State), and the Communist Party in the Soviet Union (where General Secretary Stalin had already erected the Command model of state control over the economy). The global consensus among developmental economists in the early 1950s—regardless of ideology or ­nationality—was in favour of a strong, dominant state, at least with respect to the economy. Not surprisingly, therefore, the framers of the Indian constitution assumed that control over economic decisions should primarily rest with the traditional institutions of government. The framers of India’s constitution adopted but altered British constitutional arrangements. Despite their strident anti-colonialism, the framers decided to persist with the Westminster form of parliamentary government that was already in place under colonial rule in India. However, they made important and substantial adaptations which have, arguably, fundamentally altered the nature of traditional Westminster government (Austin 1966). These new features included the insertion of a constitutional bill of rights and a strong judiciary with the power of constitutional review to ensure that the other

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222  Comparative administrative law branches of government adhered to constitutional values. These innovations were quite foreign to the traditional Westminster model. Yet, in many other respects, such as the privileges and immunities of members of Parliament, the framers chose to maintain British constitutional traditions. On matters of economic regulation, too, the framers maintained the fundamental notion of British parliamentary democracy that all public institutions have to be hierarchically accountable to the government of the day and, eventually, to Parliament. As scholars writing about other common law contexts have noted (e.g., Sossin, Chapter 10, this volume), the British vision of parliamentary democracy does not easily encompass independent regulatory authorities, which are an uneasy fit in the common law world (outside the US). This is because within this tradition, the basic principle of accountability is that all executive authority is ultimately accountable to Parliament. Therefore, trad­ itionally, economic regulation was undertaken by entities all of which were responsible to the executive, and specifically, to the relevant department or ministry within government. The concept of ministerial responsibility extended to all economic and regulatory bodies to ensure that Parliament was able to ultimately supervise and account for all institutions that were in theory under the control of the executive. In the Indian case, one innovation was the Planning Commission, which was an extraconstitutional body, created and headed by Prime Minister Nehru in March 1950. This non-statutory body, created through a mere executive resolution, became the most powerful institution in the country for directing economic planning, and was the main architect of the Five Year Plans, which determined economic policy in India until it was formally abolished in 2014. The Planning Commission was effectively a wing of the executive and often counted among its ranks cabinet ministers and senior bureaucrats. Its design and functioning represented a desire to maintain power within the executive and avoid scrutiny from Parliament and other constitutional actors, a goal that was largely achieved for much of its existence. The resolution creating the body stated that its aim was to create an ‘organization free from the burden of the day-to-day administration, but in constant touch with the Government at the highest policy level’.2 Conceived as a body to coordinate functioning between the Union government and the various state governments in relation to economic planning, its mandate was to make recommendations to the Union Cabinet. In its founding vision, the Planning Commission anticipated the concept of the ­‘developmental state’ that came to be associated with the East Asian states of Japan, Taiwan and Korea in the second half of the twentieth century. However, India’s relatively strong commitment to constitutional democracy, its adherence to the principles and structures of federalism, its failure to implement policies of primary education and land reforms, and its lack of a fundamental feature of the developmental state model— ‘a highly competent and autonomous national bureaucracy’ (Pempel 1999, 139)—raise doubts that it could have ever emulated that model. Instead, as the Planning Commission evolved, it came to be associated with the Soviet version of the developmental state model, characterized by ‘leaders and bureaucrats who were “plan ideological”, defining

2   Government of India, Cabinet Secretariat (1950), ‘Government of India’s Resolution setting up the Planning Commission,’ http://planningcommission.gov.in/aboutus/history/PCreso​ lution1950.pdf, accessed 9 October 2016, p. 26.

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The evolution of new regulatory institutions in India  223 their mission in terms of Marxian, class, and other objectives divorced from questions of economic efficiency’ (Pempel 1999, 139–40). The question of the degree of parliamentary accountability of ministers for actions of entities outside the traditional executive is an open and intriguing one for scholars of the administrative state (Somanathan 2016, 396). The independent regulatory institution, at least as conceived in the US case, is often located beyond the traditional executive. The rise of independent regulatory authorities across the common law world has much to do, as briefly adverted to earlier, with the influence of the US, of the ‘Washington Consensus’ and other geo-political factors in the last quarter of the twentieth century. In the middle of the twentieth century, following the practice in the rest of the common law world, the Indian framers were content to leave matters of economic regulation to the executive branch of government. However, adherence to the British parliamentary model does have consequences for the new regulatory institutions that were created in the 1990s, because they are an encrustation and a novelty in a system that otherwise works on the basis of the fundamental principle of accountability to Parliament. So, the notion of ‘independence’ creates problems for the internal logic of how accountability to Parliament works in respect of these new institutions. This tension is explored more fully in Section 2 where the notion of ‘independence’ is subjected to closer inquiry by focusing upon the structure and appointments process of these institutions, followed by a discussion of the ways in which they can be made accountable within the practices of Indian constitutionalism. At the time of independence, after nearly two centuries of rule by the East India Company and the British colonial government, India’s economy was dominated by privately owned firms. Although there was not much by way of industrial and commercial infrastructure, the steel mills, jute industries, and banks that existed were in private hands. The framers of India’s Constitution adopted a putative socialist philosophy (and enshrined aspects of it within the Directive Principles of State Policy) and the imperative of a planned economy. Under Prime Minister Nehru, India sought to implement a developmental state model within India, where the state strove to control the reins of economic, political and sociological power. In the economic sphere, this translated into central planning, expanding the public sector to create monopolies within government, and license controls. As a result, by the late 1960s, nearly all institutional economic activity was under public control (Bhattacharya and Patel 2005, 420). During the subsequent decades and lasting till 1990, public sector firms were the dominant actors in the economy. These public sector units and the departments of government to which they reported, functioned simultaneously as operator, manager and regulator. All regulatory duties and functions were performed by either the government itself, or by a body under governmental control. In turn, all of them were accountable—at least in theory—through the principle of ministerial responsibility to Parliament. 1.2 The Early Attempts at Introducing Independent Regulatory Institutions across the Utility and Finance Sectors (Telecom, Electricity and Securities) 1.2.1 Telecom The core idea of governmental control was manifest in the structure of the statute governing telecommunications regulation, which can help illustrate how the public sector’s

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224  Comparative administrative law monopoly worked in the utilities sector. The Indian Telegraph Act of 1885 enabled the Department of Telecommunications (DoT) which itself was located within the government of India, to simultaneously and exclusively perform the functions of policymaker, service provider and licensor. The DoT was responsible for all telecom services available in India in the pre-1990 era. Its functioning, across four decades of India’s post-independence period, fits the standard profile of monopolistic government-controlled telecom providers across developing countries, which are characterized by low tele-density and telecom penetration, poor service quality, and financially strapped incumbent operators (Buckingham and Williams 2009, 829). In the post-1991 situation, this became unsustainable, as the newly introduced pol­icies of liberalization required competition through the entry of private actors into many utilities sectors, and these policies were premised on a general openness to arm’s-length regulation in other sectors. The rationale for introducing independent regulators varied across sectors. In the utilities sector, the theoretical justification was to build confidence among private actors, who had to compete with government public sector companies while having the assurance that the rules of the game would not be changed to their disadvantage. However, a criticism of the rush to introduce independent regulators, both in India and globally, has been that regulation has to serve multiple purposes besides economic efficiency. These include serving the broader public interest and those of consumers. Good, sensible regulation also has to cater to concerns about equity, equal access and the environment (Dubash 2008). The worry is that independent regulators would be too single-mindedly focused on economic efficiency and would neglect other values. In the area of telecom, the National Telecom Policy of 1994 (NTP 94) declared that the principal motive of liberalization was to bridge the resource gap needed to meet the objectives of broader telecom access in the country. It acknowledged that providing highquality telecom services required financial resources that the government simply did not have; the shortfall in public resources was to be made up by inviting private investment. So, although private actors would bring in money, they needed to be confident that the government, which would also be a service provider itself through operators like the Bharat Sanchar Nigam Limited (BSNL) and the Mahanagar Telecom Nigam Limited (MTNL), would not manipulate the rules to give preference to their own operators. As it happened, a regulator was not initially part of the proposed plan, principally due to opposition within the DoT to the idea of an independent regulator. However, as the pol­ icies of liberalization proceeded, it became clear that the DoT’s claim that it would stay neutral as a policymaker, even when government service providers were competing with private operators, was unjustifiable. Ultimately, through the intervention of the Supreme Court, the government established an independent regulator, the Telecom Regulatory Authority of India (TRAI), in January 1996 through a temporary ordinance which was later given permanence in a parliamentary statute in 1997. Thus, though not part of the original scheme of liberalization, and resisted by the incumbent state agency, an independent regulator for telecom was eventually introduced. In its original form, the TRAI possessed both administrative and judicial functions. However, its adjudicatory powers were restricted and did not include the power to resolve disputes between the DoT and private service providers. In addition, it had only recommendatory powers, which the central government was not bound by. These weaknesses in its structures and powers led to a series of battles between the newly established regulator and the incumbent public sector

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The evolution of new regulatory institutions in India  225 operator, several of which spilled into litigation before the courts. These eventually had to be resolved by a high-level cabinet committee which restructured the TRAI’s constitution, a mere three years after the original law was passed. The TRAI Amendment Act of 2000 brought fundamental changes to the structure of TRAI. It divided the TRAI into two bodies—one to regulate, and the other to adjudicate disputes. The regulatory body would continue to be called TRAI but the adjudicatory body would be called the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and would be headed by a senior judge, serving or retired (Thiruvengadam and Joshi 2013, 148). The debate over whether the liberalization of telecom services in India served the public interest is still ongoing as the process plays out. Supporters of the process note that there has been a dramatic improvement in telephone connections (from 14.9 million in 1998 to 420 million in 2009), significantly lower tariffs leading to Indians enjoying some of the lowest call rates in the world, and widespread availability of cellular services. However, rural telephony continues to lag far behind, and many of the promised benefits of privatization have not materialized. More worryingly, the telecom sector has been the site of some of the biggest corruption scandals in the history of India, especially since the process of liberalization began in the early 1990s. The last scandal—involving the sale of 2G spectrum licenses—led, according to the official report filed by the constitutionally empowered Comptroller and Auditor General, to a loss of US $31.97 billion, an amount which would arouse outrage even in an OECD nation, let alone in a nation as poor as India. 1.2.2 Electricity The liberalization of India’s electricity sector followed a different trajectory, although there are common themes in the narrative. At the time of independence, nearly four-fifths of the power generation capacity of the country was provided by private companies or local authorities. The Electricity Supply Act, 1948 vested in the government of India the authority to provide all new power generation, transmission and distribution facilities. Since electricity is a subject in the concurrent list, it can be legislated upon both by the central government of India and by each individual state in India. As a result, every state in India structured its own State Electricity Board. These were financially structured through loans from the state government and operated under the ministry of energy of their respective state governments. By 1990, the State Electricity Boards functioned as near monopolies in the power sector, though a few private players continued to provide electricity services to cities (Dubash and Rajan 2001, 3368). Unlike in telecoms, however, the state-owned Electricity Boards ‘were remarkably effect­ive in accelerating the development of electricity services in India’ (Dubash and Rajan 2001, 3369). The public utility boards were responsible for increasing generation capacity by over 50 times, at the rate of 9.2 per cent per year which is quite high. However, a combination of political rather than technical and institutional factors showed that the system was nearly broken. In Dubash’s analysis, ‘the interaction between farmers hanging on to politically inspired electricity subsidies, industrialists rebelling against higher tariffs needed to support those subsidies, and affluent and increasingly mobilized urban consumers chafing against the poor service that resulted from a bankrupt sector’ caused a financial crisis of nearly unmanageable proportions (Dubash 2013, 101). To remedy the problem, Indian policymakers turned to the conventional wisdom

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226  Comparative administrative law among international experts and, specifically, the World Bank that counselled the virtues of private investment as a solution for the bankrupt domestic electricity sector (Dubash 2013, 101–2). The solution prescribed ‘unbundling’ the public sector and restructuring it to introduce new private players who would compete with each other with positive benefits to consumers. Following this standard formula, the electricity sector was to be restructured to attract foreign investment subject to independent regulatory authorities that could provide confidence to foreign investors. India’s federal system multiplied the complexity of reforming and regulating the electricity sector because it increased the challenges of coordinating among the many Indian states and the federal government. The state of Orissa was the first to create a State Regulatory Electricity Commission in 1996. This caused the central government to become concerned that there would be a flurry of state acts, which, in turn, caused it to enact the Central Electricity Regulatory Commissions Act, 1998. A few years later, the central government enacted the Electricity Act of 2003, which was to serve as an omnibus law that enshrined the formula for restructuring and regulation. Dubash is extremely critical of this overall process and argues that one of the founding objectives of inserting independent regulators in electricity was to ‘depoliticize decision-making’ in the sector, and to introduce the virtues of technocracy and rational decision-making. He argues that this attempt was a spectacular failure and demonstrates through the example of tariff setting in the sector that little changed on the ground; instead, a process of accommodation between the executive and the regulator allowed populist pressures to continue to play a substantial role in moderating tariff hikes (Dubash 2013, 113). Two decades since the introduction of the first independent regulator in the sector, it continues to be riddled with problems, many of which go beyond those that existed when restructuring was introduced. 1.2.3  Securities and finance In the securities and financial sector, the standard theoretical justification offered for regulation is that it seeks to: i) protect investors from misleading and fraudulent ­practices; ii) establish fair, transparent and efficient markets; and iii) reduce systematic risks ­(including through capital and internal control requirements) (Bhattarcharya and Patel 2005, 417–18). As with other sectors, there were prior legislative models in place to regulate securities markets in pre-liberalized India. In this case, it was the Capital Issues (Control) Act of 1947. This was complemented by the Securities Contract (Regulation) Act of 1956 which worked in concert with the relevant provisions of the Companies Act of 1956. The Securities Exchange Board of India (SEBI) was first established in 1988 as an advisory body. Its principal goals were to: i) collect information and advise the government on matters relating to stock exchanges and capital markets; ii) to license and regulate merchant banks, mutual funds, etc.; and iii) to prepare legal drafts for the regulatory and development role of SEBI. In 1992, SEBI was converted into a statutory body through the SEBI Act of 1992. Shortly thereafter, the Capital Issues (Control) Act of 1947 was repealed and SEBI became the successor of the Controller of Capital Issues. Prior to its creation, the financial regulators were the Ministry of Finance, the Department of Company Affairs, and the Reserve Bank of India, besides the individual stock exchanges. SEBI now interacts with all these agencies in regulating the financial sector. SEBI has five members, apart from the chairperson. Two members are drawn from the ministries of the government of India,

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The evolution of new regulatory institutions in India  227 one from the Reserve Bank of India, and two others are expected to be professionals and have experience or special knowledge of the securities markets. These latter two are also appointed by the government of India, which gives it wide powers of appointment, though the diverse sources of appointment enable SEBI to have some degree of heterogeneity in its membership. SEBI is the oldest of India’s new regulatory institutions and has developed a reputation for effective functioning over the quarter century it has been in existence, although the general perception is that it does not possess adequate powers to fulfil its ­regulatory mandate (Bhattacharya and Patel 2005, 454). Scholars who have focused on this issue have argued that the nature of securities transactions requires credible deterrence as a key weapon against fraud (Bhattacharya and Patel 2005, 454). It is for this reason that the US Securities and Exchange Commission is able to levy heavy fines, even as it ­operates in a more mature and transparent market. SEBI’s incapacity—or i­nability— to levy heavy fines has come, according to these scholars, at a great cost. It keeps retail in­vestors from subscribing to securities issues, which is a major impediment for ­companies in raising capital. For many of these retail investors, the severe securities scandal in 1991–92, where SEBI played the role of a hapless spectator on account of its nascent and feeble powers, is a reminder of the vulnerability of securities markets. Although SEBI’s powers have since been strengthened, it continues to be reluctant to make full use of its coercive powers.

2. EVALUATING THE POTENTIAL ADVANTAGES OF NEW REGULATORY INSTITUTIONS AND UNPACKING THE CONCEPT OF ‘INDEPENDENCE’ Drawing on the experience of these three regulatory institutions, this section provides an overall picture and analyzes the motivating logic and the conceptual vision of the notion of ‘independence’ that underlies their creation. However, these institutions may represent a high point; even as new regulatory institutions proliferate, the newest regulators have fewer powers than their predecessors (Dubash 2017, 234–6). 2.1  Overview of Regulatory Institutions in Contemporary India The snapshot history provided above captures the origins of three of contemporary India’s many regulatory authorities. A full listing of these institutions would number, as of 2015, about 25 (Somanathan 2016, 387–93). Some of these owe their origin to the pre-1991 era, such as the Reserve Bank of India, which was established in 1935 as a functionally autonomous regulator of fiscal and monetary policy. Similarly, the Atomic Energy Regulatory Board (created under the Atomic Energy Act, 1962), and the Central Pollution Control Board (set up by the Water Act, 1974) are examples of regulatory bodies that functioned in pre-liberalization India. However, these authorities do not have the same character and powers as those created in the aftermath of liberalization. The regulators created after the advent of liberalization generally tended to have stronger powers than their predecessors and also had structural features that were designed to guarantee more independence in day-to-day functioning. Among the more important of

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228  Comparative administrative law the remaining new regulatory institutions are the following: the Competition Commission of India (created under the Competition Act of 2002); the Insurance Regulatory and Development Authority (established under the Insurance Regulatory and Development Authority Act of 1999); the National Disaster Management Authority (created under the Disaster Management Act of 2005); the Office of Controller of Certifying Authority (established under the Information Technology Act of 2000); the Petroleum and Natural Gas Regulatory Board (under the Petroleum and Natural Gas Regulatory Board Act of 2006); the Airports Economic Regulatory Authority of India (established under the Airports Economic Regulatory Authority of India Act of 2008) and the Pension Funds Regulatory and Development Authority (created under the Pension Funds Regulatory and Development Authority Act of 2013). Among this group, some are part of the trad­ itional executive, some are housed outside but are still subject to a high degree of executive control, and others are more independent of direct executive control.3 A distinguishing feature of many of the new regulators is that they separate the dispute settlement function from the ordinary regulatory functions in the relevant sector. This trend may well be influenced by the experience of the telecom regulator, which, as we saw in the previous section, has, since 2000, had a separate institution—the TDSAT—performing the adjudicatory aspects of regulation in telecom disputes. The same trend was replicated in the competition (the Competition Appellate Tribunal) and electricity (Appellate Tribunal for Electricity) sectors. 2.2  Assessing the Potential Positives of New Regulatory Institutions A possible positive outcome of the introduction of new regulatory institutions is the creation of a new regulatory culture that relies on openness, transparency, consultation and reason giving. This is because, being inspired by the US example, many of these regulatory institutions were designed to follow procedures that allow for consultations with the public or, at least, with those affected by the prospective regulations. They were also supposed to provide explanations for their policy choices, thus moving away from the opaqueness and impermeability of the culture that existed in public sector companies across pre-1991 India. However, as noted by scholars who have assessed the value of such innovations in other polities, there is a risk that as a result of these processes, regulatory decisions get tilted in favour of narrow interest groups. By contrast, such a risk can be minimized by relying upon the elected political executive (Somanathan 2016, 400). The new institutions can also inject technical expertise into highly specialized sectors. Part of the problem with the public sector enterprises that dominated the pre-1991 economy was that they were run by the elite sections of India’s civil service, the Indian Administrative Service, who are trained to be generalists, but lacked the specific skills required in each sector. This is also the reason why India’s attempt at incorporating the developmental state model failed—its bureaucrats never gained either the specialized skills and expertise or the operational autonomy of, for instance, the Japanese bureaucrats in the Ministry of International Trade and Industry (MITI) as highlighted by Chalmers

3   There is a small body of literature on the functioning of these regulatory bodies, which notes that there is a high degree of overlap between them. See, for example, Singh 2009.

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The evolution of new regulatory institutions in India  229 Johnson in his classic study (Johnson 1982). In theory, many of the new regulatory institutions contain provisions for incorporating such technical expertise. However, in practice, what occurs is quite unchanged from the earlier situation. Most appointees to the regulatory institutions are drawn from the Indian Administrative Service as before. While some scholars have attributed the success of India’s democracy to the fact that India inherited the bulk of the officers who served in the colonial civil service, some others have noted that even in the twenty-first century, the training of these elite administrators has not changed much since the colonial era. They continue to be trained as generalists, and carry the colonial mindset, which is quite ill-suited to the demands of our current era, both from a psychological and a pragmatic perspective. More recently, there have been calls for thoroughly revamping the system to bring in competition from other sectors for highlevel appointments in the government bureaucracy (Guha 2016). While this may need consideration, it is amply clear that the generalist bureaucrat is poorly equipped to deal with the multifarious challenges within the specialized environment of the new regulators. Part of the problem may well be that the pay structures in these institutions are unable to attract professionals with the necessary expertise. This may be important to focus upon as these new regulatory institutions enter a phase of maturation and is also related to the issue of independence, addressed in the next section. As I argue below, appointing high-quality, skilled and non-partisan candidates to these regulators will enhance their credibility and independence. 2.3  Assessing ‘Independence’ against ‘Accountability’ in the New Regulatory Institutions For all of their problems, the public sector institutions which dominated the pre-1991 economy through their monopolistic conduct, were in theory accountable to cabinet ministers, and through them, to Parliament. Questions about the specifics of economic policy and its effectiveness in particular sectors could be, and often were, regularly posed in Parliament. However, this model did not prevent many problems in the public sector monopolies that eventually led to severe crises in various sectors. As noted earlier, this is a potential problem with at least some of the new regulatory institutions whose independence from the executive could lead to a break in this chain of accountability. Although ensuring accountability is an important consideration for any governmental or regulatory institution, it is all the more important for these new regulatory institutions in order to shore up their credibility and legitimacy in the eyes of the public since they are relative newcomers and have yet to develop operational legitimacy. That issue has been the focus of attention in many jurisdictions. The UK experience is particularly instructive for India, given the adoption of the Westminster system in the Indian constitution. The UK House of Lords studied this issue and released a report in 2004 on The Regulatory State: Ensuring its Accountability. The House of Lords study concluded that accountability should be achieved through a three-part approach: the duty to explain backed by robust processes; exposure to scrutiny, including but not limited to parliamentary scrutiny; and scope for independent review and appeals. It also sought a system of accountability where the regulator is accountable not only to Parliament, ministers and courts, but also to citizens, interest groups, consumer representatives, individual consumers, and regulated companies (House of Lords 2004). As noted in the previous section, adopting these measures in India would clearly be a great benefit because they

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230  Comparative administrative law would represent a substantial improvement on the regulatory culture that has subsisted in post-independence India. In a recent study of the role of the Indian Parliament in overseeing and regulating India’s principal regulators, Kaushiki Sanyal (2016) concluded that parliamentary oversight of India’s regulators is next to minimal at the current time. She suggests specific measures designed to increase the oversight powers of Parliament over the main regulators, including reviewing their budgets, by having special committees in Parliament to review their functioning, and by requiring parliamentary ratification of crucial ­appointments to such regulators. In an insightful essay, Martin Shapiro (this volume Chapter 14) provides an analytical account of the differing meanings of the concept of ‘independence’ that has shaped the evolution of independent regulatory agencies in the US (Shapiro 2010, 293–4). Shapiro notes that the American founders, Hamilton and Jackson, had different understandings of ‘independence’: for the former, independence was found in expertise, itself reflected in a civil service that would be shielded from politics. For Jackson, according to Shapiro, independence was reflected best in a pragmatic conception of democracy, which in turn led to a spoils system whereby the winning party staffs government service with its own people until the second party wins an election and replaces the other party’s people with its own. According to Shapiro, over time, the US conception of independence has evolved to become ‘a matter of degree, [motivated by] the desire to give some greater degree of shielding from partisan, party, electoral concerns than is given to non-independent ­agencies’ (Shapiro in this volume, p. 239). This is an important insight which has comparative resonance, especially in India, where the concerns of Jackson and Hamilton, as characterized by Shapiro, have considerable contemporary salience. The experience with public sector monopolies in the pre-1991 era left policymakers and independent commentators weary of overwhelming political influence over economic decisions, which required at least some degree of non-partisan, technical expertise. The desire for new regulatory institutions was perhaps unrealistically premised on the hope that their presumed technical expertise and measures to make them politically insulated would help them become more effective. As it has become clear that these hopes cannot be easily realized, there has been an attempt more recently to bring in new innovations to achieve the same goals. On a slightly different but related point, Mariana Prado has argued that comparative administrative law scholars should pay attention to the category of ‘bureaucratic resistance’ in shaping how the criteria of ‘independence’ is enshrined in the design of a regulator. Basing her findings on the Brazilian case, Prado argues that the fact that there was bureaucratic resistance to the introduction of an independent regulator in the electricity sector but not in the telecom sector, explains the fact that the electricity regulator in Brazil has weaker institutional guarantees for independence than the telecom regulator (Prado 2013). Once again, this has considerable explanatory power in showing why different regulators in India have enjoyed different degrees of independence, and consequently (in some cases), different degrees of effectiveness in projecting their credibility and legitimacy in the perceptions of stakeholders such as private players, consumer groups and members of the wider public. This is because, as in Brazil, Indian bureaucrats have often played a vital role in deciding whether an independent regulator could be introduced into a specific sector, and if so, what form and shape it should take. This is what explains, for instance,

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The evolution of new regulatory institutions in India  231 why TRAI was introduced only in January 1996, well after the process for privatization had begun with the sale of cellular licenses for specified cities in early 1992. My own view is that the traditional route of seeking parliamentary supervision to improve accountability of regulatory bodies may not work well in contemporary India, where its Parliament is quite ineffective in discharging such functions. A more fruitful avenue may be a focus on the appointments process. As noted earlier, a greater concern, at least in the contemporary period, is that appointees to these regulatory institutions are not often the best suited to their needs. In recent years, there has been a return to the old system of bureaucrats being appointed to regulatory institutions. India simply has not experimented with bringing in people from outside the bureaucracy. The experience of TRAI’s first chairperson—a retired High Court judge who flexed his limited powers to considerable effect—seems to have prompted fears in the traditional bureaucracy to avoid straying from the conventional path. Given the complexity of technical issues involved in regulatory decision-making, it is necessary to invest in a process that seeks people with the right mix of experience and credibility, especially for the technical aspects of regulation. Even for judges who are appointed to the adjudicatory tribunals, it is important that those chosen have some background understanding of the technical complexities involved in each sector. The era when a generalist bureaucrat or judge—however strong in the basics of administration or adjudication—could quickly adapt to a very demanding position as a regulator, may well be behind us. Further, given the multiplicity of regulators, there is also a need to coordinate processes of appointment and effective functioning across the regulators, perhaps through a common department in a single Ministry of the union government.

CONCLUSION This chapter has sought to provide the context against which a new set of regulatory institutions emerged in India across various sectors, numbering around 25 at the time of writing. Although some of these institutions date back to earlier periods, most of them originated in the wake of the sweeping changes wrought by policies of liberalization that were initiated under Prime Minister Narasimha Rao’s Congress government in 1991. Although this has resulted in some common trends, the regulation of three crucial sectors—telecom, electricity and securities markets—has evolved quite differently, often responding to the varying contexts in each of these sectors. I have focused on issues of independence and accountability which are gaining more significance as these regulatory institutions mature beyond their initial stages and are becoming more securely entrenched. However, whatever the institutional structure may be, no regulatory body can function well unless persons with the requisite skills are appointed to crucial positions within them. This requires persons who are not merely senior bureaucrats and higher court judges, but who, instead, have the technical training and experience that make them well suited to the demands of the new regulatory state.

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232  Comparative administrative law

ACKNOWLEDGMENTS I thank the following for their constructive comments on an earlier draft: the editors and in particular, Blake Emerson, Mathew Idiculla, Mathew John, Vikram Raghavan, Nick Robinson, Anshuman Singh, Kevin Stack, and Raeesa Vakil. Thanks also to Gaurav Mukherjee for research assistance. I alone am responsible for any deficiencies that remain.

REFERENCES Austin, G. (1966), The Indian Constitution: Cornerstone of a Nation, Oxford: Oxford University Press. Bhattacharya, S. and U.R. Patel (2005), ‘New Regulatory Institutions in India: White Knights or Trojan Horses’ in Devesh Kapur and Pratap B. Mehta (eds), Public Institutions in India, Oxford: Oxford University Press, pp. 406–56. Buckingham, A. and M. Williams (2009), ‘Designing Regulatory Frameworks for Developing Countries’ in Ian Walden (ed.), Telecommunications Law and Regulation, New York: Oxford University Press, pp. 829–82. Custos, D. (2010), ‘Independent Administrative Authorities in France: Structural and Procedural Change at the Intersection of Americanization, Europeanization and Gallicization’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, 1st ed, Cheltenham, UK and Northampton, MA: Edward Elgar, pp. 277–92. Dubash, N.K. (2017), ‘New Regulatory Institutions in Infrastructure: From Depoliticization to Creative Politics’ in Devesh Kapur, Pratap B. Mehta and Milan Vaishnav (eds), Rethinking Public Institutions in India, New Delhi: Oxford University Press, pp. 225–68. Dubash, N.K. (2013), ‘Regulating through the back door: Understanding the implications of institutional ­transfer’ in Navroz K. Dubash and Bronwen Morgan (eds), The Rise of the Regulatory State of the South Oxford: Oxford University Press, pp. 98–114. Dubash, N.K. (2008), ‘The Role of Independent Regulatory Agencies in Governance: A Brief Theoretical Review with Application to Electricity and Water in India’ Economic & Political Weekly 43(40), 43–54. Dubash, N.K. and S.C. Rajan (2001), ‘Power Politics’ Economic and Political Weekly 36(35), 3367–90. Dubash, N.K. and B. Morgan (eds) (2013), The Rise of the Regulatory State of the South, Oxford: Oxford University Press. Guha, R. (2016), ‘A Modest Proposal to Improve Governance’, Hindustan Times, August 27, http://www.hindu​ stantimes.com/columns/a-modest-proposal-to-improve-governance/story-CSbVP8DQuxYdszWT8RZKfK. html, accessed 9 October 2016. Herring, R.J. (1999) ‘Embedded Particularism: India’s Failed Developmental State’ in Meredith Woo-Cumings (ed.), The Developmental State, Ithaca, NY: London: Cornell University Press, pp. 306–54. House of Lords, The Select Committee on the Constitution, (2004), The Regulatory State: Ensuring its Accountability, 6th Report of Session 2003-04, 6 May, HL Paper 68-1, http://www.publications.parliament. uk/pa/ld200304/ldselect/ldconst/68/68.pdf, accessed 9 October 2016. India, Government of, Cabinet Secretariat (1950), ‘Government of India’s Resolution setting up the Planning Commission,’ http://planningcommission.gov.in/aboutus/history/PCresolution1950.pdf, accessed 9 October 2016. Jain, M.P. and S.N. Jain (2013), Administrative Law, India: Lexis Nexis. Johnson, C. (1982), MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975, Stanford, CA: Stanford University Press. Jordana, J., D. Levi-Faur and X. Fernandez I. Marin (2011), ‘The Global Diffusion of Regulatory Agencies: Channels of Transfer and Stages of Diffusion, Comparative Political Studies’ Comparative Political Studies 44(10), 1343–69. Mukherji, R. (2014), Globalization and Deregulation: Ideas, Interests and Institutional Change, Delhi: Oxford University Press. Pempel, T.J. (1999), ‘The Developmental Regime in a Changing World Economy’ in Meredith Woo-Cumings (ed.), The Developmental State, Ithaca, NY: London: Cornell University Press, pp. 137–81. Prado, M. (2013) ‘Bureaucratic Resistance to Regulatory Reforms: Contrasting experiences in Electricity and Telecommunications in Brazil’ in Navroz K. Dubash and Bronwen Morgan (eds), The Rise of the Regulatory State of the South, Oxford: Oxford University Press, 2013, pp. 75–98. Prado, M. (2008) ‘The Challenges and Risks of Creating Independent Regulatory Agencies: A Cautionary Tale from Brazil’ Vanderbilt Journal of Transnational Law 41(2), 435–503.

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The evolution of new regulatory institutions in India  233 Ramesh, J. (2015), To the Brink and Back: India’s 1991 Story, Delhi: Rupa. Rose-Ackerman, Susan and Peter Lindseth (2010), ‘Introduction’ in Susan Rose-Ackerman and Peter Lindseth (eds) Comparative Administrative Law, Cheltenham, UK and Northampton, MA: Edward Elgar. Rudolph, L. and S.H. Rudolph (2001) ‘Redoing the Constitutional Design: From an Interventionist to a Regulatory State’ in Atul Kohli (ed.), The Success of India’s Democracy, Cambridge, UK: Cambridge University Press, pp. 127–62. Sanyal, K. (2016), ‘Regulating the Regulators: Role of Parliament’ Economic and Political Weekly 51(3), 16–19. Sathe, S.P. (2004), Administrative Law, 7th ed, India: Lexis Nexis. Shapiro, M. (2010), ‘A Comparison of US and European Independent Agencies’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA: Edward Elgar, pp. 293–306. Singh, R. (2009), ‘The Teeter-Totter of Regulation and Competition: Balancing the Indian Competition Commission with Sectoral Regulators’ Washington University Global Studies Law Review 8, 71–105. Sitapati, V. (2016), Half Lion: How PV Narasimha Rao Transformed India, India: Penguin, Random House. Somanathan, T.V. (2016), ‘The Administrative and Regulatory State’ in Sujit Choudhry, Madhav Khosla and Pratap Bhanu Mehta (eds), The Oxford Handbook of the Indian Constitution, Oxford: Oxford University Press, pp. 386–411. Thiruvengadam, A. and P. Joshi (2013), ‘Judiciaries as Crucial Actors in Regulatory Systems of the Global South’ in Navroz Dubash and Bronwen Morgan (eds), The Rise of the Regulatory State of the South, Oxford: Oxford University Press, pp. 136–62.

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14.  A comparison of US and European independent commissions Martin Shapiro

A comparison of ‘independent’ agencies in the United States and Europe inevitably must address two questions. First, what do we mean by independence and from whom? Second, why do we want some agencies to be independent? I consider each issue in turn for the United States and the European Union.

1.  THE UNITED STATES No doubt a review of the whole history of public administration would reveal hundreds of administrative units in many times and places that correspond to whatever definition of ‘independent’ we choose to adopt. A comparison of contemporary US-European independent agencies safely may begin, however, with the US Interstate Commerce Commission (ICC) established in 1887. US agency independence begins in the context of government regulation of private business enterprise in a resolutely capitalist economy. 1.1  What is Independence? The Case of the ICC The ICC is the very model of, and indeed a principal source of, the more-or-less standard ‘law and economics’ model of capitalist regulation.1 The proliferation of rail lines owned by a host of separate private entrepreneurs led to a curious paradox. From the point of view of agricultural shippers, each rail line constituted a natural monopoly for the second nearest line would be too far away from any given farm to offer an economically feasible shipping alternative. From the railroads’ point of view, however, two, or often many more, lines that were indeed far apart in the agricultural hinterlands converged at the big city terminals, resulting in ruinous, rate-cutting competition. Moreover, the US was a highly fragmented federal system in which state-by-state regulation would subject interstate rail lines to multiple and potentially conflicting regulation. The result of all this was a consensus among politically powerful farmers and railroads in favor of national regulation that would assure shippers of relatively low rates and railroads of a reasonable return on investment. This consensus, however, occurs at a particular, and somewhat peculiar, time in American history, the Progressive Era. It is the intersection of regulatory consensus and Progressive political and administrative theory that yields agency ‘independence’ in the American sense. Two theories of public administration had coexisted in the US from the founding of

1

  In general, see Bernstein (1955) and Cushman (1941).

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A comparison of US and European independent commissions  235 the republic. A Hamiltonian theory had touted government by experts. The Jacksonian theory proclaimed that the average citizen should take a short time away from his plow to perform public service and then return to his fields. This would be ‘rotation in office’. Given American, competitive two-party, electoral democracy, Hamilton gives us a career civil service staffed by technical experts isolated from politics, and Jackson gives us the ‘spoils system’ in which the winning party staffs government service with its own stalwarts until the second party wins an election and replaces the other party’s stalwarts with its own. The spoils system and rotation in office dominated much of the American public service in the nineteenth century. To the Progressives, late in that century, such Jacksonianism led only to corrupt, inefficient government in an era of rapid technological change that demanded expert efficiency. The Progressive Era gave us nonpartisan elections, city managers to replace mayors, career civil services recruited by examinations that tested specialized technical knowledge and skills, and the commission form, that is, multi-headed administrative agencies. To put an agency ‘in commission’, that is, to replace a single executive head with a governing board, would reduce the chances of corruption as the commissioners watched one another. Or, at the very least, it would be more expensive and riskier to attempt to bribe three or five or seven commissioners than a single agency head. Independence was part of this Progressive package and went hand-in-hand with the commission form. The Progressives certainly subscribed to democracy and thus to some form of ultimate democratic accountability for public administration. There was a strong American consensus on the constitutional separation of powers. In general, the appropriate solution to the collision between the Progressive hostility to partisan, party politics and American dedication to democracy would be a federal, career, expert civil service serving under a democratically elected Chief Executive and his political appointees. There was, or should be, no Republican or Democratic way to pave a street. But the experts should be ‘on tap but not on top’. Government regulation of capitalist enterprise, however, might require some variant on this standard solution to what in Europe is called the ‘democratic deficit’ problem of the Progressives. Such intervention in the private sector called for particular vigilance in combating the downside of the democratic dimension of public administration, that is, the inclination of the democratically responsible public administrators to seek partisan, electoral political advantage. Here, of course, comes ‘independence’. At first glance, and with hindsight, the concept of the ‘independent regulatory commission’ first embodied in the ICC appears to involve independence from the President. What may appear, however, to be an attempt to isolate the ICC and later regulatory commissions from the institution of the Presidency is really much more an effort to insulate them from partisan, party attempts to seek electoral advantage through regulatory decisions. It is here that the connection between independence and the commission form becomes crucial. One paradox of the independent regulatory commissions is that they rather openly combine executive, legislative and judicial functions in a political system deeply dedicated to ‘three great branch’ separation of powers. However, precisely because of this dedication, the ICC and subsequent regulatory commissions were placed firmly within the executive branch. The commissioners are presidential appointees. The members of staff are members of the general federal civil service. The general administrative law rules and

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236  Comparative administrative law procedures that govern the rest of the executive branch govern the commissions. It is only in very long delayed retrospect that the Supreme Court tells us that unlike the executive department heads, the commissioners, while appointed by the President, do not serve at the President’s pleasure but may only be removed by him or her for cause. The sole, completely clear, and specific constitutional dimension of independence is thus a limitation on the President’s removal powers: almost 50 years after the establishment of the first independent commission, the Supreme Court held that the President could not remove a member of the Federal Trade Commission for political reasons, where Congress had provided for removal only for ‘inefficiency, neglect of duty, or malfeasance in office’.2 Congress had been thinking of independence in a somewhat different way; as independence from party, electorally oriented politics. What makes the ICC independent is far less its location outside of any of the cabinet departments than the statutorially prescribed terms of its commissioners. For the ICC and the later commissions, each commissioner serves for a longer term than that of the President, and their terms are staggered. Given the American competitive two-party system, typically at any given moment the Commission will enjoy a rough balance between Republican and Democratic commissioners. Indeed the statutes creating many of the later commissions formally require such a balance. Jacksonian rotation in office is turned to Hamiltonian purposes. Democratic party politics is too deeply ingrained to be denied, but it is denatured in the commissions by counteracting the partisan inclinations of one set of commissioners by those of the other. 1.2 Expertise Only a small corner of the claimed expertise of the ICC concerned itself with the physical operation of the railroads. Real ICC expertise had to lie in railroad bookkeeping. The basic purpose of the ICC was to serve as a surrogate for the free market setting of shipping rates. The ICC was to protect farmers from the too high rates that monopoly railroads would impose and to protect the railroads from the too low rates that ‘ruinous’ competition would impose when ‘too many’ roads served the same city. The ICC was to set rates that provided the roads with a reasonable return on investment, in short, rates the market would have produced but for the peculiarly high costs and rigidities of rail construction. In reality, the Commission exercised considerable rate-setting discretion (Huntington 1952). So the ICC developed an elaborate, ‘comparative’, rate-setting hearing pro­ cedure that facilitated participation by all interested parties, maximized the amount of cost and operating data available and added an aura of quasi-judicial legitimacy to the Commission’s technocratic legitimacy. Yet for all the claims of technocratic expertise, expertise does not really distinguish independent from non-independent agencies. In many countries in the world, including the US, there is plenty of technical expertise in many of the sub-units of many of the cabinet departments and ministries and plenty of claims of technocratic legitimacy. An ICC located within a Department of Commerce or Department of Transportation could have just as much claimed expertise as an independent rail regulator. 2

  Humphrey’s Executor v. U.S., 295 U.S. 602 (1935).

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A comparison of US and European independent commissions  237 What distinguishes the ICC and other commissions is not their levels of claimed expert­ ise, or their real expertise, but their claim that a two-party balance on the commission will balance any partisan, political incursions on that expertise. Thus its decisions will be more neutral, objective and market approximating than those of units within cabinet departments headed by single, party-identified and loyal, political notables. One might argue that the combination of legislative, administrative and judicial functions characteristic of US independent agencies is a distinguishing mark of independence. In reality, however, many sub-units of cabinet departments also mix the three functions, notably the Internal Revenue Service and the Social Security Administration. On both sides of the independence-cabinet alley, the word quasi is tacked on at the front of all three to preserve our separation of powers, constitutional sensitivities. 1.3  Administrative Law It is a truism, and indeed a true one, that the US executive branch does not operate under a single, unified code of administrative procedure. Instead, typically, the statute creating a particular agency and/or particular program prescribes administrative law provisions peculiar to that agency or program. In theory, the Administrative Procedures Act serves as a kind of residual cover resorted to when gaps occur in the procedural provisions of particular statutes. In reality, of course, a great mass of generally applicable US administrative law lies in judicial decisions interpreting the APA. For our purposes here, however, there is no need to untangle all of this complexity. It is enough to say that most of the tangle applies in roughly the same ways to both independent and non-independent agencies. If there is any distinction in federal administrative law between independent and nonindependent agencies, it consists of a kind of zone of uncertainty about the relationship between the presidency and the independent commissions. One aspect of that uncertainty involves ex parte communications. Presidential ex parte communication remains a highly uncertain area of administrative law as a check of any administrative law casebook will indicate. One of the uncertainties is whether the President legitimately has the same or less capacity to intervene in the quasi-judicial proceedings conducted by independent agencies than in those conducted within cabinet departments. Another uncertainty involves ‘legislative clearance’. Concerns for the President’s ability to effectively engage in policy coordination of the ever growing and highly fragmented executive branch are a constant of American political discourse (Neustadt 1990). Legislative clearance is the presidentially imposed requirement that executive branch agencies not submit their proposals for new legislation to Congress unless the Office of Management and Budget (OMB) has vetted them to be sure that they accord with the President’s policies. Although the independent agencies customarily do submit their proposed legislation for clearance, it is not clear that they are legally required to do so. Here again independence leads to uncertainty rather than a bright line. The Office of Information and Regulatory Affairs, within OMB, has given the President an additional surveillance mechanism. (For details on OIRA regulatory review, see Wiener and Alemanno, Chapter 20 in this volume.) It may be that independent agencies use their independence as a bargaining chip in their negotiations with OMB, but ultimately both they and the non-independent agencies share

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238  Comparative administrative law the same institutional power to submit whatever they like through friendly members of Congress who exercise the ultimate, indeed the sole, power of actually introducing legislative proposals. There is less uncertainty about the independent agencies’ degree of independence from Congress. The budgets of the independent agencies are set by the joint presidential­ congressional budget process. There is evidence that the independent agencies may be considerably influenced by the congressional committees that have jurisdiction over them and can offer the prospect of rewards or punishments in the budgets finally adopted by Congress. These committees can also threaten a committee hearing on agency practices that, at the least, require large expenditures of agency preparation time and, at worst, entail agency embarrassment and even the initiation of new legislative proposals hostile to the agency. And, of course, an independent agency may be attentive to congressional concerns because it itself is seeking new legislation that facilitates its operations (Weingast and Moran 1982). In all of these relationships with Congress, however, independent agencies essentially are no different from non-independent ones. US administrative law makes little or no distinction between the scope and intensity of judicial review of independent and non-independent agencies. All things considered, the American answer to the question: ‘Independent from whom?’ is clear enough. They are independent from partisan, electorally oriented regulatory decision-making to the extent that the representation of both parties on their multi­headed executives cancels out partisan favoritism. 1.4  Why Independence? The why of independence is clear for the prototypic independent agency, the ICC. Although it always had a small railroad safety mission, the essence of the ICC was its role as a surrogate for a competitive market as a rate and route setter. Achieving this goal depended on agency expertise in calculating shipping costs. Shielding such analyses from partisan politics made a good deal of sense, particularly in a polity that worshiped free enterprises. A number of the later independent commissions had rate and route regulatory powers, but a number, notably the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC), received powers to police economic misconduct of various kinds. At least in the Anglo-American legal tradition, such investigative and prosecutorial tasks are considered to contain a large discretionary component. Because the resources assigned to investigators-prosecutors are always limited, they must make choices about what to investigate and whom to prosecute, choices that are, in some sense, political. This type of discretion is particularly salient for federal regulatory agencies because of Congress’s notorious tendency to enact ambitious regulatory programs that it then consistently underfunds. Thus there was always a breach in the neutral, objective, expertisebased appeal of independence for the investigator-prosecutor independent agencies. If their decisions are necessarily discretionary, ought they not be politically controlled, just as prosecutors are controlled either through election or political appointment and ­dismissal? The FTC, which shares antitrust jurisdiction with the Justice Department, a line cabinet agency, highlights this anomaly. Why should there be both independent and non-­independent antitrust regulators?

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A comparison of US and European independent commissions  239 Safety, health and environmental regulation have been center stage in the late twentieth century and go beyond government regulation of private enterprise. Again there is hardly a bright line between independent and non-independent agencies. In spite of its alphabetical reference, the Environmental Protection Agency (EPA) is neither independent nor a commission, but a single-headed agency whose head is appointed by and serves at the pleasure of the President and normally attends cabinet meetings. A major safety regulator, the Occupational Health and Safety Agency (OHSA), although the statute creating it grants it a certain autonomy, is a sub-unit of a regular cabinet department, as is the Food and Drug Administration (FDA). The Nuclear Regulatory Commission is an independent agency granted both economic and safety regulatory powers over a new high tech industry. All in all, then, the why question about US independence cannot be answered clearly. It is not simply or solely to shield market-surrogate agencies that set price and service levels from partisan politics. It is not because certain regulatory functions are particularly or exclusively suited to independence. Antitrust, investigative prosecutorial, safety and other functions are to be found in both independent and non-independent agencies. It is not because neutral, scientific, objective, technological expertise can only be expected from independent agencies. Such expertise flourishes in many sub-units of cabinet departments as well. The best answer we can give to the American ‘why’ question is that independence is a matter of degree, the desire to give some greater degree of shielding from partisan, party, electoral concerns than is given to non-independent agencies – a little more Hamilton, a little less Jackson. The ICC and the commission setting airline rates and routes have been abolished. Their departure, however, is not due to disillusion with the independent regulatory commission form but only an instance of the late twentieth century vogue for deregulation. With their industries deregulated, there was no longer any need for the commissions as surrogates for competitive markets. The post-World War II creation of the Nuclear Regulatory Commission indicates the continued viability of the form, as does that of the Equal Employment Opportunity Commission, although it is not a classic regulatory agency. 1.5  Political Accountability Throughout their history the American independent regulatory commissions have posed two classic problems. One is political accountability. In a democracy, all parts of government ought to be accountable to the people. Of course, if the very purpose of independence is to shield certain regulatory decisions from partisan, electorally oriented politics, the have-your-cake-and-eat-it-too problem necessarily arises and probably is insolvable. During times of economic crisis, the SEC and the Federal Reserve, which is an independent agency, have come under fire. At such times, a modicum of democratic political accountability arises through congressional hearings and media attention. It is notable, however, that the political debate that then arises often is over whether or not to give such independent agencies more regulatory powers, not over reducing their independence. The other classic problem concerns presidential policy coordination within the executive branch. Given the size of that branch and the proliferation of units and sub-units, periodic waves of enthusiasm occur for strengthening the President’s coordinating

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240  Comparative administrative law powers. The independence of the independent agencies from partisan political pressures is, of course, achieved through an attenuation of presidential control. Here the response has been to somewhat strengthen the powers of the commissions’ chairs and to grant the President the power to designate the chair. The custom has arisen that at the beginning of each presidential term, commission chairs resign not only their chairmanships but also their seats on the commission and that the incoming President appoints a new chair. It is not at all clear, however, that this practice does much to enhance the President’s coordin­ ating powers. The coordination problem has not proved to be acute because the independent agencies have not been centers of policy innovation. They have not been prolific either in legislative proposals to Congress nor in their own rulemaking. In its early days the National Labor Relations Board, as intended, was very pro-union, but it has long since settled, first into a middle ground and then almost into quiescence as the union movement itself dramatically declined. The Federal Communications Commission has taken some steps concerning the broadcasting of nudity and four letter words and some more important ones concerning political fairness. Recently it has been caught up in the multitude of issues raised by the explosion of the new ‘social media’. Particularly noteworthy is its ruling to treat the internet as a common carrier.3 But overall, there have been few notable clashes between independent agency policies and those of the President.

2.  THE EUROPEAN UNION The European Union is a fascinating focus for comparative studies because it is so new that it is still in the process of inventing itself. One of its inventions is a great proliferation of independent agencies. To understand the EU, as opposed to the American, meaning of ‘independence’ requires a brief review of the structure of the EU (Hofmann and Turk 2006). The Council consists of a representative of each Member State, but its membership varies from the Member State prime ministers to the cabinet member relevant to the policy area under consideration. So sometimes it will consist of finance ministers and at others of ministers of transportation. It legislates, with some exceptions employing ‘weighted majority’ voting: that is, its members cast one or more votes on the basis of relative Member State populations. It has a permanent staff of European Union career civil servants. The EU Commission is its administrative arm. Its President and commissioners are political appointees of the Member State governments. The bulk of its staff are career EU civil servants. It is divided into Directorates General, each headed by a commissioner. Most EU legislation is implemented only indirectly through the Commission. Member State bureaucracies do the direct administration. Over time, the Parliament’s legislative powers have increased, but the Council remains the final enactor, and the Commission the sole proposer of legislation. Some lawmaking powers, subject to considerable oversight, have been delegated by the Council to the Commission. When exercising such

3   Federal Communications Commission, Protecting and Promoting the Open Internet, Final Rule, 80 Fed. Reg. 19738, (April 13, 2015).

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A comparison of US and European independent commissions  241 delegated lawmaking powers and, more generally, in constructing legislative proposals, the Commission employs what has come to be known as the comitology process which requires some special explanation (Hofmann and Turk 2006, Chs 4, 13, 15). When considering a particular policy initiative, the Commission typically appoints an ad hoc committee with a membership of appropriate subject-matter experts from both the public and private sectors of the Member States. At any given moment, it is hard to tell how many or what committees there are or their current membership. There may or may not be opportunities for outside participation in their discussions. Transparency is low, although after a long and never-really-over fight, the Parliament has obtained the means to monitor committee proceedings. The Commission maintains control through its chairmanships of the committees, and all committee proposals flow back to the Commission which, as noted, has a monopoly power over actually introducing new ­legislative proposals. 2.1  Independent Agencies in the EU If we tentatively define an EU independent agency as an administrative agency that is not a sub-unit of one of the Directorates General (DG) of the Commission, a few were created by EU legislation very early in the history of the then European Communities. Two subsequent waves of creation occurred in the mid-1990s and at the turn of the century. As with the US Federal Reserve, the European Central Bank is an independent agency, but will not be considered here because central banks have a character all their own. In the US, the Supreme Court accepted the ICC and other early commissions with little concern about the separation of powers. Subsequently, it created an even greater separ­ ation of powers anomaly by limiting the President’s powers to dismiss commissioners. In contrast, the European Court of Justice early ruled that units outside the DG framework were, nevertheless, legal dependencies of the Commission because no such organizations had been specifically provided for in the treaties establishing the Union (Case 9/56 Meroni v. High Authority [1957–58] ECR 133). Today there are over 30 EU independent agencies, with some units so anomalous as to defy classification. Roughly speaking, they fall into three categories. A few, such as the Office for Harmonization in the Internal Market and the Community Plant Variety Office, assign Union-wide marketing rights that are in the nature of patents. In this sense, they are clearly regulatory agencies. At the opposite extreme, a substantial number simply gather and disseminate information on particular topics such as vocational training and coordinate discussions among Member State civil servants and other experts. A large number of agencies engage in ‘soft law’ making of various sorts. A few administer funding programs. Many engage in indirect regulatory implementation through their relations with Member State bodies. Some, such as the Fisheries Control Agency, do some direct regulation. None of the agencies has ‘hard law’ making powers, that is, delegated lawmaking powers or the power to issue legally binding rules, a power exercised by many independent and non-dependent US agencies. As noted earlier, Member States administrations implement most EU legislation. In contrast to the US, few EU agencies directly administer regulatory or other programs. All EU organs, including the agencies, are subject to provisions of the EU treaties

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242  Comparative administrative law requiring that they ‘give reasons’ and respect a ‘right to good administration’.4 For judicial review purposes, these norms can function like the notice-and-comment, statementof-basis-and-purpose and arbitrary-and-capricious provisions of the US Administrative Procedures Act. How far US-style ‘hard look’, ‘partnership’, review has developed in the EU currently is a matter of debate (Shapiro 2002a, 2002b, Nehl 1999). The Court of Justice and the Court of First Instance, which hears most challenges to EU administrative actions, may well be developing a dynamic similar to that which developed between the Supreme Court and the DC Circuit, with one trying to rein in the activism of the other. As we shall see, however, the prevalence of ‘soft law’ making in the independent agencies, plus the scarcity of direct regulatory implementation by them and their inability to make rules that have the force of law, yield far fewer opportunities for judicial review than in the United States. Very searching judicial review, however, is built into the decision-making processes of the agencies able to grant patent-like rights. 2.2  Independent of Whom? In the purely formal legal sense, the independent agencies are not independent at all. They are, unless and until the Court of Justice changes its mind, dependencies of the Commission. It can only be said that they are independent of the permanent staffs of the DGs. Their operations are conducted largely independently of day-to-day Commission operations, but their chairs, who are Commission staffers, exercise considerable control. As in the US, the crucial dimension is independence from partisan, electorally oriented politics. The EU as a whole is said to suffer from a major ‘democratic deficit’ problem. The Council is indirectly democratic. Member State voters select their national governments. Their national governments then send cabinet ministers to be the Council. The President of the Commission is chosen by the Member State governments. A balance of Member State citizens is maintained in the appointment of heads of the DGs. The dominant theme of national influence over the appointment of the political executives of the Commission remains. The heart of the Commission is its staff, drawn from a competitively recruited, merit-based, career, civil service which defines itself as a set of experts serving Europe, not their states of origin. The Commission is supposed to and generally does serve as a transnational counterweight to the national interests which meet and negotiate in the Council. In the US, independence is independence from, or, at least, attenuation of, a party pol­ itics seeking electoral advantage. The politics most feared in the EU is not party politics in the direct sense. There are no EU-wide political parties, and only the Parliament is a product of EU elections. Rather the fear is influence from politicians oriented to their fate in Member State elections. Although not all the independent agencies have exactly the same structure, typically they reflect the tension between national political interests and optimal EU perform­ ance. Most have executive boards consisting of appointees from each Member State. Thus, like US independent commissions, EU independent agencies employ the commission or multi-headed form as a mode for integrating politics into administration. 4

  Charter of Fundamental Rights of the European Union, Art. 41.

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A comparison of US and European independent commissions  243 The EU-Commission form, however, unlike the American, does not attenuate the most feared political influence; rather the form accentuates it. The EU agency structure is a microcosm of the balance between national and transnational interests struck by the Council-Commission relationship. The agency executive boards are mini-Councils and the working staff mini-Commission. So, at least in formal structure, the EU independent agencies are independent neither of the Commission nor of Member State political interests. In this sense, about all they are independent of is the DGs, and they are somewhat more distanced from overall Commission control than the DGs. Yet their interactions with the DGs have become quite close over time. 2.3  Why Independence? So why this problematic form of independence? Like US independent agencies, EU agencies emphasize their specialized expertise. Like US agencies as well, however, the many sub-units of the non-independent departments under the DGs claim a level of expertise. The difference from the US is that, in theory at least, EU independent agencies are even more subject to, rather than less subject to, electorally oriented politics than the sub-units of the line departments. So the reason for independence is not essentially about privileging either expertise or efficiency. It is tempting to seek the causes of the proliferation of EU independent agencies in the dynamics of the EU itself. That proliferation occurred, however, at the same time as Member States were also creating many new independent agencies. So attention must be paid to general European causes as well. The ‘crisis of legitimacy’, like the rise of the middle classes, seems to be constantly with us as an all-purpose explanation of whatever is going on at whatever time and place. Yet it is certainly true that denunciation of government bureaucracy is a central theme of modem political discourse on both sides of the Atlantic. In Europe, precisely because of proud traditions of high esprit de corps, career, technically expert, supposedly politically neutral, state civil services, unadulterated by Jacksonianism, the hostile reaction to government bureaucracy has been acute. That hostility has concentrated on the cabinet departments, that is, the ministries staffed by career services, because that is where the bureaucrats manufacturing the red tape were located. Paradoxically, if you hate the ministry administrators, but find that you need new administrative tasks to be done, about all you can do is place the new administrators you need outside the ministries you hate. One general European cause of independent agencies is the desire not to further bloat what are seen to be already over-bloated ministry bureaucracies. To put the same matter in somewhat different terms, subsequent to World War II we experienced a grand vogue for ‘new administrative management’ or ‘new public ­administration’, in which the citizenry are supposed to be seen as clients to be served rather than subjects to be ordered about. Critics inevitably saw the old line agencies or ministries as strongholds of the old public administration. The very elitism and high esprit de corps their bureaucracies projected appeared to be the principal barrier to the introduction of new client-serving reforms. Perhaps the creation of new agencies outside the ministries could be a vehicle for ringing out the old and ringing in the new management. The fall of socialism results in the need for new regulation. Free markets only work if

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244  Comparative administrative law they have rules. If, however, we are deregulating or privatizing certain enterprises in order to achieve greater efficiency than under the old regime, it hardly seems to make sense to turn over the new regulatory tasks to exactly the same ministries that produced the old inefficiencies. So here again the reaction to old bureaucracy tends to be the creation of new bureaucracies. Independence is independence from the ministries. One element of independent agency proliferation has been the creation of ‘rights’ or anti-discrimination agencies. Here, again, the very merit-based elitism that the old ministry civil services claimed as their principal virtues rendered them citadels of white, male domination. It hardly seemed right to put the anti-discrimination bow in the hands of the discriminators. New anti-discrimination independent agencies could be established outside the ministry old boy net. On both sides of the Atlantic, organization forms can be highly visible declarations of priorities. Any new administrative activity placed in a department or ministry is likely to sink into the complexity and obscurity of the organization chart. The creation of a new independent agency declares a high priority. Environmental, consumer protection, anti­ discrimination, energy and other policy concerns can be highlighted by independence. The traditional political neutrality of ministry-based administration has been under­ cut in many EU Member States by increased political influence over appointments to high-level ministry positions. As ministry career staffs appear less independent or neutral, the appeal of independent agencies no doubt increases. Interests that were not well represented in the ministries were likely to find independent, clientele-oriented agencies a particularly attractive option. Against this national background, it is possible to identify some of the causes of EU independent agency proliferation. As the administrative arm of the Union, the Commission has experienced much of the general hostility to bureaucracy prevalent in Europe. This quantum of hostility is greatly multiplied by hostility to the EU in general. From its beginnings as essentially a free trade zone, the union has developed into a major European regulator and a massive source of subsidies, particularly of agriculture. In their very nature, these activities threaten deeply entrenched, highly vocal local interests. There is a constant barrage of animosity directed at ‘Brussels’ and ‘the Eurocracy’. The Commission administers regulations and subsidies. Unlike the Council and Parliament, the Commission structure does not embody Member State interests. The Commission has suffered a number of specific administrative failures and possible malfeasances. The growth of EU regulation inevitably leads to a growth of its staff and denunciations of Commission empire building. One obvious response to all the anti-Commission-Brussels-Eurocracy sentiment has been to take advantage of the general European vogue in independent agencies by channeling some of the desired growth in Union administrative resources, not to the Commission itself, but to new agencies ostensibly independent of the Commission. Significantly, the headquarters of these agencies have not been placed in Brussels but distributed among major cities of the Member States. They are specialized in particular functions or policy areas. They are located ‘outside’ the Commission organizationally and physically. Most of them have quite small permanent staffs. Whatever policy proposals they come up with can be formalized into legally binding norms only by submission to the Commission for possible submission to the Council-Parliament legislative process. So, ultimately, the why of independence is to render more palatable the expansion of

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A comparison of US and European independent commissions  245 the EU administrative and regulatory bureaucracy by placing some of it ‘outside’ the Commission and outside Brussels, while subjecting it to some institutional visibility and approachability. 2.4  European Problems The EU agencies raise serious democratic deficit problems. One answer to these problems is the substitution of technocratic for democratic legitimacy (Majone 2001). The independent agencies are staffed by specialized experts seeking technically correct, economic­ ally efficient and thus politically neutral outcomes. This answer has not proved entirely convincing for the independent agencies. Although staffed by experts and providing meeting places for specialists, typically they are headed by boards, composed of experts to be sure, but each representing one of the Member States. Like the US too, this design aims to balance differing political interests – in the European instance, national ones rather than partisan, political party ones. And in the European instance, there is further tempering because the national representatives are supposed to be drawn from their nation’s technical experts, rather than from among its politicians. To a degree, of course, there is more or less of this tempering in the US as well. Many US Commissioners do have strong backgrounds in the specialized practices they regulate. Ultimately, the balance between Member State representation, and thus, at least, some indirect electoral accountability, and expert, technocratic legitimacy was struck on the side of technocracy for the EU independent agencies, but, nonetheless, there is some balance. Staff members themselves, while emphasizing technical expertise, profess strong allegiance to democratic values. Two other problems are the same as those that arise in comparable US agencies: policy coordination and transparency-participation-democratic accountability. A third is ­judicial review, although that may be viewed as an aspect of the second. The Commission structure is essentially Weberian, with the usual potential for co­ordination presented by such structures. As in the US, the multiplication of ­independent agencies outside that structure of ministries subordinate to a cabinet and chief executive creates problems of both policy and implementation coordination. Along one dimension, coordination problems are far less pressing in the EU. None of the EU independent agencies has formal rulemaking or delegated legislative authority. All of their decisions apply only to the immediate parties. Any legislative proposals they come up with must be submitted to the Commission. There is no back door. In American terms, ‘legislative clearance’ can be absolutely enforced. For agencies that award patent-like, marketing rights, however, precedential patterns of individual decisions are likely to function like legal norms beyond any direct control by the Commission. Information and ‘soft law’ functions of the agencies will generate pressures for policy change partially beyond Commission control. Paradoxically the multiplication of Member State independent agencies in parallel to the multiplication of such EU agencies has somewhat reduced coordination problems within each policy area considered separately. Each EU agency has become a locus of communication among its comparable Member State independent agencies and in most instances has also become closely tied to its relevant Commission directorate thus achieving some level of coordination. Coordination across policy areas, for instance,

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246  Comparative administrative law e­ nvironment and consumer protection occurs to some degree in the relationships between the various directorates and their bundles of independent agencies within the overall structures of the Commission designed to coordinate its subordinate directorates. A further move toward coordination within particular policy areas may be seen in the transformation of what were rather loosely connected regulatory ‘networks’ of parallel Member State regulatory bodies into EU independent agencies with their more formally centralized structures. The second problem, that of transparency, participation and electoral accountability, is a complex one.5 On the one hand, the agencies are at least more transparent and open to outside participation than the committees that comprise the ‘comitology’ process which had been central to much EU policy innovation and implementation. As a need for new EU governance was recognized, the Commission constructed an ad hoc committee of no fixed location, structure or membership, typically composed with some consideration for both Member State representation and technical expertise, that sporadically issued policy recommendations. The new EU independent agencies are, at least, more formally institutionalized. We know which ones exist, where they are, who staffs them, and that all this will be the same tomorrow as yesterday. On the other hand, the agencies present still another layer of institutional complexity in a governing system that most Europeans understand poorly. The principal problem of transparency and accountability, however, lies along another dimension. Most of what the agencies do is generate ‘soft law’. Initially, the early independent agencies, for instance the Environment Agency, proclaimed that they did not contribute to the democratic deficit because their sole function was to gather and disseminate science-based information. Yet, the flow of information may have crucial policy consequences. Beyond information, the agencies sponsor an array of recommended ‘best practices’, reports and study papers designed to facilitate coordination among Member State bureaucracies, conference and consultative meetings for national bureaucracies and model rules and recommended guidelines. Most of these outputs are ‘soft’, taking the form of nonbinding communications to and among Member State regulators. Moreover, there tends to be a constant flow of such discourse, with each new bit slightly modifying the messages of the earlier bits, so that outsiders, those not in a position to swim continuously in the stream, find their sporadic interventions quickly diluted or swept away. Because most of the agencies serve as loci of communication among Member States’ specialized expert bureaucracies, seeking to ‘coordinate’ their implementation of EU norms, there is the strong suspicion that some this coordination is actually end runs by national ministry bureaucracies and independent agencies around their politically responsible cabinet ministers in order to get policies out of the EU that they could not get out of their own governments, thus adding to the democratic deficit. Agency pronouncements can arm national bureaucratic experts with the clout to tell their ministers and their publics that they must do what the EU says. And what the EU says is often the collective voice of national technocracies. It is doubtful that the executive boards of the agencies, appointed by Member State 5

  In general, see Scholten (2014).

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A comparison of US and European independent commissions  247 governments to safeguard their interests, introduce a very significant element of polit­ ical control. The national board members are supposed to be experts. Most of them are drawn from national government bureaucracies or universities or research centers, most of whose professors and principal researchers are, in the European tradition, government employees. All these people are more likely to represent the views of national bureaucracies than of national politicians. Moreover, each agency board is a set of experts sharing the same expertise. When board members who are nuclear engineers check on agency staff nuclear engineers who are acting in a joint, collaborative ‘coordination’ with Member State nuclear engineers, it is far more likely that the professional norms and interests of nuclear engineering will dictate outcomes than that the demos, either EU or national will have much influence in spite of the professed allegiance of agency boards and staffs to democratic values. All in all, then, the EU independent agencies tend to augment the technocratic aspects of EU governance. There is, however, a major counter to this technocratic trend. The subject-matter committees of the European Parliament now maintain an active watch over their relevant independent agencies, and through its participation in the enactment and amendment of the legislation establishing the agencies and defining their powers, the Parliament is capable of, and sometimes engages in, active intervention in agency policymaking and implementation.

CONCLUSION Both US and EU independent agencies are independent in the narrowest sense, that is, they fall outside any cabinet department or ministry organization chart. Both are designed to strike a balance between democracy and technocracy on the technocratic side. Both seek to do so by attenuating the influence of electorally oriented politics. Here, however, there is a major difference. In the US, the political influence of party politics is attenuated by a commission form calculated to balance the political clout of the two parties. In Europe, the political influence of Member State governments is fully admitted through the shared, specialized, technical expertise of board members, staff and participating national bureaucracies. In both the US and EU, almost the same rules of administrative procedure apply to line and independent agencies. In both, judicial review has been relatively, if somewhat controversially, active. Because EU agencies mostly do not have rulemaking power, are involved only indirectly in the implementation of most regulations, and deal largely in soft law rather that legally binding decisions, judicial review is generally much less intrusive in the EU than in the US, and is often completely unavailable. So the US tendency for review to force greater transparency and participation in administration is not nearly so strongly felt in the EU as in the US. Both US and EU independent agencies generate serious problems of policy coordin­ ation, but ones that tend to become salient long after the creation of the agencies. In both, the agencies rise out of a curious paradox. The distrust of government administration leads to the creation of more, and more fragmented, administration. In the final analysis, however, US independent agencies were created to reduce the evils of partisan, party pol­ itics while EU independent agencies were created to increase EU administrative resources without obviously expanding the size and resources of the ‘Brussels Eurocracy’ that is the

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248  Comparative administrative law Commission. However, in reality, the Commission’s dominance may have been largely retained or even enhanced. It is noteworthy that most of the newer EU independent agency creation has been in areas of social policy rather than that of economic regulation which is of most interest to the Council and that, even in those areas, new agencies have come to establish ever closer relations with their relevant directorates.

REFERENCES Bernstein, Marver H. (1955), Regulating Business by Independent Commission, Princeton, NJ: Princeton University Press. Cushman, Robert E. (1941), The Independent Regulatory Commissions, New York: Oxford University Press. Geradin, Damien, et al. (2005), Regulation through Agencies in the EU, Cheltenham, UK and Northampton, MA: Edward Elgar. Hofmann, Herwig and Turk, Alexander (2006), EU Administrative Governance, Cheltenham UK and Northampton, MA, USA: Edward Elgar. Huntington, S.P. (1952), ‘The Mirasmus of the ICC’, Yale Law Journal, 66, 76–147. Kreher, Alexander (ed.) (1996), New European Agencies, Florence: European University Institute. Majone, G. (2001), ‘Nonmajoritarian, Institutions and the Limits of Democratic Governance: A Political Transaction-cost Approach’, Journal of Institutional and Theoretical Economics, 157, 57–78. Nehl, Hanns P. (1999), Principles of Administrative Procedure in EC Law, Oxford: Hart Publishing. Neustadt, Richard E. (1990), Presidential Power, New York: Free Press. Rittberger, B. and Wonka, A., (eds.) (2012), ‘Agency Governance in the EU,’ Journal of European Public Policy, special issue, 18, 779–925. Scholten, Miroslava (2014), The Political Accountability of EU and US Independent Regulatory Agencies, Leiden: Netherlands and Boston, USA: Brill Nijhoff. Shapiro, M. (2002a), ‘The Giving Reasons Requirement,’ in Martin Shapiro and Alex Stone Sweet (eds), On Law, Politics and Judicialization, Oxford: Oxford University Press. Shapiro, M. (2002b), ‘The Institutionalization of European Administrative Space’, in A. Stone Sweet, W. Sandboltz, and Neal Fligstein, The Institutionalization of Europe, Oxford: Oxford University Press. Weingast, B.R. and Moran, M.J. (1982), ‘The Myth of Runaway Bureaucracy – The Case of the FTC,’ Regulation, 5, 33–8.

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PART III TRANSPARENCY, PROCEDURE, AND POLICY-MAKING

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15.  Citizens and technocrats: an essay on trust, public participation, and government legitimacy Susan Rose-Ackerman

No government by experts in which the masses do not have the chance to inform the experts as to their needs can be anything but an oligarchy managed in the interests of the few. And the enlightenment must proceed in ways which force the administrative specialists to take account of the[ir] needs. The world has suffered more from leaders and authorities than from the masses.   The essential need, in other words, is the improvement of the methods and conditions of debate, discussion and persuasion. . . . Inquiry, indeed, is a work which devolves upon experts. But their expertise is not shown in framing and executing policies, but in discovering and making known the facts upon which the former depend. . . . It is not necessary that the many should have the knowledge and skill to carry on the needed investigations; what is required is that they have the ability to judge of the bearing of the knowledge supplied by others upon common concerns. John Dewey, The Public and Its Problems (1927, 208–9)

According to John Dewey, public participation is essential to democratic accountability and legitimacy. The right to vote for representatives is a necessary condition for democracy, but there is much dispute over the importance of legislative deliberation, and over the rights and responsibilities of citizens beyond casting a vote. Administrative government further complicates the question of democratic legitimacy by moving policymaking outside of both the electoral process and the legislative chamber. This raises a fundamental question for administrative law, in particular, and democratic theory, in general. Given the practical requirement of delegating policymaking and implementation to the executive in a modern regulatory-welfare state, how can democratic values be preserved when decisions require expertise and officials must make decisions quickly in a rapidly changing environment? At a minimum, trust in the impartial application of existing laws by the executive is a necessary condition for good administration (Rothstein 2011). However, it is not a sufficient condition, and it is valuable not only in democracies but in authoritarian systems as well. Impartiality assumes a background set of laws and policies that state institutions administer using fair procedures, but it leaves to one side the processes which produce those laws and policies in the first place. Those processes are my concern. I ask how the generation of broad policies can be consistent both with the competent use of expertise and with accountability to citizens and other interested groups. To me, accountability implies transparency about what decisions are to be made, openness to outside input, and reasoned decisions that are publicly accessible. Impartiality, in contrast, relates to the implementation of policies, not policymaking. It implies nothing about the particulars of substantive policy or about the legislative and rulemaking processes that are my focus here. True, certain discriminatory policies may be prohibited by constitutional provisions and human rights norms, but, in general, politicians and government officials can select which substantive policies to support. In that respect, I ask how public policymakers 251 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 251

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252  Comparative administrative law can credibly commit to using expertise to inform their decisions at the same time as they include citizens in policy choices. What are the practical options for citizen involvement and input from organized groups, such as, industry associations, labor unions, environmental and human rights groups? Would higher levels of both technical competence and public involvement limit corruption and other forms of self-dealing? This chapter concentrates on the connections between expertise and public participation in the production of public policy. It is part of a larger project on the successes and failures of efforts to encourage participation and to incorporate state-of-the-art expertise. Section 1 unpacks the concept of public participation and the way it can affect policymaking and implementation choices, for good or for ill. Section 2 concentrates on one specific case, the German Energiewende (energy revolution) that aims to increase the generation of electric power from renewables at the same time as it phases out nuclear power. The German case demonstrates that public involvement is not per se desirable but must be organized to complement needed expertise and enhance democratic accountability. I argue that the effort to involve the public in Germany may have palliated some local opposition to the national policy but did not enhance democratic accountability. Section 3 concludes by placing this chapter in the context of my broader research agenda in comparative administrative law.

1.  WHAT IS ‘PUBLIC PARTICIPATION’? The study of public involvement has two dimensions. First, citizens can provide input into institutions that make public choices—referenda, the legislature, government ministries and agencies, the courts, and private or public/private entities carrying out public pol­icies. The second dimension concerns the nature of the decision. Here, I contrast broad policy choices—for example, statutes that set policy, executive rules with the force of law, and structural injunctions issuing from the judiciary—with individualized decisions that, for example, license a particular plant, approve a public infrastructure project, or impose costs on or provide benefits to individuals and firms. Table 15.1 below summarizes the loci for public involvement, but one should note the interrelationships. Some decisions are free standing choices, but others interact. For example, a civil society group may go to court to claim that it has been excluded from participation in a policymaking forum, such as executive rulemaking. When the executive makes rules, the text of statutes that delegate policymaking constrains the executive. Furthermore, the distinction between general policy and individual decisions is not always clear cut. A series of adjudications can add up to a general policy, especially in a legal system based on the common law where judicial precedent operates (Farhang 2010). Even in the absence of formal precedents, an agency’s established practices that persist over time produce a de facto policy framework. Most real-world cases include a technical component that cannot be evaluated without specialized knowledge. Yet, those with technical knowledge cannot be sure that their judgments accord with public values and preferences. Furthermore, even given a fairly clear mandate, experts may disagree on the best course of action based on their understanding of the facts and of the causal mechanisms. Hard scientists may disagree with social scientists, and lawyers may disagree with substantive experts. Issues that seemed settled

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Citizens and technocrats: public participation and legitimacy  253 Table 15.1  Loci for public involvement and type of decision Referenda

Legislature

Ministries and Courts Agencies

Private bodies or PPPs

Policy choices

Binding laws

Statutes

Rules with force of law

Private rules (may be enacted into law)

Individual decisions

Approval or disapproval of infrastructure projects

Approval and funding of particular projects

Adjudicatory decisions on particular projects or cases

Structural injunctions and review of other policy processes Adjudications resolving disputes over particular cases and review of executive adjudications

Adjudications to resolve, e.g., intra-industry disputes

at the legislative drafting stage may become controversial when analyzed ex post through a technocratic lens. Yet, often expertise can narrow the range of political choice and help focus the political debate. What factors determine whether technocracy will exacerbate or overcome policy controversies? Should experts seek to educate the public to accept the policies they favor, or should they inform the public and then take into account the views of citizens and organized groups before making a choice based on both expertise and public input? I will focus on the three central columns in Table 15.1, that is, tensions between public involvement and expertise in decisions taken by the legislature, by ministries and agencies and by the courts—in particular, their role in reviewing legislative and executive action. Two contrasting background models of democracy frame the debate. The first, which Germans call the legitimationskette or ‘chain of legitimacy’ (Böckenförde 1992, 291–326), is a model of democratic accountability in a parliamentary system that flows from the voters at election time to a party coalition charged with forming a government and proposing legislation. In practice, the executive generally drafts statutes that are then debated and passed by the Parliament. Statutes can delegate certain policy choices to the executive. In the German case, the Basic Law provides that statutes that delegate in that way must include the ‘content, purpose and scope of the authority.’1 (Article 80(2) of the Basic Law requires consent of the Bundesrat, or upper house, for a subset of such rules). French law permits similar delegations but also gives the government some independent decree authority. It provides a list of topics that must be determined by statute; executive degrees can regulate topics not on the list if no statute is in force (French 1958 Constitution arts 34, 37, 38). In both cases, however, public input enters through the ballot box, not in the legislature or the executive. Public accountability flows in a chain. Under this view, it would be undemocratic and would risk special interest influence to introduce direct public involvement into executive rulemaking or even into statutory drafting. Thus, outside input should be limited for both statutory drafting and rulemaking to avoid   Basic Law for the Federal Republic of Germany, art. 80(1).

1

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254  Comparative administrative law biased and emotional responses. ‘Lobbying,’ borrowed from English in both German and French, is a pejorative term that signals illicit influence. The role of outside groups in providing information is downplayed. Of course, in reality no system actually avoids input from outsiders, and if such input is seen as illegitimate, it may simply go underground and behind closed doors (Heilbrunn 2005). But the background ideal remains one of legal rules drafted by competent legal and technical experts. The second model, reflected in United States practice, argues that public input should occur at all stages of the policymaking process. Elections provide a basic democratic check on legislative behavior; but a check that is more attenuated for administrative actions, even with a separately elected President. The weakness of voters’ influence implies that both legislative and executive procedures must guard against undue special interest influence while enhancing the value of public input. The lack of a clear electoral connection implies that legal constraints on executive rulemaking ought to further democratic accountability through broad consultation, transparency, and reasongiving that help to make government rulemaking processes accountable to the public. Similar legal constraints do not apply to the legislative process, even if, as a practical matter, much consultation does occur and if one can make a normative argument for more legally mandated public input. Rather, as I have argued in a previous book, the separation of powers in the US presidential system and Congress’s constitutional power to make its own rules limit the legal constraints on the legislative process (Rose-Ackerman et al. 2015; with my co-authors we also consider the cases of South Africa, Germany, and the EU). In contrast, neither model is explicit about the degree of public involvement for adjudications or individual choices involving large projects. Even in legal systems, such as the German case, where public participation in executive rulemaking is not legally required and usually does not occur, individual projects or licensing decisions often include public involvement. In the environmental area a treaty ratified by the EU and most member states requires such processes.2 This distinction between general policy and individual decisions is central to my assessment of what public participation can and cannot accomplish. Local projects are immediately salient to ordinary citizens living, for example, near a power plant applying for a license, a railroad station about to be rebuilt, or a plan to route a high tension power line over a picturesque village. In the absence of any institutionalized route for participation, the result can be street protests and other forms of direct expressions of unhappiness. Governments responding to such outpourings of public sentiment are likely to focus on individual infrastructure projects or licensing decisions, ignoring public involvement in broad-based policy choices of less salience. Thus, in Europe there is considerable public participation at the level of individual decisions compared with the relative lack of such processes in rulemaking (the production of secondary legislation). Although this difference may be explicable as a matter of positive political theory, I argue that parliamentary democracies cannot justify this asymmetry by reference either to the 2   See, 2011/92/EU on the assessment of the effects of certain public and private projects on the environment, http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri5CELEX:32011L0092 &qid51473016805652&from5DE, accessed 26 October 2016. The German law is the Gesetz über die Umweltverträglichkeitsprüfung (UVPG) v. 24.02.2010, BGBl I. p. 149. The EU directive requires public notice, hearings, reasongiving, and access to court review. It incorporates the provisions of the Aarhus Convention into EU law and requires their incorporation into national law.

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Citizens and technocrats: public participation and legitimacy  255 strength of the democratic link for secondary legislation or to the technical quality of expert policy input. If the legislature leaves important value questions for resolution by administrative policymaking, the state cannot solely trade on the democratic credentials of the legislature to legitimate its authority. However, even if one accepts my argument for the democratic legitimacy of public participation in rulemaking, how should such procedures be organized? Clearly, not everyone can be consulted, and even those willing to provide input may not be knowledgeable about the issues. The ultimate policy decision ought to remain one for officials with direct polit­ ical accountability to the cabinet and ultimately to the voters in both presidential and parliamentary systems. Thus, in that sense I follow the conventional argument that opposes regulatory negotiation between designated ‘stakeholders’ to produce binding decisions, except for a narrow range of choices (Rose-Ackerman 1994). Nevertheless, important questions remain about how to integrate the concerns of citizens, businesses, and other interest groups with the political and technical demands of public programs. Let’s start with the critics. Some democratic theorists justify delegation to ministries and agencies, and even to private self-regulating bodies, because of the lack of expertise of both legislators and citizens (Böckenförde 1992, 291–326; Weber 1946 [1919]). Under this view, statutes should incorporate broad principles and standards that express public values; then, the law should delegate implementation to the executive. Those with expert­ ise, both technical and administrative, should carry out public programs, and if the government lacks needed expertise, it should consult outside experts so that decisionmakers can access the most up-to-date science and technical expertise. To these critics, involving either the general public or ‘stakeholders’ in post-enactment policymaking would be undemocratic because participation is likely to be concentrated among those with intense personal or economic interests in the outcome. The policy choice would tilt toward those with the most resources or the loudest voices. Even if a public agency manages the process that makes the ultimate decision, these critics worry about the undue influence of a few members of the public who do not represent majority opinion. The ideal for such critics is a statute that resolves all the vexed policy issues, leaving it to ministries and agencies to carry out these policies as a technical exercise that relies on competence, not political ­legitimacy. They struggle with the reality of statutes that do not resolve many key policy issues, leaving it to ministries and agencies to issue rules to guide subsequent enforcement. An archetypal example that illustrates the criticisms of public input is a report on a 2010 workshop at the University of Maastricht in the Netherlands. It is revealing in the frankness of remarks from public officials who expressed considerable skepticism about public participation once a law has been passed (Kaliarnta et al. 2014). One organizer of public participation processes dealing with food safety stated: If someone expects that . . . [stakeholder] participation should be part of my daily work, then I’ll say: ‘Wait a moment’. It might not be necessary each time, because people only want to hear from us that the food is safe (ibid. 240).

A civil servant agreed that ‘80 to 90 per cent of our daily work can be done without participation. In my work, most of the time we do our job without any participation process’ (ibid. 24–41). Another participant justified this behavior by stating that if the stakeholders trust the risk-based approach used by the civil servants, then there is no need to involve

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256  Comparative administrative law them (ibid. 241). Furthermore, even if public officials wish to go beyond organized groups, they may have difficulty reaching the general public. Citizens may be uninterested, or regulatory bodies may have difficulty finding the right channels. Furthermore, the public may be poorly informed, leading some participants in the workshop to distinguish between ‘qualified’ and ‘unqualified’ stakeholders and to argue that time constraints often make it impossible to educate the public. In the same workshop science was held up as a source of ‘correct information’ (ibid. 243). Even when cultures differ, science provides a ‘baseline for some kind of common agreement’ (ibid.). However, the participants recognized that science itself is uncertain. In spite of their general support for technocratic choices, they recognized that it could not answer all policy issues clearly. Unfortunately, in looking to science to help make policy, politicians demand more certainty than science can produce. One participant pointed to ‘uncertain risks’ noting that ‘whether there is a real risk or whether there is enough safety cannot be answered by science’ (ibid. 244). For those who distinguish between risk and uncertainty, a risk can be measured, in the sense that one can assign clear probabilities to various events (e.g., flipping a fair coin), but uncertainty arises if one can only guess at the probabilities. Most risks in the real world are, at least, somewhat uncertain in that sense. Just because one cannot calculate certain probabilities does not imply that the risk is not ‘real.’ The basic point is that, even if providing a baseline, science cannot eliminate political or policy choices based on factors outside science. Politicians cannot escape responsibility for public choices by relying only on expertise. In such cases one of the participants argued for ‘some kind of stakeholder participation to at least get to a common definition of what the problems are’ (ibid. 245). How one should proceed from definition to policymaking is left unclear, although participants mentioned, optimistically, how participation can build up trust in science and in regulators (ibid. 245–6). One fundamental tension is between scientific efforts to measure risk and estimates affected by emotional reactions, viewed as characteristic of the general public—even when people have been educated about risk measurements. The authors would distinguish between emotional reactions that are ‘founded’ or ‘unfounded’ with the former being brought into the policy discussion through public involvement (ibid. 250–1). However, making such a distinction does not seem easy to do and cannot itself be grounded only in the scientific evidence. The critics of required public participation make arguments based on a particular view of democratic accountability and on the tension between competent application of expertise to the law and their views of the ‘general public.’ Some see the problem as purely technical: it would be desirable, in principle, to include ‘the public’ but it is not feasible because of the government’s time constraints and the lack of interest and knowledge in the electorate. Others make the more challenging claim that it both would be undemocratic to enhance participation and would limit the salutatory effect of science on policy. However, the latter claim needs to confront the limitations of the legislative process in translating public views into credible legislative language. There may be only a weak link between a person’s vote for a party or an individual candidate and support for particular statutory language. The democratic chain that extends back to the voters is not strong or well-articulated. Furthermore, because statutes are often compromises between different points of view, they may be vague or inconsistent on purpose. Given these features of statutes, the government cannot implement many of them without the promulgation of

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Citizens and technocrats: public participation and legitimacy  257 general rules to give them specific content. Technical expertise enters at that point but does not eliminate the need for policy judgments, informed by the views of those directly affected and by citizens with principled views of good policy. To balance these concerns, the cabinet or independent agencies ought to promulgate the rule after considering both technical arguments and the views of a broad spectrum of stakeholders and advocates for one or another view of the best policy. Given that any process takes time, energy and skill, how should government ministries put ideals into practice? If the call for public input is open-ended, as it is under the notice-and-comment provisions of the US Administrative Procedure Act,3 how does the government handle the possible influx of thousands of submissions? Are public hearings required and should they be held throughout the country? How much preparatory work should occur, involving preliminary input from organized stakeholders and technical experts? What kind of time limit should apply and should comments be publicly posted so others can respond? Is a second round of comments required if the agency revises its proposed rule in response to comments? These are difficult issues of practical public involvement, but the need to compromise is a reason to find a feasible solution, not to give up the enterprise. In the Dutch workshop one speaker stated that in order to ‘count’ as the general public, those participants would have to be unorganized—as soon as people become organized, they are not part of the general public under that view (Kaliarnta et al 2014, 242). As a matter of practical public policymaking, this is an absurd conclusion. It draws on Rousseau’s ideal where each individual expresses his or her informed but unmediated ‘will’ to generate the ‘general will,’ but that ideal is very far from reality.4 If one rules out the participation of organizations, collective action problems tempt everyone to freeride in the making of policy. If people band together out of a moral commitment to promote certain policies or organize to support private benefits and public values, these groups are a way to generate public input, not a factor to be criticized. Of course, the biases feared by Rousseau are always a concern, but the task of responsible officials is to take them into account in making policy. In fact, even Rousseau at the end of the quotation in the note seems to have recognized that the state cannot prevent organizations from forming; rather, it should encourage large numbers of them to organize and to mitigate inequalities of resources and power. In practice, the problem for the design of participatory processes

  5 U.S.C. §553(c).   Rousseau in the Social Contract writes:

3 4

If, when an adequately informed people deliberates, the Citizens had no communication among themselves, the general will would always result from the large number of small differences, and the deliberation would always be good. But when factions arise, small associations at the expense of the large association, the will of each one of these associations becomes general in relation to its members and particular in relation to the State; there can then no longer be said to be as many voters as there are men, but only as many associations. The differences become less numerous and yield a less general result. . ..It is important, then, that in order to have the general will expressed well, there be no partial society in the State, and every Citizen state only his own opinion. . ..That if there are partial societies, their number must be multiplied, and inequality among them prevented . . ..These are the only precautions that will ensure that the general will is always enlightened, and that the people make no mistakes (Rousseau 1997 [1762], 60). I am grateful to Blake Emerson for this reference.

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258  Comparative administrative law is not too much organization but too much freeriding, putting the entire burden on public officials charged with issuing the rule. Alternatively, suppose that the regulator keeps a tight control on the process and selects which stakeholders may participate and how their views are presented. Then the import­ ant issues are the criteria for inclusion and what is expected of those in the select group. Is the advice they give public or given behind closed doors? Such input risks being limited to those with connections to the executive agency or with sufficient organized political clout to demand inclusion and, perhaps, to exclude contrary voices. In either case, is there ex post review of the process and/or of the substantive rule by the courts, by the legislature, or by any other body? If review uncovers illegalities or other problems, is the result a remand to the agency or does the reviewing body fix the problem itself ? Central to any type of participation is the nature of the information provided. Do participants contribute factual material that can supplement expert input? Do they express concern, anger, or support by claiming to represent a segment of the public? Does real dialogue occur that involves give and take with other stakeholders, or might a focus group or a well-executed survey be a good substitute? A considerable literature exists on alternative forms of public input, but some of it concentrates too much for my purposes on local decisions about particular projects that will have concrete effects on, at least, some of the population. Nevertheless, some of these experiments may suggest ways to generalize the results to higher levels of government. They suggest two types of participation in policymaking. The first type responds to the infeasibility of involving the mass public. Rather, it selects a manageable group of citizens, provides them with information, allows them to deliberate, and then either treats their policy views as input into the agency’s decision or allows the group to make binding decisions. The citizens may be chosen through a stratified random sampling process to obtain a group that roughly reflects the major demographic categories in the polity, or anyone may be able to volunteer, with a lottery or other method used to select participants. Alternatively, the public agency may either choose the participants or choose a list of groups, each of which can choose the individuals to participate. Members of the participatory body may consist only of ordinary citizens or may also include representatives of business, labor, academia, etc. as well as public officials.5 A second type of participation, analogous to US notice-and-comment rulemaking, does not involve public deliberation but rather requires the government agency to inform the public about its plans, to hold hearings where anyone can submit a statement and consult the docket, and to provide public reasons for its final policy choice that take account of the comments received. This model does not require the agency to filter who may participate. Rather the agency must weigh the probity of the comments before it issues a final rule. It need not respond to all comments but only to those of ‘cogent ­materiality’ to the technical and policy issues implicated by the rulemaking.6 Thus, the first model must avoid an overly exclusive, narrow range of consultation.

5   For a particular version of this model see the deliberative polls that James S. Fishkin has carried out in many locations throughout the world (Fishkin 2009). 6   U.S. v. Nova Scotia Food Prods. Corp., 568 F. 2d 240, 252 (2d Cir. 1977).

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Citizens and technocrats: public participation and legitimacy  259 The second must confront the diffuse nature of participation which may not assure a good balance of opinion. It is up to the public officials to assess the public input and to balance those comments with other information about the benefits and costs of a rule. Structuring public participation, under either model, as a constructive aspect of executive branch policymaking is a key aspect of democratic accountability, but it is often conflated with fights over the allocation of benefits and costs that have a zero-sum character—­ controversies difficult to resolve through reasoned give and take. Debates over the role of the public therefore need to consider at what stage in the process participation occurs. When participation occurs, are policy options still open or have most routes been closed, so that the decision is essentially a zero-sum game about dividing up benefits and costs or making marginal tweaks? A key point in evaluating past participatory efforts is the extent to which the processes feed into a policy decision that balances overall social benefits against their distribution across the population. Policy choices can include those that correct market failures, improve the fairness of the distribution of income and social goods, or explore the content and extent of rights. Debates should encourage participants to rely on principled expressions of values (promotion of efficient markets, a fair distribution of benefits and costs, articulation of rights), not on their own individual gains and losses. Of course, such impartiality will not be easy to produce, but if the goal is to structure a general policy, that aspiration is, at least, a central goal (Dewey 1954 [1927]). Participation in broad-based policy choices is not equivalent to debates that occur after the overall shape of a policy has been set. In that case, most of the remaining decisions are likely to be divide-the-pie choices, where the size (and kind) of pie is fixed and the only issue is distributing benefits and costs across named individuals, business firms, or locations. The government needs to make a choice based on the competing interests, and must allocate gains and losses given the prior policy choice. Dialogue provides few benefits in such cases. Alternatively, there may be no value in public dialogue if those with an interest in the outcome are sharply divided on ideological grounds. Perhaps the losing side will become reconciled to the outcome if its supporters have a chance to vet their opinions, but this seems by no means obvious. For example, a participatory process dealing with abortion laws is unlikely to be productive if it seeks consensus in the US political climate. The disagreements concern fundamental and deeply held beliefs, not open questions about what policy is best, all things considered. In the future I plan to study the alternatives and assess the evidence on their effect­ iveness for different kinds of public decisions, from general rules that set policy to individual decisions about infrastructure or licensing. To make the basic contrast between policymaking and dividing-the-pie more concrete, I conclude this chapter with an introduction to the German shift toward renewable electric power and away from nuclear power. It is, for me, an example of the confusion in the public participation debate between policymaking, through some kind of public participation and dialogue, and the resolution of local ‘not-in-my-back-yard’ (NIMBY) conflicts where there are clear winners and losers.

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260  Comparative administrative law

2. THE GERMAN ENERGIEWENDE: NUCLEAR POWER PHASE-OUT AND THE SHIFT TO RENEWABLES7 The extended debate in Germany over nuclear power and renewable energy illustrates the interplay between public opinion, politics, and technical expertise. In 2011 the German legislature voted overwhelmingly to phase out nuclear power over a period of years and to speed up the development of renewable sources.8 This vote followed decades of controversy over nuclear power that began in the midst of the cold war, long before global warming became an issue.9 The interest in non-nuclear renewable energy as a substitute for electricity generated by coal, oil, gas, and nuclear pre-dated the Fukushima disaster in Japan, but that disaster focused the attention of the public and counteracted industry claims for nuclear power as an effective answer to problems of global warming. German energy policy has taken a strong turn toward renewables—called the Energiewende to bring to mind the so-called Wende (rapid change) that accompanied the reunification of Germany after 1989. Public opinion strongly supported the phase-out and, hence, political parties from the Greens through the Social Democrats to the Christian Democrats supported it in the Bundestag. The only significant opposition came from the far-left Linke party that opposed the bill for not being speedy enough.10 The amendment to the Atomic Energy Act was passed in the midst of what was already a commitment to develop renewable sources of energy and to downplay nuclear power. At the same time, the coalition extended the commitment to renewables and supported expansion of the electrical grid to transport this power. The law set a goal of generating at least 35 percent of electricity from renewables by 2020, with continuous increases to 80 percent by 2050.11 By 2015 the actual share of renewables in the total was 32.6 percent although it is important to note that lignite (soft coal) still accounted for 24 percent of the total.12 However, implementing the shift to renewables has created practical problems of

  This section draws on material in Groebel (2013); Durner (2014a, 2014b).   The legislation, the Netzausbausbeschleunigungsgesetz Übertragungsnetz (NABEG), v. 28.07.2011 (BGBl. I p. 1690), and amendments to the Energiewirtschaftsgesetz (EnWG), v. 7..7.2005, BGBl. I pp. 1970, 3621, §§ 12a ff., and Erneuerbare-Energien-Gesetz (EEG), v. 21.7.2014, BGBl. I p. 1066, aimed to speed up grid expansion and thus enable the phase-out of nuclear power. The amended Atomic Energy Act changed the deadlines for plant closures to 2022. In addition, legislative provisions seek to increase the efficiency of energy use and conservation. The EEG was amended in 2014: http://www.bmwi.de/DE/Service/gesetze,did521940.html, accessed 9 September 2016.  9   For background on German environmental policymaking before 1995 see Rose-Ackerman (1995). 10   The atomic power phase-out passed the Bundestag with a vote of 513 to 79. The changes in the laws dealing with renewables and grid expansion were only approved by the governing coalition. See Lang and Lang 2011. 11   The goal refers to electric power only (about 20 percent of total energy use) not to heating or to transportation. Craig Morris, ‘Germany Nearly Reached 100 percent Renewable Power on Sunday,’ Energy Transition: The Germany Energiewende, http://energytransition.de/2016/05/ germany-nearly-reached-100-percent-renewable-power-on-sunday/, accessed 7 June 2016. 12   Federal Ministry for Economic Affairs and Energy, http://www.bmwi.de/EN/Topics/Energy/ Renewable-Energy/renewable-energy-at-a-glance.html, accessed 7 June 2016. German policy is  7  8

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Citizens and technocrats: public participation and legitimacy  261 storage and the transport of large amounts of power from the north of Germany, where wind is prevalent in the North and Baltic Seas, to the west and south where the industrial needs are concentrated. The German law requires power grid operators to accept electric power from renewable sources with subsidies given to them to help cover the cost. This stimulated the production of renewable sources of power but put a strain on the grid.13 Statutory law then set out a multi-stage process to upgrade the grid. It began by determining the termini of power lines based on plans submitted by the grid operators and consultation with other stakeholders. The Bundestag enacted these plans into law. The next step, still in progress, is determining the routes in detail, and here is where public opposition arose. Residents complained about power lines going over their towns and villages, and those concerned with the natural landscape and biodiversity objected to the lines’ passage over nature protection areas. Renewable sources of electricity have priority access to the grid, and in the absence of new gridlines, if wind power is not disconnected from the grid during very windy days, it is diverted outside of Germany to Poland and Austria in ways that lead those countries’ electric power plant operators to complain. Power plants using conventional fuel may need to shut down so the local grid can absorb the excess power. Substantially more wind power is due on line in the coming years, ­exacerbating the problem. Furthermore, the chief minister of Bavaria, faced with opposition to electric power pylons, has questioned the state’s need for northern power. He claims that the state can produce renewables from biogas and purchase or produce non-renewable power.14 Of course, those supporting the federal policy, now including not only those concerned with climate change but also the major firms in the industry, argue that the basic choice to build new grid lines has already been made so that only the routes remain in question. The commitment to the new grids is embodied in a statute that sets the basic parameters of the grids, leaving the details to subsequent negotiations.15 However, as a matter of practical politics the objections from Bavaria and the complaints of property owners and nature protection groups are deeply intertwined and are influencing the policy debates. In 2015 designed to mesh with the EU 20-20-20 goals which seek 20 percent renewable energy by 2020 (http://ec.europa.eu/clima/policies/strategies/2020/index_en.htm, accessed 9 September 2016). 13   On Sunday, May 8, 2016 the wind was so powerful that for a few hours renewables provided about 90 percent of German electricity. Morris, supra, note 11. The German Renewable Energy Act (EEG) was amended in July 2016 to control the supply of renewables; it replaces the fixed subsidy paid to all renewable generators with auctions of the right to produce such power up to the volume set by the state. Small providers remain with the old system. See, ‘Renewable Energy: It’s Not Easy Being Green,’ The Economist, 13 August 2016, and Kerstine Appunn, ‘Switching to Auctions for Renewables,’ Clean Energy Wire, July 8, 2016 at: https://www.cleanenergywire.org/factsheets/eegreform-2016-switching-auctions-renewables, accessed September 9, 2016. 14   Stefan Wagstyl, ‘Bavaria Opposes Green Energy Power Lines Despite Nuclear Closure’, Financial  Times, February 8, 2014. On February 27, 2015, the Bundesnetzagentur produced a report reaffirming the importance of building new long-distance transmission lines from the north to the south. http://www.bundesnetzagentur.de/cln_1432/SharedDocs/Pressemitteilungen/ DE/2015/150227_NEP.html, accessed 9 September 2016. See Kerstine Appum, ‘German Grid Agency Stresses Need for New Power Lines,’ Clean Energy Wire, 27 February 2015, at: http://www.cleanenergywire.org/news/german-grid-agency-stresses-need-new-power-lines, accessed 9 September 2016. 15   Bundesbedarfsplangesetz, v. 23.7.2013, BGBl. I S. 2543; 2014 I S. 148, 271. See Lang and Lang 2013.

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262  Comparative administrative law the Federal Cabinet proposed the expensive option of burying lines near inhabited areas. It remains to be seen if this option will solve the political problem of trading off local concerns against national policy (Lang and Lang 2015). Germany has made a political choice to favor renewables and to do away with nuclear power, even though its actions, taken by themselves, will have little impact on the global climate. Nor will they address the more immediate dangers of nuclear power in Europe, given that France remains heavily dependent on nuclear power with many plants close to the German border. However, what looked at first like an almost unanimous, if costly, compromise may be coming unstuck as implementation proceeds. Overall public support for renewables is very high,16 but very local and immediate concerns are delaying efforts to implement the broad policy. If the government responds with costly fixes, the falling cost of producing renewable electric power will be canceled out by the increased cost of its transportation, with a substantial share of the transmission lines buried underground. Supporters of building the power lines now argue that they are cost effective because they overcome public opposition and speed up construction (Walton 2016). Notice, however, that the ‘public opposition’ being overcome is only the opposition from the residents of the particular towns affected, not the broader German public that will bear most of the extra cost. Given the statutory framework, how do technical expertise and public attitudes ­interact? Would better technocratic assessments in the form of cost-benefit analyses and risk assessments have helped diffuse opposition and led to better policy responses to the potential harms from climate change and nuclear meltdown? In this case the answer is no, but the reasons are complex. Cost-benefit analysis is an exercise in applied utilitarianism that seeks to maximize the net benefits of a policy in a way that discounts future benefits and costs back to the present. Absent cardinal, inter-personal measures of utility, the analyst relies on money as a metric. The problem, of course, is that money does not straightforwardly translate into utility. On the margin, a dollar is more valuable to a poor person than to a rich one, everything else equal. Thus a rich person is likely to be willing to pay more in dollars than a poor one, everything else equal. Furthermore, no one really knows how to measure utility in units that can be compared across people. Dollars are a weak substitute. Furthermore, not all citizens subscribe to the utilitarian basis of cost/benefit analysis (Rose-Ackerman 2016). The shift to renewables represents a commitment to three principles that are quite distinct both from the utilitarian values behind cost-benefit analysis as well as from each other. The first principle is the belief that governments ought to respond to the threat of climate change that could have disastrous consequences for the planet. But does German policy respond in a practical way to the problem of global warming? Here, sadly, the answer is no. Even if Germany were to produce 100 percent of its power from renewables, the impact on the climate would be very small. Hence, the justification for the 16   Data from 2007 to 2015 show that almost 100 percent of those surveyed support ‘increasing use and expansion of renewable energy.’ In addition, large majorities claim not to object to renewable energy facilities near their residences (German Renewable Energies Agency, https://www.unendlichviel-energie.de/media/image/6091.Akzeptanzumfrage_2007_2015_Synopsis_Aug15_EN_web_72dpi. jpg, accessed 7 June 2016).

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Citizens and technocrats: public participation and legitimacy  263 Energiewende must rest on its demonstration effect, designed to stimulate other polities to follow suit—a justification which may have had some impact on the Paris climate talks in December 2015. The second principle is that nuclear power is simply too risky to use for power gener­ ation, where accidents may result from earthquakes or other catastrophic failures. Here, the major concern is the large, irreversible losses that might fall on groups of people at a particular but unknown time. Of course, a competent cost-benefit analysis ought to take that risk into account, but those who support the nuclear phase-out do not generally balance those losses against the benefits of inexpensive nuclear power, a source of electri­ city which does not affect the climate. They view such a tradeoff as an effort to devalue the harm suffered by the victims of an accident. The third principle is a wish for self-sufficiency in energy, especially the desire to avoid dependence on natural gas from Russia. Low-cost German coal is still currently in use, but that fuel contributes both to present air pollution and to greenhouse gases. The turn to renewables is seen by some as a route to greater self-sufficiency—flying in the face of EU efforts to integrate the electric power market in Europe. These arguments for the shift to renewables turn on political and ethical values that reject the notion of tradeoffs embedded in cost/benefit analysis. They operate on different principles. The current controversy in Germany is not, at least overtly, about broad principles related to overall energy policy. Instead, it concerns the details of exactly where the new grid lines will be built and whether they will be overhead lines or buried underground. Bavaria is trying to reopen the debate over the general policy, but the federal government hopes to avoid doing so. The general grid routes were embodied in statutes in an effort to keep subsequent controversies focused on the routes’ specifics, not broad policy. The problem on the surface is a classic example of NIMBY politics, supplemented by the concerns of nature protection groups to keep natural landscapes free of power lines. The decisions that must be made are divide-the-pie decisions. If the line does not cross my village, then it may need to cross yours or else interfere with a nature protection area. Political controversies swirl. An article in a German newspaper in 2015 claimed that a leading politician had promised that the grid line would be buried as it passed through a town in his home district, causing controversy.17 Rather than reject that costly option outright, the German cabinet proposed to extend the option, and a proposed December 2015 statute will bury some lines underground, especially near inhabited areas.18 It would certainly be useful to have cost estimates for different options that include the costs of burial or conversely, of compensating residents for losses, but the basic policy choice has already been made based on other principles. This case illustrates a fundamental problem at the interface between public input and technocratic knowledge. Policy is made at one government level—here, through statutes proposed by the prime minister and her cabinet and passed by the legislature. They are 17   ‘Gabriel lässt ein Stromkabel unterirdisch legen,’ Frankfurter Allegemeine Zeitung, February 4, 2015, p. 17. 18   Gesetz zur Änderung von Bestimmungen des Rechts des Energieleitungsbaus, 21 December 2015. http://www.bgbl.de/xaver/bgbl/start.xav?startbk5Bundesanzeiger_BGBl&start5//*[@attr_ id5%27bgbl115s2490.pdf%27]#__bgbl__%2F%2F*[%40attr_id%3D%27bgbl115s2490.pdf%27]__​ 1465316415583, accessed 7 June 2016.

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264  Comparative administrative law passed in response to a disaster in another country but feed into a longstanding polit­ical debate over nuclear power that dates back to the Cold War. Debates over nuclear power interact with current political agitation replacing renewable sources of energy. On the surface, a phase-out of nuclear power would increase German dependence on coal and natural gas, and that has, indeed, happened in the short run. The response is a larger commitment to renewables such as wind, solar, and biogas financed, in part, by public subsidy and accompanied, so far, by public support. Although both the phase-out of nuclear power and the shift to renewables were broadly popular with voters, there was no focused debate on the implications of the law. Intensive efforts to involve the public were only incorporated into statutes for downstream decisions on where to locate the power lines, wind farms, and solar collection fields. The statute dealing with high-tension power lines includes multiple decision nodes that require public input, but the emphasis is strictly on local issues dealing with the location, possible health risks, and the aesthetics of the particular route choices. Even if the response to local objections is to vastly increase the cost of the shift to renewals, the underlying policy will not change. Participation that occurs at the local level is about avoiding costs by shifting them to other localities or to the federal government. It is not about the tradeoffs behind the broad policy shift. German citizens may end up with an energy policy that edges up in cost over time through a series of individual decisions under which local citizens shift costs to others. Efforts to avoid imposing disproportionate costs on small groups of citizens is a valid policy goal consistent with democratic values, but such actions should be included in the national policy debate, along with their costs, either in the legislative process or afterwards as the government makes policy. These rulemaking processes should take into account, not just NIMBY concerns, but also overall public support for the costs of the switch. Public participation ought not to be only about zero-sum cost allocations but also about the substance of policy. In fact, if the issue really is a zero-sum divide-the-pie decision, there are inevitable winners and losers. Winners might be able to compensate the losers if the policy produces a surplus so everyone is better off, but if such transfers are not possible, gainers and losers are inevitable. Public input can clarify the extent of the gains and losses—always taking into account strategic incentives to overstate losses and under state gains. However, a zero-sum case cannot be resolved through a process that aims to clarify the issues and narrow areas of disagreement through dialogue and debate. The German case is an example of placing public participation at the wrong stage of the policymaking process—where the policy is set and people are fighting about the division of the gains and losses. However, politicians in Bavaria tried to reopen the general policy debate over the relative merit of renewables, nuclear power, and fossil fuels in the light of the controversy over power lines. Now, they are seeking federal funds to support a biogas power plant that would benefit the region’s farmers.19 However bothersome the Bavarian politicians may be, at least the issues they raise are ones that should have been open to public debate when the policy was designed. At present, there are no general 19   At the state level the Minister President of Bavaria, Horst Seehofer, is seeking a subsidy from the federal government for the construction of a biogas power plant that would use organic ma­terial from local farmers. Michael Bauchmüller, ‘Strom von Seehofer,’ Süddeutsche Zeitung, 2 June 2016, http://www.sueddeutsche.de/politik/energiewende-strom-von-seehofer-1.3016905, accessed 7 June 2016.

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Citizens and technocrats: public participation and legitimacy  265 policy discussions over renewables and the nuclear power phase-out. The only issues left to debate are downstream decisions about the location of power lines, the financing of renewable power generation, and additional subsidies.20 If those decisions had been part of the original policy debate, the NIMBY issues would remain, but they could have been considered as a part of the national policy choice based on broader policy issues. Expertise and the judgment of top government officials would play key roles, but public input and official statements of reasons would likely have improved the democratic ­legitimacy of the federal policy.

3. CONCLUSIONS Critique is all very well, but what, in fact, can be done to make public participation more effective? Proponents of true mass participation can do little more than organize street protests, submit on-line petitions, or administer surveys to gauge opinions. Involving a large share of the public in deliberating about policy is simply unrealistic. As many have noted, the basic problems are lack of knowledge and lack of motivation. Expertise may be both time consuming to obtain and difficult for non-experts to understand, even if they do have access to the relevant documents and websites. Furthermore, ordinary people are busy with their own lives and may not believe that their marginal contribution will matter—they face a collective action problem that motivates them to freeride on the actions of others. These conditions create support both for representative democracy and for delegation of technocratic decisions to the bureaucracy. However, the situation is not without hope. My own bias is against techniques that are too close to the corporatist model, where a group representing a fixed number of organized interests is permitted to meet around a table to discuss a policy topic, perhaps supported by staff. The risk, as I documented in some of the efforts in Hungary and Poland after the transition from socialism (Rose-Ackerman 2005), is that membership is frozen at a point in time and does not respond to changing interest-group patterns. Open-ended opportunities to express views, as under the US notice-and-comment process, avoid that problem, but may produce an overwhelming number of comments and/or comments only from a biased sample. Thus, the bureaucracy should have a system in place to review written comments and to hold hearings and have the capacity to make technically competent decisions that use public input without being required to accept it uncritically. Officials must, however, give public reasons for their choices and submit to limited court review. Thus, in a choice between deliberation by a few select members of the public and deliberation by public officials who must take public input into account, the latter seems to me to be closer to democratic values. I understand the critiques of the noticeand-­comment process in the US, and I plan both to take them seriously and to consider 20   Kropp (2015: 64) notes that in Germany NIMBY concerns aggravated the problem of dealing with the negative effects of renewable power generation. One response has been to call for earlier public involvement in future decisions. She quotes Eckhart Hien, a former president of the German Federal Administrative Court, who asks ‘Mehr Bürgerbeteilung, Weniger Demokratie?’ (‘More Citizen Participation—Less Democracy?’), Frankfurter Allgemeine Zeitung, 24 Jan. 2014, p. 7.

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266  Comparative administrative law reforms in future work. However, the basic principles that inform my work are, first, the acceptance of comments from anyone, not just from experts or selected ‘stakeholders,’ and, second, government decisionmakers who must justify their decisions with reasons that are limited neither to expert determinations nor compilations of survey and focus group results. Only a robust participatory process can ensure that public power is responsive to the persons in whose name it is exercised. But such a process needs both to reflect competent expertise and to accept an obligation to represent the voting public, not just those who choose to participate.

ACKNOWLEDGMENTS I am grateful to Blake Emerson for very insightful comments on an earlier draft of this chapter and to Sebastian Reiter for help with some details of German and EU law.

REFERENCES Böckenförde, Ernst-Wolfgang (1992), Staat, Verfassung, Demokratie, Frankfurt-am-Main: Suhrkamp. Dewey, John (1927 [1954]), The Public and Its Problems, Athens GA: Swallow Press of Ohio University Press. Durner, W. (2014a), ‘Renewable Energy and Related Fields of Politics as Features and Challenges of Regional Transformation Processes,’ presented at Symposium: Socio-Economic Transformation Processes in a European Cross-Border Region, Mondorf-les-Bains, Luxembourg, February, http://meteo.uni-trier.de/TriCSS/conf.php (accessed September 9, 2016). Durner, W. (2014b), ‘Öffentlichkeitsbeteilgung und Demokratische Legitimation im Energie-Infrastrukturrecht,’ in Kolloquium anlässlich der Verabschiedung von Prof. Erbguth, Rostock, September. Farhang, Sean (2010), The Litigation State: Public Regulation and Private Litigation in the United States, Princeton NJ: Princeton University Press. Fishkin, James S. (2009), When the People Speak: Deliberative Democracy and Public Consultation, Oxford: Oxford University Press. Groebel, A. (2013), ‘“Energiewende”—The German Energy Transformation to Renewables and the Role of the Regulator: the Success Story of a Strong Independent Regulator,’ presentation at an international conference in Tokyo, Japan, February 26, 2013, http://www.renewable-ei.org/en/images/pdf/20130226/26Feb_ REvision2013_s3_Groebel_BNetzA.pdf, accessed 9 September 2016. Heilbrunn, J.R. (2005), ‘Oil and Water? Elite Politicians and Corruption in France,’ Comparative Politics 37, 277–96. Kaliarnta, S, M. Hage, and S. Roeser (2014), ‘Involving Stakeholders in Risk Governance: The Importance of Expertise, Trust, and Moral Emotions,’ in Marjolein B. A. van Asselt, Michelle Everson, and Ellen Vos (eds), Trade, Health and the Environment: The European Union Put to the Test, London and New York, Routledge, pp. 235–53. Kropp, S. (2015), “Federalism, People’s Legislation, and Associative Democracy,” in C. Frankel-Haeberle, S. Kropp, F. Palermo, and K.-P. Sommermann, eds, Citizen Participation and Multi-Level Governance, Leiden: Brill Nijkoff, pp. 48–66. Lang, M. and A. Lang (2011), ‘Clear Bundestag Majority for 2022 Phase-Out and Coalition Party Approval for Energy Package,’ German Energy Blog, July 1, http://www.germanenergyblog.de/?p56677, accessed 9 September 2016. Lang, M. and A. Lang (2013), ‘Parliament Adopts Federal Requirements Plan for Electrical Transmission Network,’ German Energy Blog, 30 April, http://www.germanenergyblog.de/?p512991, accessed 9 September 2016. Lang, M. and A. Lang (2015), ‘Federal Cabinet Approves More Underground Cable’, German Energy Blog, October, http://www.germanenergyblog.de/?p519468, accessed 9 September 2016. Rose-Ackerman, S. (1994) ‘Consensus versus Incentives: A Skeptical Look at Regulatory Negotiation,’ Duke Law Journal 43, 1206–20. Rose-Ackerman, S. (1995), Controlling Environmental Policy: The Limits of Public Law in Germany and the United States, New Haven: Yale University Press.

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Citizens and technocrats: public participation and legitimacy  267 Rose-Ackerman, S. (2005), From Elections to Democracy: Building Accountable Government in Hungary and Poland, Cambridge UK: Cambridge University Press. Rose-Ackerman, S. (2016), ‘The Limits of Cost/Benefit Analysis When Disasters Loom,’ Global Policy 7(Supp. 1), 56–66. Rose-Ackerman, Susan, Stephanie Egidy, and James Fowkes (2015), Due Process of Lawmaking: The United States, South Africa, Germany and the European Union. Cambridge UK: Cambridge University Press. Rothstein, Bo (2011), The Quality of Government: Corruption, Social Trust, and Inequality in International Perspective, Chicago: University of Chicago Press. Rousseau, Jean-Jacques (1997 [1762]), The Social Contract and Other Later Political Writings, Victor Gourevitch (ed) (trans), Cambridge, UK: Cambridge University Press. Walton, D. (2016), ‘Analysis of the Recent German Underground Cabling Legislation,’ Leonardo Energy, June 20, http://www.leonardo-energy.org/blog/analysis-recent-german-underground-cabling-legislation, accessed 9 September 2016. Weber, Max (1946 [1919]). ‘Politics as a Vocation,’ in H.H. Girth and C. Wright Mills (eds) (trans), Max Weber: Essays in Sociology, New York: Oxford University Press, pp. 77–128.

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16.  The rise of reason giving in American administrative law Jerry Mashaw

For 21st century citizens of modern liberal democratic states, the association of reason and reason giving with administrative governance may seem relatively non-problematic. Administrative governance is part and parcel of the rise of modernity, the substitution of reason for myth, custom and heredity; the march from charismatic to bureaucratic authority. And respect for the rights of free and equal citizens would be difficult to square with rule by administrative fiat. But the making of the modern world and modern nation states has hardly been a linear historical development. Max Weber’s (1968 [1922]) early 19th century pronouncement that the promise of bureaucratic authority was to exercise power on the basis of knowledge was, when made, as much a prediction as a statement of the social fact of the matter. The rise of reason and reason giving as a requirement for the legality of administrative action in the U.S. has a similarly complicated history.

1. REASONABLENESS AND REASON GIVING IN 19th CENTURY AMERICA Administrative law was not talked about as a separate field of law in the U.S. until very late in the late 19th or early in the 20th centuries. But, this hardly meant that there were no administrative offices or agencies, or that administrators did not make thousands of decisions with legal effect (Mashaw 2012). Many of these functions were carried on within the context of published substantive and procedural rules. Official decisions were often subject to appeal within the administration to appeals boards or supervisory personnel. The decisions of those boards had precedential force and supplemented the explanatory material contained in agency manuals, opinion letters and guidelines (Mashaw 2012, 251–84). In short, reasons were often given for decisions, and policies were explained to those whom they affected. Then as now, this explanation of why given policies were adopted greatly facilitated the public’s voluntary compliance and acceptance of administrative action. But, virtually none of this reason giving was required by statute or by the common law of judicial review. As characterized by Bruce Wyman’s path-breaking treatise on American administrative law, these rules, precedent decisions and explanatory guidelines were a part of the ‘internal law’ of administration (Wyman 1903). By contrast, Wyman’s ‘external law’ was essentially the common law as it applied to the actions of administrative officers. That common law was of essentially two types: damage actions against an officer based on some standard form of common law action (trespass, trover, assumpsit, or the like), or an action premised on a prerogative writ, basically mandamus or injunction. The reasonableness of an administrator’s actions played no role in 268 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 268

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The rise of reason giving in American administrative law  269 either form of action. In short, in this ‘bipolar model’ of a judicial review, review was all or nothing (Mashaw 2012, 301–8). Either the court decided all the questions for itself, giving no deference to reasonable administrative action, or it declined to review because the administrative action was discretionary. Suits for mandamus or injunction provide the simplest cases. These were suits to compel or prohibit official action. The federal courts’ position on when these writs would lie was straightforward: if the officer had jurisdiction to act and acted within that jurisdiction, the court would not inquire into the grounds for or reasonableness of the officer’s acts. Indeed, in the iconic case of Marbury v. Madison, Chief Justice Marshall described the proposition that a suit in mandamus could be brought to control the discretion of an officer as ‘[a]n extravagance, so absurd and excessive. . .[that it] could not have been entertained for a moment.’1 On the other hand, if the officer’s duty was non-discretionary—a purely ministerial act such as the delivery of the certificates of appointment at issue in Marbury v. Madison—the officer’s failure to act as mandated was not excused because the officer had good reasons for his failure. In mandamus actions, the question before the court was a question of jurisdiction or authority, not reasonableness.2 The same was true in actions for injunction. In Gaines v. Thompson, the Supreme Court described its mandamus jurisprudence as part of a ‘general doctrine.’3 According to the Court, that general doctrine meant that ‘an officer to whom public duties are confided by law, is not subject to the control of the courts in the exercise of the judgment and discretion which the law reposes in him as a part of his official functions.’4 This general principle was based on an even more general idea—separation of powers. Federal courts of the 19th century took very seriously the position, often associated with French administrative jurisprudence, that to judge administration is to engage in administration. Indeed, it was not until late in the 19th century that the Supreme Court admitted that Congress could by statute provide federal courts with appellate jurisdiction over administrative action (Merrill 2011a). Damage actions against officers excluded reasonableness considerations for a quite different reason: reasonableness was not a defense in most common law suits for damages. When a customs officer seized a ship or its cargo for smuggling, or for otherwise attempting to evade customs duty, the owner could test the legality of the officer’s action by an action in trespass. Trespass was, of course, an intentional tort. The only question was whether the officer had wrongfully seized the property. If the officer had made an error of either law or fact the seizure was wrongful. The purity of the officer’s motives and the reasonableness of his beliefs were simply beside the point. To be sure, the officer’s defense that he was acting in his official capacity and according to the law put the legality of the officer’s acts at issue. But legality was judged by correctness, not reasonableness.5 In a few cases, Congress recognized that officials bore unreasonable risks of damages liability and provided a reasonableness defense.6 But such statutory provisions were rare.     3   4   5   6   1 2

5 U.S. (1 Cranch) 137, 170 (1803). See id. at 171. 74 U.S. (7 Wall.) 347, 352 (1868). Id. Little v. Barreme, 6 U.S. (2 Cranch) 170 (1804). See, for example, An Act to Regulate the Collection of the Duties Opposed by Law Upon the

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270  Comparative administrative law Although many of the early cases involved customs collection or the enforcement of trade restrictions, a similar approach was taken to property claims concerning public lands. By 1803 the U.S. held property larger than the territory of the original thirteen states that had been created by state cessions of western lands and the Louisiana Purchase. But, settlors had not waited for the United States to survey its public lands and put them up for sale before moving West. These early westerners held titles from the former American colonies, and from British, French, and Spanish grants. Selling the public lands required determining what parts of these territories were in fact ‘public.’ Because federal territor­ ial courts were not up to the task, there was only one for each territory, administrative commissions were set up to determine the validity of tens of thousands of putative title holder’s land claims (Mashaw 2012, 119–46). Judicial review with respect to land claims was both substantively and procedurally different from review of federal functions such as tax collection or embargo enforcement. A claim that a land commission had made an erroneous decision with respect to a land title did not sound in tort. Damages were unavailable. Mandamus was similarly unavailing. Not only were these adjudicatory decisions ‘discretionary’ in the mandamus sense of that word, the land commissioners did not hold title to the property in dispute. They could not be ordered to convey it to a claimant contending to be its rightful owner. Issues concerning whether a land patent was valid tended, therefore, to arise collaterally in actions for ejectment between private parties. In the early 19th century, these collateral attacks on land commission decisions were nevertheless resolved in a fashion reminiscent of mandamus actions. If the land commission was determined to have had jurisdiction over the parcel involved, the courts treated the commission determination as res judicata (Woolhandler 1991, 216–21). If jurisdiction were lacking, the commission’s actions were invalid, and the court then tried the action as an original proceeding in equity. Over time the judiciary began to broaden review by expanding the idea of ‘jurisdictional error’ (Woolhandler, 219) and by allowing appeal to the court’s equitable powers to remedy ‘mistakes, injustice, and wrong.’7 But even when exercising this broader jurisdiction, the courts addressed issues  of  legal  error, not issues of the reasonableness of the land ­ commission’s determination. The land cases of the 19th century were nevertheless important stepping stones toward judicial review for reasonableness. By the end of the century, land claims were probably the most common judicial proceedings in the federal courts.8 What courts of equity did in these cases was likely to have influence in other equitable proceedings. Second, the idea that courts could intervene as a matter of equity to correct errors of law, and only those Tonnage of Ships or Vessels, and on Goods, Wares and Merchandises imported into the United States, Ch. 5, Sec. 36, 1 Stat. 29, 47-48 (1789): [W]hen any prosecution shall be commenced on account of the seizure. . .and judgment shall be given for the claimant. . .if it shall appear to the court. . .that there was a reasonable cause of seizure. . .the claimant shall not be entitled to costs, nor shall the person who made the seizure, or the prosecutor be liable. . .. 7 8

  Johnson v. Towsley, 80 U.S. (13 Wol.) 72, 84 (1871).   See Scalia (1970) 884–5 (describing the ‘considerable volume of public-lands litigation’).

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The rise of reason giving in American administrative law  271 errors, began to cement the law-fact distinction that has loomed so large in the subsequent course of judicial review of administrative action. The equitable notions that emerged in the land cases began to migrate elsewhere. According to Professor Louis Jaffe’s standard account, the federal courts’ equitable powers to correct errors and injustice morphed into something like a general presumption of the reviewability of administrative action for legal error (Jaffe 1965). This development was greatly facilitated by the creation of general federal question jurisdiction in 1875.9 By 1902, the Supreme Court seemed willing to reject virtually the whole of the deferential mandamus and injunction jurisprudence of the 19th century. In ringing tones heralding the federal courts as the guardians of the rule of law, the Court said, ‘The acts of all . . . officers must be justified by some law, and in case an official violates the law to the injury of an individual the courts generally have jurisdiction to grant relief.’10 Barriers to direct judicial review did not fall all at once (Jaffe 1965, 337–9), but the seeds of that collapse were sown in the late 19th century land office cases. The connection to the land office cases is just this: the broad statement just quoted, from American School of Magnetic Healing v. McAnnulty, occurred in a case seeking direct judicial review of a Post Office fraud order stopping delivery of the plaintiff’s advertising. But, the only cases cited for the general proposition that errors of law were generally reviewable were public land cases.11 And Justice Peckham, the author of the McAnnulty opinion, did not mention that, unlike that case, all the cited precedents concerned contests between private parties litigating title to public lands. Federal officials were not before the courts in the land cases that his opinion cited. The notion that federal courts could directly review administrative action for errors of law seems to have slipped into the jurisprudence by selective myopia. The Court (consciously or not) failed to notice that the authorities upon which it relied were from quite dissimilar proceedings that did not raise the same separation of powers issue. Once appellate review was established, a familiar dynamic could emerge. In this nowcommon scenario, administrative agencies make initial adjudicative decisions, and courts review those decisions for errors of law. But because agencies, like courts, must apply law to fact, their ultimate judgments are neither purely factual nor purely legal decisions. Courts claiming to review errors of law must somehow draw a line between law and fact while reviewing decisions that are not pure forms of either.12 The stage is thus set for addressing the more fundamental questions of the appropriate relations or roles of courts and agencies when they inhabit the same jurisdictional space—a space composed of mixed questions of law, fact, and policy. The 19th century’s neat division of labor between   The Jurisdiction and Removal Act of 1875, ch. 137, 18 Stat. 470, 470:

 9

[T]he circuit courts of the United States shall have original cognizance, concurrent with the courts of the several States, of all suits of a civil nature at common law or in equity, where the matter in dispute exceeds. . .five hundred dollars, and arising under the Constitution or laws of the United States. . ..   Am. Sch. of Magnetic Healing v. McAnnulty, 187 U.S. 94, 108 (1902).   Id. at 108-09. 12   Notably, precursors to the law-fact distinction also emerged in Land Office cases (Mashaw 2011, 2246 n. 19). 10 11

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272  Comparative administrative law courts and agencies had broken down. But, what that meant for judicial review, and in particular for review for reasonableness (or for the adequacy of agency reason giving), remains to be seen. Here things become somewhat mysterious.

2. REASONABLENESS REVIEW AND THE APPELLATE MODEL So long as the bipolar model of judicial review persisted, review for reasonableness (or of the reasoning of administrative agencies) was irrelevant. Courts either decided cases de novo or merely ruled on whether the officer had jurisdiction to act. In mandamus, courts might require officers to carry out a non-discretionary duty, but the reasonableness of their refusal to act was no part of the case. Reasonableness review was also unnecessary in the following sense: The bipolar model kept judges from invading the space of administrative discretion. Hence, as Professor Thomas Merrill has emphasized, the 19th century judiciary’s concern that the judicial process not be ‘contaminat[ed]’ by taking on aspects of administration was easily ­satisfied.13 But, when courts began to review administrative actions in something like the same way that they reviewed lower-court decisions, some means of distinguishing the judicial function from that of administration was urgently required. This separation of powers concern provides clues for answering two additional questions. First, how did the appellate review model, a model so familiar that 21st century administrative lawyers take it for granted, come to dominate judicial review of administrative action? Second, why has reasonableness, or the adequacy of agency reasons, come to play such an essential role in mediating the court-agency ‘partnership’?14 Professor Merrill has given us the most comprehensive account of the emergence of the appellate model of judicial review in American administrative law.15 According to his analysis, the critical period lies in the early years of the 20th century. And the crucial developments involved the Interstate Commerce Commission (ICC). Under the original Interstate Commerce Act of 1887, the ICC’s orders were not self-executing.16 The Commission had to go to court to seek enforcement, and the courts treated this action as a de novo action in the district court. The district courts took evidence, re-weighed the facts and revisited the Commission’s legal conclusions (Skowronek 1982, 154–5; Merrill 2011a, 953–4).17 Viewing these regulatory decisions as a judicial question, the federal courts routinely overturned ICC determinations (Merrill 2011a, 953). The

13   As Merrill (2011, 980) observes, ‘During the earlier era, the primary concern was that Article III courts would be drawn into matters of ‘administration’ that were not properly judicial. In other words, the concern was not dilution of the judicial power but contamination of that power.’ I agree with Merrill’s account, although the analysis that follows does not exactly track his argument. 14   Greater Bos. Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970) (‘[A]gencies and courts together constitute a “partnership” in furtherance of the public interest. . .’). 15   Id. 16   Ch. 104, § 16, 24 stat. 3769, 384-85. 17   See, for example, ICC v. Cincinnati, New Orleans and Tex. Pac. Ry. Co., 167 U.S. 479, 500-01 (1897); Cincinnati, New Orleans and Tex. Pac. Ry. Co. v. ICC, 162 U.S. 184, 187 (1896).

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The rise of reason giving in American administrative law  273 Supreme Court seemed to have a particular lack of respect for the Commission’s findings, and its decisions rendered the Commission virtually toothless (Rabin 1986, 1212–15). Populist outrage at the Court’s treatment of the Commission prompted a reconsideration of the respective roles of the Commission and the reviewing courts (Merrill 2011b, 394). In the congressional debates leading up to the passage of the Hepburn Act of 1906, the role of judicial review was perhaps the most hotly contested issue (Merrill 2011b, 394–7). Moreover, the question of how the courts were to review the reasonableness of ICC orders was front and center. Everyone apparently agreed that the courts could review for constitutional reasonableness—that is, whether the rates were ‘confiscatory’ (and therefore took private property without just compensation as prohibited by the Fifth Amendment to the Constitution) (Merrill 2011b, 396).18 Others wanted to go further to prescribe a judicial review standard that went beyond constitutional minima. For example, Senator Bailey of Texas offered an amendment to the statute that would have provided explicitly both for constitutional review and for an inquiry into whether ‘the regulation or practices are unjust and unreasonable. . .’19 Indeed, the final text of the Hepburn Act is replete with variations on the word ‘reasonable.’20 All of these uses of the word, however, appear in substantive provisions that establish criteria for ICC determinations. Reasonableness does not appear in the final version of the Hepburn Act’s judicial review provisions because the statute’s final version contains no standard for judicial review at all (Merrill 2011b, 397). Deep disagreements among congressman and senators led to a compromise provision merely providing that ICC orders, ‘except orders for the payment of money,’ take effect in not less than 30 days unless they were ‘suspended or set aside by a court of competent jurisdiction.’21 As Senator Dolliver put the matter, ‘[N]obody knows exactly what the courts of the United States will do with an order of the Commission . . .. [A]side from providing the venue of the suits and distinctly providing that the orders of Commission may be set aside or suspended by a court of competent jurisdiction, we said nothing.’22 Nevertheless, the Hepburn Act revision—making ICC orders self-executing unless challenged and overturned—was a major change from prior practice in which courts tried ICC cases de novo.23 The Supreme Court got the message that its earlier practice had been much too aggressive. A first harbinger of change was the Supreme Court’s decision in Texas & Pacific Railway Co. v. Abilene Cotton Oil Co.24 Although that case did not involve the scope of review of ICC determinations, the Supreme Court held that the Interstate Commerce Act preempted all common law actions concerning whether railroad rates were unreasonable or discriminatory. The opinion emphasized that Congress had intended to give the question of the reasonableness of rates to the Interstate Commerce Commission, not to the courts.25

  Id. at 396.  40 Cong. Rec. 7025 (statement of Sen. Dolliver) (describing an amendment offered by Senator Bailey) (1906). 20   For example, Pub. L. No. 59-337, §§ 1, 2, 4, 34 Stat. 584–85, 588–90 (1906). 21   34 Stat. at 589. 22  40 Cong. Rec. 6778 (1906). 23   See Merrill, supra note 35, at 395. 24   204 U.S. 426 (1907). 25   Id. at 441, 448. 18 19

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274  Comparative administrative law The second shoe dropped in a pair of cases involving the Illinois Central Railroad. The first, Illinois Central I26 is crucial for its treatment of the distinction between questions of fact and law. Distinguishing away most of its prior jurisprudence on review of ICC determinations, the Court declared that the substantive reasonableness of an ICC-established rate was not reviewable by the court. In summing up its ruling, the Court said: The question submitted to the Commission, as we have said, with tiresome repetition, perhaps, was one which turned on matters of fact. In that question, of course, there were elements of law, but we cannot see that any one of these or any circumstances probative of the conclusion was overlooked or disregarded. . .. Whether the Commission gave too much weight to some parts of it and too little weight to other parts of it is a question of fact, and not of law. It seems from the findings, report, and conclusions of the Commission that it considered every circumstance pertinent to the problem before it.27

Two aspects of the Illinois Central I opinion were important for subsequent developments. First, by assigning the question of reasonableness to the facts side of the law-fact distinction, the Court gave up de novo review of the reasonableness of ICC rate orders. Second, the Court reviewed the ICC determination on the basis of the record before it and perused that record to see whether the ICC overlooked or disregarded any ‘circumstance pertinent to the problem before it.’28 Here lie the seeds of reasonableness review in a modern ‘proceduralized’ form. The Court declined to determine the substantive issue or the weight of the evidence. It contented itself with seeing that the ICC had given the issue the consideration necessary to make a reasoned decision—consideration evidenced by the reasoning in the report of the Commission. The emergence of reasonableness review in a proceeding involving the substantive reasonableness of a rate might not appear to be of great significance. But, reasonableness as a standard migrated quickly to other areas of ICC action and beyond. Various formulations of reasonableness review traveled with it. As Professor Merrill details, although the initial cases all involved the ICC, Congress deployed similar standards when establishing judicial review of decisions by the Federal Trade Commission, the National Labor Relations Board, and other alphabet agencies (Merrill 2011b, 403–08).29 Note, however, that this legislative expansion of the appellate model based on the lawfact distinction said nothing about how that distinction was to be applied. Nor did the statutes contain any particular formulation of the reasonableness standard. Hence, while the appellate model, post-Hepburn, was deployed deferentially with respect to the ICC, it could provide the basis for aggressive judicial intervention with respect to other forms of   Ill. Cent. R.R. Co. v. ICC, 206 U.S. 441 (1907).   Id. at 466. 28   Id. 29   Federal Trade Commission Act of 1914, Pub. L. No. 63-203, § 5, 38 Stat. 717, 720 (1914) (establishing that the “findings of the commission as to the facts, if supported by testimony, shall. . .be conclusive.”); National Labor Relations Act, Pub. L. No. 74-198, § 10(e), 49 Stat. 449, 454 (1935) (establishing the same standard for the NLRB). For other examples, see Federal Radio Commission Act, Pub. L. No. 71-494, § 16(d), 46 Stat. 844, 845 (1930); Tariff Act of 1930, Pub. L. No. 71-361, § 337(c), 46 Stat. 590, 704; the Communications Act of 1934, Pub. L. No. 74-416, § 402(e), 48 Stat. 1064, 1094; and the Public Utility Act of 1935, Pub. L. No. 74-333, § 313(b), 49 Stat. 803, 860. 26 27

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The rise of reason giving in American administrative law  275 administrative action, such as the Federal Trade Commission’s determinations of ‘unfair business practices’.30 The law-fact distinction formally structured review, but it apparently failed to determine its substantive intensity when applied to legal conclusions that were, in reality, mixed questions of law and fact. Everything hinged on how the reviewing court labeled the administrative finding. Concerned about the rapid expansion of the administrative state in the New Deal, and particularly the reigning approach to National Labor Relation Board determinations, Congress made clear, in both the Administrative Procedure Act adopted in 1946 and in the 1947 amendments to the National Labor Relations Act, that courts were not to approve agency decisions looking only to see if there was some evidence in the administrative record to support them. Whether the decision was supported by ‘substantial evidence’ was to be determined on the basis of the record as a whole. The Supreme Court quickly recognized that this legislation expressed dissatisfaction with the appellate courts’ and the Supreme Court’s excessive deference to Board determinations.31 Although the statutory language only spoke to how much of the record a court was to take into account in determining substantial evidence, in the Supreme Court’s view, ‘We should fail in our duty to effectuate the will of Congress if we denied recognition to expressed [c]ongressional disapproval of the finality accorded to Labor Board findings by some decisions of this and lower courts. . ..’32 Whether the weight of the evidence favored the Board’s determinations was now said to be a question ‘which Congress has placed in the keeping of the Courts of Appeals.’33 Section 706 of the Administrative Procedure Act—providing the scope of judicial review applicable to all federal agencies—adopted both: (i) the fact-law distinction at the heart of the appellate model of judicial review; and (ii) the ‘arbitrary and capricious’ and ‘substantial evidence’ standards by which reasonableness was to be determined.34 But, given the mushiness and malleability of both the law-fact distinction and the concepts of arbitrariness or substantial evidence, one wonders why this approach was attractive to drafters of a statute that would later take on quasi-constitutional status in the administrative state. One answer may be that the drafters largely were in the 30   FTC v. Gratz, 253 U.S. 421, 427 (1920) (‘The words “unfair method of competition” are not defined by the statute and their exact meaning is in dispute. It is for the courts, not the commission, ultimately to determine as matter of law what they include.’); see discussion in Merrill, supra note 35, at 970-71; but see Gratz, 253 U.S. at 437 (Brandeis, J., dissenting):

Recognizing that the question whether a method of competitive practice was unfair would ordin­ arily depend upon special facts, Congress imposed upon the commission the duty of finding the facts, and it declared that findings of fact so made (if duly supported by evidence) were to be taken as final. The question whether the method of competition pursued could, on those facts, reasonably be held by the commission to constitute an unfair method of competition, being a question of law, was necessarily left open to review by the court. 31   Universal Camera Corp. v. NLRB, 340 U.S. 474, 477–91 (1951) (describing criticism of substantial evidence review in relation to the legislative history of the relevant statutes). 32   Id. at 490. 33   Id. at 491. 34   5 U.S.C. § 706(2)(A), (E) (2012); See also Pierce 2002, §§11.2, 11.4.

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276  Comparative administrative law ­ usiness of codifying what they considered to be the existing best practices of both b courts and agencies. Perhaps. But the Attorney General’s Committee that oversaw the APA’s formulation was hardly blind to the scope of review problems that the contemporary form of the appellate model posed. The Attorney General’s Report on Administrative Procedure noted that court decisions suggested a sharp differentiation between questions of law and fact (Attorney General’s Committee on Administrative Procedure [AGC], 1941, 87–8). But it also understood that the distinction was extremely malleable. Indeed the Report recognizes that different judges were easily capable of conceptualizing the same question as one either of law or fact. In the Report’s words: The question of statutory interpretation might be approached by the court de novo and given the answer which the court thinks to be the ‘right interpretation.’ Or the court might approach it, somewhat as a question of fact, to ascertain, not the ‘right interpretation,’ but only whether the administrative interpretation has substantial support. Certain standards of interpretation guide in that direction. Thus, where the statute is reasonably susceptible of more than one interpretation, the court may accept that of the administrative body. Again, the administrative interpretation is to be given weight—not merely as the opinion of some . . . lower tribunal, but as the opinion of the body especially familiar with the problems dealt with by the statute and burdened with the duty of enforcing it.35

These words, written in 1941, seem to foreshadow the so-called Chevron Doctrine, articulated four decades later, that courts should defer to reasonable agency interpret­ ations of ambiguous statutes.36 Chevron has generated its own cottage industry, one might almost say industrial sector, of academic commentary (Merrill and Hickman 2001, 834; Kerr 1998, 3). We need not pursue these matters further at this stage. The point is merely that by the time of Chevron in 1984—and perhaps even by the time of the Administrative Procedure Act in 1946—­reasonableness review had not only infiltrated judicial review of findings of fact and mixed questions of law and fact, but also questions of law, including questions of statutory interpretation. Given its well-known vagueness and malleability, why has the appellate review model, with its mushy standards of reasonableness, survived? Professor Merrill suggests that the doctrine’s staying power derives from its malleability. In large part, it is a judge-made doctrine, and it leaves judges in the driver’s seat (Merrill 2011a, 997). As the Attorney General’s Committee recognized, within that model, the judges can speak the language of deference to congressional and administrative policies while overturning decisions with which they seriously disagree (AGC 1941, 88). Moreover, it gives the judges cover when the political mood or ‘atmosphere’ changes. Whatever the true explanation, the appellate model of review and the general triumph of reasonableness standards for exercising that review are surely fellow travelers, even if not linked by some tight conceptual bond. The appellate review model and the fact-law distinction provided a space for reasonableness review that was unavailable in the bipolar model of the 19th century. And deployment of some sort of reasonableness standard may 35 36

  Id. at 90–91.   Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984).

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The rise of reason giving in American administrative law  277 have been necessary to bridge the gap between law and fact that inhabits every decision. Whether this law applies to these facts is a question that simply cannot be cabined within the law-fact dichotomy. It is neither, or both, and perhaps the best a court can do is to decide whether the ultimate conclusion is reasonable. But that raises an additional question. What is built into that judicial determination other than intuition? What are the criteria by which a court decides whether an agency’s decision or ultimate conclusion is arbitrary, capricious, without warrant in the record, or lacking in substantial evidence? Without answering that question in some way, courts are hard pressed to explain how they are not taking over the policy functions of the legislature or the executive when declaring an administrative decision unreasonable or arbitrary. The answer that inhabits much of contemporary American administrative law revolves around a proceduralization of reasonableness review. The basic technique is to translate the question of reasonableness into a question of adequate reason giving. And, as we shall see, a key change in the prevailing forms of administrative decision-making and the timing of judicial review precipitated this proceduralizing move.

3.  RULEMAKING AND REASON GIVING The special role of reasons and reason giving in legitimating agency action emerged in the 1970s. It was seemingly prompted by the convergence of several loosely connected developments. One was a general concern that federal administrative agencies were not functioning well. Various causes were offered as grounds for agency dysfunction, ranging from capture by private interests (Jaffe 1970, 235), to the structure of agency legislation, to simple lethargy of aging bureaucratic institutions. The federal courts responded by both increasing their vigilance concerning the justifications offered for agency action or inaction (Shapiro and Levy 1987), and by empowering plaintiffs to seek review through a revision of standing, ripeness, and reviewability doctrines (Stewart 1975, 1716). These judicial developments coincided with a strategic shift of agency regulatory action from individualized adjudications to generalized rulemaking.37 To be sure, federal agencies had historically possessed rulemaking authority. But these rules had been adopted largely for the purpose of facilitating the exercise of the agencies’ other statutory powers, such as, licensing or enforcement, or had been confined to procedural and evidentiary matters.38 Statutes tended to be self-executing—that is, the implementing agency was not required to make rules before the statute could be enforced. The Federal Trade Commission Act, for example prohibited ‘unfair methods of competition in commerce.’39 The FTC could enforce this prohibition simply by bringing charges against alleged offenders. When it adopted rules, the FTC tended simply to provide advice on how it would exercise its prosecutorial functions (Burrus and Teter 1966). These rules did not demand anything   For example, Nat’l Petroleum Refiners Ass’n v. FTC, 482 F.2d 672 (D.C. Cir. 1973).   For example, id. at 685. 39   Federal Trade Commission Act of 1914, Pub. L. No. 63-203, § 5, 38 Stat. 717, 719 (1914). The current codified version of the statutory provision prohibits ‘[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.’ 15 U.S.C. § 45 (2012). 37 38

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278  Comparative administrative law of regulated parties beyond the statutory requirement. They were, instead, ‘safe harbor rules,’ advising participants in particular industries that operation in accordance with the rules would insure that their activities did not violate the statute. Rate-making agencies like the Interstate Commerce Commission or the Federal Power Commission issued accounting rules and rules of procedure,40 but exercised their powers through adjudication. This was true also of licensing agencies like the Food and Drug Administration (Merrill and Watts 2002, 558). FDA regulations specified what evidence was relevant to a determination that a drug preparation was safe and therefore entitled to be marketed, but the operative standard for obtaining a license was the statutory criterion of the safety of the drug for its intended use. In the 1960s, this picture began to change. First, some existing agencies began to adopt rules that had rather clear substantive effects. Numerous factors provoked this move from procedural, evidentiary, and safe-harbor rules to legislative rules. Agencies faced criticism of their lackluster regulatory performance, and resource constraints motivated the agencies to use rulemaking to avoid resource-intensive formal hearings.41 Critiques of the Progressive and New Deal alphabet agencies’ performance had profound effects on the form of new, regulation-enabling legislation as well. The 1960s and early 1970s saw a massive outpouring of new regulatory legislation. This legislation was strikingly different in form from Progressive and New Deal models. Rather than establishing a broad standard of conduct for an independent commission to police, these statutes tended to create single-headed executive agencies, the primary task of which was to adopt regulations specifying the conduct that the regulatory legislation required or prohibited.42 While these statutes had some self-executing provisions, their principle thrust was to empower new agencies to adopt legislative rules. Until those rules were adopted, the legislation had little effect. Moreover, Congress recognized that it was conferring broad new powers on agencies like the Environmental Protection Agency, the National Highway Traffic Safety Administration, the Consumer Product Safety Commission, and the Occupational Safety and Health Administration. While some agencies, like the Securities and Exchange Commission, had long had legislative rulemaking authority with respect to particular topics, these new agencies were given general rulemaking power under broad legislative

40   For example, Uniform System of Accounts Prescribed for Class A and Class B Public Utilities and Licensees, 25 Fed. Reg. 5014 (June 7, 1960) (codified as amended at 18 C.F.R. pt. 101); Interstate Commerce Commission, 1889. 41   See, for example, FPC v. Texaco, Inc., 377 U.S. 33(1964); United States v. Storer Broadcasting Co., 351 U.S. 192 (1956). 42   This was particularly true of the new health and safety regulatory statutes, such as the Clean Water Act, Pub. L. No. 95-217, 91 Stat. 1566 (1977); Consumer Products Safety Act, Pub. L. No. 92-573, § 7(a), 86 Stat. 1207, 1212-13 (1972) (codified as amended at 15 U.S.C. § 2056); Occupational and Safety Health Act of 1970, Pub. L. No. 91-596, § 6(b), 84 Stat. 1590, 1953 (codified as amended at 29 U.S.C. § 655); Clean Air Act, Pub. L. No. 91-604, §§ 108-09 84 Stat. 1676, 1678-79 (1970) (codified as amended at 42 U.S.C. §§ 7408-09); and National Traffic and Motor Vehicle Safety Act, Pub. L. No. 89-563, § 103(a), 80 Stat. 718, 719 (1966) (codified as amended at 49 U.S.C. § 30111). For an extended case study of the development and operation of one such statute, the Motor Vehicle Safety Act, see Jerry L. Mashaw and David L. Harfst, The Struggle for Auto Safety (1990).

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The rise of reason giving in American administrative law  279 standards.43 Those rules would affect large and important industries and, in some cases, virtually all businesses. As a consequence, the congressional drafters built numerous accountability mechanisms into these new regulatory regimes. The most important for purposes of this discussion was a common provision that an agency’s legislative rules could be tested by judicial review immediately upon its promulgation.44 In these proceedings courts would not be asked to determine whether an agency had properly applied its statute to the facts of an individual case. Instead, courts would be asked to determine whether the agency’s policy choice was one: (i) that the legislation authorized; and (ii) that the agency’s supplied rationale adequately supported. This new form of proceeding created something of a crisis for the judiciary. Federal courts had managed to preserve the appearance, and often the reality, of keeping their constitutionally required distance from administrative policymaking by manipulation of the law-fact distinction when reviewing agency adjudications. They were now thrust into an entirely new role. The courts were not reviewing an agency adjudication that was similar to a trial court decision. The exercise of agency discretion under review was transparently a question of policy choice. How could the courts determine the reason­ ableness of agency policies while maintaining their position as simply the monitors of the ­lawfulness of agency actions? To understand the judiciary’s response, we need to remember another aspect of separ­ ation of powers in the American legal culture. The constitutional myth is that Congress legislates; agencies merely implement. But broad delegations of authority, like those contained in the 1960s and 1970s health and safety statutes, seemed to demand agency legislation. This delegation was in some sense a reluctant necessity.45 It was justified by the complexity of the regulatory tasks involved. These regulatory areas demanded high levels of technical information and analytic expertise. Faced with these new and powerful forms of agency rulemaking, the courts took their legislatively-mandated reviewing role seriously. But they encountered some problems. The first was that in rulemaking there is no record of the type that courts are accustomed to reviewing from trial courts or agency adjudications.46 All the Administrative Procedure Act seemed to require of agencies adopting legislative rules was that they provide a ‘concise general statement of the basis and purpose’ of the rules.47 To review

43   See, for example, Consumer Products Safety Act, 86 Stat. at 1212 (‘The Commission may by rule. . .promulgate consumer product safety standards.’); Occupational Safety and Health Act of 1970, 84 Stat. at 1953 (‘The [Labor] Secretary may by rule promulgate, modify, or revoke any occupational safety or health standard. . .’). 44   For example, National Traffic and Motor Vehicle Safety Act, § 105(a)(1), 80 Stat. at 720 ­(‘[A]­ny person who will be adversely affected by such order when it is effective may at any time prior to the sixtieth day after such order is issued file a petition with the United States court of appeals. . .’). 45   And for some, a constitutionally problematic one. For example, Indus. Union Dep’t, AFL-CIO v. Am. Petroleum Inst. (The Benzene Case), 448 U.S. 607, 685–87 (1980) (Rehnquist, J., concurring in judgment) (arguing rulemaking authority under the OSHA is an unconstitutionally broad delegation of authority). 46   For general discussion of the problems created by the absence of well-understood record for review, see Pederson (1985). 47   5 U.S.C. § 553(c).

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280  Comparative administrative law within the standard appellate model, the courts needed more. Judge Carl McGowan articulated (and, in effect, created a solution for) this need in one of the first cases to review a legislative rule under these new statutes.48 The case involved a National Highway Traffic Administration’s rule concerning the provision of head restraints in new automobiles. Judge McGowan said: [O]n the occasion of this first challenge to the implementation of the new statute it is appropriate for us to remind the Administrator of the ever present possibility of judicial review, and to caution against an overly literal reading of statutory terms ‘concise’ and ‘general.’ These adjectives must be accommodated to the realities of judicial scrutiny, which do not contemplate that the court itself will, by a laborious examination of the record, formulate in the first instance the significant issues faced by the agency and articulate the rationale for their resolution. We do not expect the agency to discuss every item [raised] . . . in informal rule making. We do expect that, if the judicial review which Congress has thought it important to provide is to be meaningful, the ‘concise general statement of . . . basis and purpose’ mandated by [the APA] will enable us to see what major issues of policy were ventilated by the informal proceedings and why the agency reacted to them as it did.49

As Judge McGowan’s opinion further reveals, the issues of policy ‘ventilated’ in the rulemaking proceeding include objections made by participants in that process.50 And, if the agency was to demonstrate to the court ‘why . . . it reacted to them as it did,’51 the rulemaking record must reveal the agency’s responses to those objections. In short, the court is not reviewing the agency’s policies; it is reviewing the agency’s reasons for those policies. The APA requirement that agency action not be ‘arbitrary’ is thus transformed into a requirement that the agency demonstrate an adequate reasoning process. But this does not quite answer the question why the court is translating a presumably substantive issue of reasonableness or non-arbitrariness into a proceduralized issue of whether the agency has sufficiently revealed the reasons for acting as it did. The answer seems to be that pre-enforcement review compelled reviewing courts to address general policy questions in a context that makes it difficult for the judiciary, or anyone else for that matter, to describe judicial review as merely deciding cases according to law. In a suit to enforce a rule against particular parties, the claim that the rule was invalid had always been a defense. Thus, when these new statutes moved judicial review from the enforcement stage to review immediately after a rule’s adoption, they superficially changed only the usual timing of review. But the consequences of a shift to pre-enforcement review are profound. Affected parties are allowed to go to court without attempting to comply. Hence, review addresses not the particular circumstances of a rule’s application, but the abstract legality of its commands. Indeed, put in this way, the traditional legal approach has been to say that abstract issues are non-justiciable. From Marbury v. Madison52 forward, the American legal culture has maintained that courts declare the law only as a byproduct of the adjudication of a concrete controversy. To remain in the Motor Vehicle Safety Act context, an enforcement     50   51   52   48 49

Auto. Parts & Accessories Ass’n v. Boyd, 407 F.2d 330 (D.C. Cir. 1968). Id. at 338. Id. Id. 5 U.S. (1 Cranch) 137 (1803).

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The rise of reason giving in American administrative law  281 action against a manufacturer for violating a NHTSA rule is a conventional, concrete case or controversy within the meaning of Article III of the Constitution. Adjudication is about individual rights and responsibilities on the basis of particular facts. That a court might need to address the validity of the NHTSA rule would be a mere byproduct of the need to determine those individual rights. A manufacturer’s suit to invalidate that rule before its effective date on any of multiple grounds—including that the policy chosen was unreasonable—is not a concrete, fact-bound case cast in the same mold. Without pursuing the dense thicket of federal jurisprudence on justiciability, it is perhaps enough to say that judicial review of this sort of abstract controversy is constitutionally problematic. In order to square the command to decide cases in the abstract with the conventional judicial role of deciding ‘cases and controversies,’ courts have been forced to develop a process of review seemingly analogous to the review of adjudications. This translation of rulemaking review into something approximating the appellate model is rhetorically simple, but nevertheless transformative. By analogy to adjudicatory decisionmaking, rules could be said to be arbitrary in two situations: (1) if they have no adequate factual predicate, i.e., an evidentiary interpretation of the arbitrariness standard; or (2) if they violate existing legal norms, in particular the statute delegating authority to the agency, i.e., a jurisdictional or ultra vires interpretation of arbitrariness. Simple enough, but in the context of rulemaking review, serious problems arise, particularly given the broad language of the statutes involved. For example, the Motor Vehicle Safety Act requires that the National Highway Traffic Safety Administration’s rules ‘meet the need for motor vehicle safety,’ protect against ‘unreasonable risks,’ be ‘practicable’ and ‘appropriate,’ and be stated in ‘objective’ terms.53 All these quoted terms demand policy choices. Take for example the question of whether a standard adopted by the agency in fact guards against an ‘unreasonable risk.’54 Presumably the court has to answer this question in order to ensure that the agency is not violating its statute. But how is ‘unreasonableness’ to be judged? On the basis of common law standards of reasonableness?55 On the basis of some analysis of magnitude of public health consequences should the agency not act? On the basis of a consideration of the ratio of costs to benefits in providing a new protection to motorists or pedestrians? On the basis of some understanding of current social perceptions of the acceptability of particular risks? Other interpretations are also possible. The language of the statute does not answer this question. Choosing among possible approaches, however, will have a profound consequence for the policies actually chosen. If a court chooses a particular construction of ‘unreasonable risk,’ it has in a substantial sense chosen the agency’s regulatory program. On the other hand, if it decides that the agency can choose any interpretation that it pleases, judicial review has become a skimpy fig leaf over the naked reality that these statutes make a constitutionally disfavored (but almost always permitted) delegation of legislative policy choice to an administrative agency. 53   National Traffic and Motor Vehicle Safety Act, Pub. L. No. 89-563, § 103(a), 80 Stat. 718, 719 (1966) (codified as amended at 49 U.S.C. § 30111). 54   49 U.S.C. § 30102(a)(8). 55   For example, Restatement (Second) of Torts § 283 (1965) (‘[T]he standard of conduct to which [an actor] must conform to avoid being negligent is that of a reasonable man under like circumstances.’)

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282  Comparative administrative law To be sure, courts have had difficulty in persuading everyone that they are operating in a legal and not a policy space when reviewing agency adjudications. In manipulating the law-fact distinction when reviewing adjudicatory actions, however, courts have mostly managed to conceal the difficulty. They are not addressing broad policy issues in the abstract, but an agency application of law to fact in adjudicating some party’s rights. If determining those rights demands inquiry into the scope of the agency’s statutory authority, that just raises an issue of law. If on review the court discovers that the agency is acting outside its powers, the plaintiff wins, but the congressional policy embodied in the statute (as judicially interpreted) remains in place. Alternatively if the court finds the question to fall into the category of ‘findings of fact,’ it is simply recognizing that such issues are routinely decided in agency adjudicatory proceedings. In pre-enforcement rulemaking review, deft deployment of the law-fact distinction will not so neatly solve the problem. When answering whether an agency rule conforms to its statutory mandate, the statutory norms put at issue are not even remotely like the­‘ultimate facts’ (e.g., this particular business practice is or is not an ‘unfair method of ­competition’) routinely involved in agency adjudications. Moreover, these statutory norms are not rules of conduct but criteria for agency rulemaking designed precisely to confer policy discretion on the administrator. A claim that the court is merely interpreting the law, not deciding public policy is as superficially implausible as the claim that the question is merely an issue of fact. These difficulties pushed courts in the direction of developing the ‘evidentiary’ interpretation of arbitrariness, that is, that the rules have no adequate factual predicate. Yet here again the courts encounter an awkward gap between their traditional reviewing function and their role in the pre-enforcement review of rules. Judicial review of agency adjudications focuses on whether the trial record contains appropriate proof to sustain the findings of fact. But in a rulemaking process, there are no obvious boundaries on the rulemaking record, no accepted standards of ‘proof’ for policy judgments, and no pro­ cedural vehicles that sharply delineate the ‘issues’. As Judge McGowan noted, the agency is engaged essentially in a legislative activity56—an activity that, if carried out by Congress itself, could operate on no evidence at all.57 However, agencies are not legislatures. In many instances, they are substituted for legis­ latures precisely because a given policy needs to be based on more extended consider­ation and a more expert understanding of the problems addressed than the legislature can muster on its own. Agencies are supposed to get the facts right, and in Judge McGowan’s view, provide the reviewing court with a record upon which the court can determine whether the agency has dealt adequately with the issues. The judicial role is not to remake political choices, but to examine agency reasons for agency choices in the light of an appropriate factual record. To be sure the rise of substantive rulemaking by American administrative agencies in the 1960s and 1970s is hardly a complete explanation for the emphasis in contemporary 56   Auto. Parts & Accessories Ass’n v. Boyd, 407 F.2d 330, 338 (D.C. Cir. 1968) (‘The paramount objective is to see whether the agency, given an essentially legislative task to perform, has carried it out in a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future’). 57   Nat’l Tire Dealers & Retreaders Ass’n, Inc. v. Brinegar, 491 F.2d 31, 37 (D.C. Cir. 1974).

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The rise of reason giving in American administrative law  283 American administrative law on agency reason giving. But the rise of adequate reason giving as the modern touchstone of an administrative action’s legality owes much to the changed role of federal reviewing courts, which were thrust, somewhat against their will, into pre-enforcement review of federal administrative rulemaking.

ACKNOWLEDGEMENTS Thanks to David Berke for his superb research assistance.

REFERENCES Attorney General’s Committee on Administrative Procedure (1941), Final Report of Attorney General’s Committee on Administrative Procedure. Burrus B.R. and H. Teter (1996), ‘Antitrust: Rulemaking v. Adjudication in the FTC,’ Georgetown Law Journal 54, 1106–30. Interstate Commerce Commission (1889), Revised and Amended Rules of Practice in Cases and Proceedings Before the Commission. Jaffe, L.L. (1970), ‘The Administrative Agency and Environmental Control,’ Buffalo Law Review 20, 231–8. Jaffe, L.L. (1965), Judicial Control of Administrative Action, Boston, Little Brown. Kerr, O.S. (1998), ‘Shedding Light on Chevron: An Empirical Study of the Chevron Doctrine in the U.S. Courts of Appeals,’ Yale Journal on Regulation 15, 1–60. Mashaw, Jerry L. (2012), Creating the Administrative Constitution: The Lost 100 Years of American Administrative Law, New Haven and London, Yale University Press. Mashaw, J.L. (2011), ‘Rethinking Judicial Review of Administrative Action: A Nineteenth Century Perspective,’ Cardozo Law Review 32, 2241–3. Merrill T. and K.E. Hickman (2001), ‘Chevron’s Domain,’ Georgetown Law Journal, 89(4), 833–921. Merrill, T. (2011a), ‘Article III, Agency Adjudication, and the Origins of the Appellate Review Model of Administrative Law,’ Columbia Law Review 111(5), 939–1003. Merrill, T. (2011b), ‘The Origins of the American-Style Judicial Review,’ in Peter Lindseth and Susan RoseAckerman (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA: Edward Elgar, pp. 389–413. Merrill, T. and K. Watts (2002), ‘Agency Rules with the Force of Law: The Original Convention,’ Harvard Law Review 116(2), 467–592. Pedersen, Jr., W.F. (1975), ‘Formal Records and Informal Rulemaking,’ Yale Law Journal 85(1), 38–88. Pierce, Richard J. Jr. (2002) Administrative Law Treatise, New York, Aspen (4th ed.). Rabin, R.L. (1986), ‘Federal Regulation in Historical Perspective,’ Stanford Law Review 38, 1189–326. Scalia, A. (1970), ‘Sovereign Immunity and Non-Statutory Review of Federal Administrative Action: Some Conclusions from the Public-Lands Cases,’ Michigan Law Review 68, 867, 884–5. Shapiro S.A. and R.E. Levy (1987) ‘Heightened Scrutiny of the Fourth Branch: Separation of Powers and the Requirement of Adequate Reasons for Agency Decisions,’ Duke Law Journal 1987, 387–455. Skowronek, Stephen (1982) Building a New American State: The Expansion of National Administration Capacities, 1877–1920, Cambridge, UK, Cambridge University Press. Stewart, R.B. (1975), ‘The Reformation of American Administrative Law,’ Harvard Law Review 88(8), 1667–813. Weber, Max (1968 [1922]), Economy and Society: An Outline of Interpretive Sociology, Guenther Roth and Claus Wittich (eds), Ephraim Fischoff et al. (trans), Berkeley: University of California Press. Woolhandler, Ann (1991), ‘Judicial Deference to Administrative Action—A Revisionist History,’ Administrative Law Review 43(2), 197–245. Wyman, Bruce (1903), The Principles of the Administrative Law Governing the Relations of Public Officers, St. Paul, Minn., Keefe-Davidson Co.

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17.  The 2015 French code of administrative procedure: an assessment Dominique Custos

In October 2015, the long-awaited French code of administrative procedure was enacted as ‘the code on the relationships between the public and the administration’ (CRPA).1 This new addition to the extensive codified territory of French law brought about a major change, bringing to an end ‘the splendid isolation’ of France in this domain (Vialettes and Barrois de Sarigny 2016, 2). France joined the three-fourths majority of European Union Member States whose law features an administrative procedure act.2 The 2015 codification appears to have been overdue not only in comparison to other EU Member States but also on the global plane. It came almost 70 years after the United States adopted its APA in 1946, the first administrative procedure codification in the common law world. And it came almost 50 years after the first Latin American general law of administrative procedure (Peru in 1967) and almost 20 years after the 1996 expansion of the codification movement to Asia (Japan and South Korea). While the enactment of the CRPA allows French administrative law to catch up with a global codification trend, it also formalizes a significant reconfiguration of the French sources of law in this regard. Indeed, the conventional comparative account of French administrative law emphasizes the contrast between a codified private law and an uncodified administrative law. French administrative and constitutional law are said to exhibit a striking judge-made culture (Bell 2001, 175–85; Bell 1995, 202, 216–19; Brown et al. 1998, 24–5; Berman and Picard 2008, 60–61). In reality, for almost half-a-century, a shift has been occurring that suggests this classical picture must be updated. First, one must account for the growing importance of the national, European and international legislation that has, since the 1970s, displaced the quasi-monopoly of the Conseil d’État as the primary source of French administrative law (Larzul 1994). Second, one must also factor in the codification of substantive administrative law starting in the late 1940s. Both developments point to the fact that, even before 2015, written law had already carved a sizable space for itself in the French administrative landscape. Thus the enactment of the CRPA simply extends an ongoing restructuring between judge-made and written administrative law. Moreover, it is part of an underreported and downplayed gradual codification that, until 2015, had 1   Code des Relations entre le Public et l’Administration: Statutory provisions: Ordinance 20151341, October 23, 2015; Regulatory provisions: Decree 2015-1342, October 23, 2015. With a few exceptions (relating to retrospective and prospective repeal of administrative act effective on June 1st, 2016), the code entered into force on January 1st, 2016. Available at: https://www.legifrance. gouv.fr/affichCode.do?idSectionTA5LEGISCTA000031367679&cidTexte5LEGITEXT00003136 6350&dateTexte520160423 (last visited March 28, 2017). All translations of the CRPA contained in this chapter are the author’s. 2   The only EU Member States remaining without an administrative procedure code are Belgium, Cyprus, Ireland, Malta, Romania, and the UK.

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The 2015 French code of administrative procedure  285 overwhelmingly concerned substantive administrative law. Nonetheless, the CRPA is the most spectacular step in codification because it relates to procedure, an area where the Conseil d’État had withstood the trend toward codification and kept control over French administrative law. This chapter’s assessment of the CRPA proceeds in two steps. Part 1 focuses on the contents of the new code. Even though the CRPA is mostly a restatement and contains few novelties, it encapsulates some key aspects of the transformation of French administrative law over the past four decades. In part fueled by Europeanization and global­ ization, two prominent trends—proceduralization and subjectivization—have altered the nature of classical French administrative law, a dual rebalancing of the structure of French administrative law that is now mostly crystallized in the CRPA. On the one hand, administrative procedure has been catching up with judicial review as a reliable—albeit not yet quite equal—accountability tool. On the other hand, the objective approach to legality and the vindication of the general interest has increasingly been overtaken by a subjective approach, which is particularly reflected in the empowerment of natural and juridical persons through the endowment of procedural rights. Consequently, the CRPA, despite being a restatement, displays many features of modern administrative governance, containing elements of emerging worldwide standards of good administration. It reflects both the demise of the classical image of an imperious public administration as well as the emergence of a new one consistent with standards of transparency and participation. Part 2 contemplates the prospects offered by the 2015 codification, suggesting that, despite the alterations just described, the new law does not fundamentally upend the jurisprudential character of French administrative law. While the CRPA incorporates most of the existing statutes as well as some of the Conseil d’État’s case-law pertaining to procedural law, it does not codify all the judge-made procedural principles and rules. The partial nature of the codification of procedural case-law ensures ample room for continuing leadership of the Conseil d’État, even though the scope of such influence may be somewhat reduced. Because a significant part of the case-law is left uncodified, the CRPA reflects a compromise that combines the adoption of codification as a standard of modern administrative procedure and yet continues the French attachment to the intrinsic case-law flavor of administrative law. After all, the CRPA was designed under the supervision of the Conseil d’État itself and thus its jurisprudential leadership is likely to persist. Moreover, with regard to the codified case-law, the Conseil d’État’s longstanding interpretive resourcefulness suggests that it will remain a strong player in shaping French administrative procedure.

1.  CODIFICATION FEATURES The concept of codification actually played a role in the construction of French administrative law during the nineteenth century (Guglielmi 1996, 109), with codification attempts taking place as early as the first half of the century (Gérando 1829–6). However, during the second half of the nineteenth century, codification dropped off the legislative agenda. With just a few academic advocates continuing to press the case (Ducrocq 1897, XX), the impossibility-of-codification thesis gained wide currency, famously asserted by Édouard Laferrière (1896, T1, XII. 1032), the Conseil d’Etat’s leading member and

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286  Comparative administrative law ­theorist in the late nineteenth century.3 Policy reasons seemed to justify the distinctiveness, with the flexibility of case-law often contrasted with the rigidity of codified statutory or regulatory law. The latter was characterized as a source of ‘sclerosis’ and the former cele­ brated as a source of ‘progress’ (Odent 1975, 7).4 Over time, the absence of codification acquired a symbolic value as it came to be regarded as an ‘emblem’ of administrative law’s distinctiveness (Guglielmi 1996). It shaped the minds of administrative lawyers of all sorts (Vedel 1979–80) and is reflected in the conventional account of French administrative law. It was not until the second half of the twentieth century that the dogma started to erode. Indeed, upon closer inspection, exceptions to the so-called non-codification of administrative law could be detected. This was particularly true in substantive administrative law where a significant number of specific subject-matter codes were adopted, following the 19485 and 19896 governmental pushes for more codification in France. The phenomenon also reached judicial review,7 and even specific areas of administrative ­procedure.8 Nevertheless, general administrative procedure was left out of the process. This isolation was all the more striking given that a body of scholarship (Isaac 1968; Wiener 1975; Linotte 1980; Legrand 1981; Delaunay  1993), as well as the German enactment of a procedural code in 1976, all suggested that codification of administrative procedure was a reachable legislative goal as well as an example of good governance. Nonetheless, the predominant view was that ‘it cannot be said that [French ­administrative] law has been codified’ (Berman and Picard 2008, 61; see also Picard 2009, 66). The key implication was that the pre-CRPA codes preserved the ability of the Conseil d’État to strategically articulate legal principles and be the leading developer of French administrative law (Bell 2006, 71; Picard 2009, 66–7). The gradual codification of the substantive dimension of the law created a sense of an inescapable and threatening tide, against which the non-codification of administrative procedure was a crucial and symbolic stronghold. Indeed, some scholars (Gonod 2006) and public officials (Le Pors 2007)9 blamed the Conseil d’État for the protracted process of codification of administrative procedure, which was longer than in either the US (1939–46) or Germany (1959–76) (Punder 2013). However, the evidence in fact suggests a combined judicial and bureaucratic resistance.10 Furthermore, the shared opposition operated  3   Laferrière was president of the litigation section from 1879 through 1885, and led the Conseil d’État itself from 1886 through 1898. His Traité de la Juridiction Administrative et des Recours Contentieux was the most influential treatise on French administrative law during the period.  4   Odent 1907–79, was president of the litigation section of the Conseil d’État (1967–76).  5   Approximately half of the 40 resulting codes pertained to administrative law.  6   Six of the 20 new codes as well as the nine substantially revised codes dealt with administrative matters.  7   Ordinance 2000-549, May 4, 2000: ‘Code de la justice administrative’ i.e., Code of administrative justice; Code of audit courts 1994.  8   There was only one direct codification of administrative procedure: Public procurement (1964, revised: 2001, 2006 and 2015). As for indirect codification of procedure, i.e., embedded in substantive codes, see Takings (1977, revamped: 2014); Land use (1954, revised: 1973, 2005); Environment (2000).  9   The author was minister of civil service and administrative reforms from 1981 through 1984. 10   Le Pors identifies the interior minister and local governments as additional opponents to the codification in the 1980s. Auby also mentions both judicial and bureaucratic resistance (albeit with no specification) in reference to France; see Auby 2014, 4 and 27.

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The 2015 French code of administrative procedure  287 against the backdrop of a predominantly ‘deferential and reverential’ attitude of professors vis-à-vis the Conseil d’État, at least until the 1980s (Chevallier 1989). Moreover, the Conseil d’État enjoyed certain institutional advantages. Beyond the leadership of its members on the Superior Codification Commission (Commisssion Supérieure de Codification, CSC),11 its influence also was also felt in its ordinary advisory function on legislation.12 As it turned out, the process of codification took two decades. By way of a 1996 Prime Minister’s circular, the drafting of ‘un code de l’administration’, a code of the administration, was included on the CSC agenda, complemented by the intervention of the Interdepartmental Delegation for State Reform. The process, however, stalled quickly (Schwartz 2004, 1860) and was then explicitly abandoned in 2006 (CSC 2006, 18). The project was then revived in 2011 (CSC 2011, 20–22), only to find eventual success in 2015 from a combination of a vigorous push from the Hollande administration as well as the remarkable conversion to the cause of codification within the Conseil d’État (Vialettes and Barrois de Sarigny 2016, 4). Consistent with the codification principle followed in 1948 and reiterated in 1989—and unlike the Napoleonic codes—the CRPA is a codification of the law as it stands (codification à droit constant).13 It amounts primarily to a restatement and contains only a few novelties. 1.1  Mostly a Restatement 1.1.1  Material scope The code of the administration envisioned in 1996 encompassed organizational and procedural rules. When the project was revived in 2011, it was downsized to the procedural dimension. To ensure easier navigation of the code by citizen, the CRPA is organized according to a ‘continuous numbering’ system (Vialettes and Barrois de Sarigny 2016, 4).14 It is structured around five books. Apart from Book 5, which contains overseas provisions, the CRPA is organized along the successive steps of the relationship between the public and the administration. Book 1, entitled ‘Exchanges with the administration,’ deals with the public’s requests, adversary procedure in individualized decisions, and participation in rulemaking. Book 2, entitled ‘Unilateral acts issued by the administration,’ covers the giving of reasons, the entry into force of administrative acts, tacit decisions, as well as retrospective and prospective repeal of administrative acts. Book 3, entitled ‘Access to administrative records and re-use of public data,’ includes 11   The vice-president and the general reporter of the CSC are appointed by the Prime Minister and since 1989, have been drawn from the ranks of the Conseil d’État. Members of the Conseil d’État also regularly serve as special reporters as it was the case for the 2015 code of administrative procedure with Maud Vialettes and Cécile de Barrois de Sarigny. 12   Once a draft code is endorsed by the government, under the constitution the government bill or the draft regulation is subject to mandatory consultation with the Conseil d’État. 13   Prime Minister’s circular, May 30, 1989; Statute of April 12, 2000, Art 3. However, changes were allowed for overall coherence. 14   Under continuous numbering, below each main heading, the regulatory articles immediately follow the corresponding statutory provisions. It differs from the traditional separate numbering where statutory and regulatory provisions are respectively gathered in distinct parts.

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288  Comparative administrative law the institutional and procedural rules relating to the regulatory body overseeing the right to information.15 Book 4, entitled ‘Resolution of disputes with the administration,’ provides for agency traditional remedies as well as alternative remedies and essentially refers to the 2000 Code of administrative justice for judicial review and arbitration.16 Book 5, focuses, as noted above, on ‘Overseas Provisions.’ The code governs only unilateral administrative action. The CRPA thus excludes public contracts law, which was consolidated in a specific code in 1964; as well as the tort liability of public entities, which falls under a special public regime and remains uncodified. The CRPA’s silence on the procedure for filing tort claims against the administration is another example of the code’s incomplete coverage. Indeed, the Conseil d’État initially developed, by way of judicial decision, the common law governing unilateral administrative acts, public procurement and public liability. While the first and the second areas are now codified (except for some special statutes and part of the case-law), the third one remains mostly a territory of judicial creation. The code governs unilateral agency action fully. Contrary to a strict subjective approach to administrative procedure, this codification is not limited to individualized acts. Like the American and the Portuguese APAs, the CRPA also concerns itself with the making of regulations and mixed-nature acts such as declarations of public utility prior to takings. Yet the recent availability of public consultation denotes a subjectivization mainly through public consultation of the making of general and impersonal determinations. As far as the degrees of normativity of administrative action, the code is rather encompassing. The codification is not confined to hard law but rather also applies to soft law such a circulars, policy statements and guidance documents. 1.1.2  Personal scope Not only may the users of public services (both individuals or juridical persons) invoke the procedural rights of the CRPA, so too can public employees.17 Almost all kinds of administration, regardless of the level of government, are subject to its procedural obligations. Consistent with a functional approach, private companies entrusted with a so-called ‘administrative public service mission’ (including social security services) are subject to such duties.18 Among the excluded entities are the so-called ‘services publics industriels et commerciaux’, i.e., public corporations through which government is said to engage in market transactions. 1.1.3  Restatement of case-law It must be emphasized that the CRPA does not codify all the case-law relating to administrative procedure. It consists of a partial restatement of judicial doctrines, particularly 15   The substance of this book will be modified by an open data bill that has been under discussion since January 2016. See Projet de loi pour une République numérique, December 9, 2015, AN 3318. 16   Art L 432-1 re-states the prohibition of arbitration in public matters. Explicit exceptions are found in specific statutes. 17   Art L 100-3. 18   Art L 100-3.

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The 2015 French code of administrative procedure  289 regarding the rights of the defense (Book 1, Title 2), publication and entry into force of administrative acts (Book 2, Title 2), legal certainty (Book 2, Title 2), and administrative remedies (Book 4, Title 1). For the most part, this aspect of the consolidation concerns very well-settled case-law, some of which was originally articulated under the label of general principle of law (GPL). GPLs are highly symbolic of the Conseil d’État’s role in shaping French administrative law as a whole. They operate under the classical and persistent distinction among French legal scholars between statutory interpretation and jurisprudential creation. In the former and ordinary capacity, courts are said to merely be ‘the mouth conveying the words of the statute.’19 In the latter and exceptional capacity, they are viewed as actually wielding a lawmaking power. In administrative procedure, GPLs have been of utmost importance. In fact, the original use of a GPL, introduced towards the end of the Vichy regime, dealt with a procedural issue. In the landmark 1944 decision in Dame Veuve Trompier-Gravier,20 the high court articulated the so-called ‘droits de la defense’, the rights of the defense. Under this GPL, an individual subject to a serious sanction enjoys the right to receive notice of the proposed decision and the charges against her, and to be given a reasonable period of time to defend herself.21 However, the rights of defense GPL do not entail a right to an oral hearing. The inclusion of the right to an oral hearing (upon request only) and the right to a counsel is grounded in statutory law (now codified law of 2000) and seen as a feature of a broader due process doctrine, known as procédure contradictoire, or adversary proceeding, of which the doctrine of the rights of the defense is a subset. These French due process rights offer a good example of how the code synthesizes case-law and statutory developments. The droits de la defense principle is not explicitly mentioned in the CRPA. Instead, the CRPA uses the procedure contradictoire, a term introduced by the 2000 statute. Article L 121-2 CRPA reads: ‘with the exception of cases where decision is made upon a request, individualized decisions for which reasons must be given under Article L 211-1, as well as decisions, which, although not mentioned in this article, are made in consideration of the person, are subject to the procédure contradictoire préalable,’ i.e., the adversary proceeding. As far as the guarantees comprised in such a proceeding, the CRPA distinguishes between administrative acts in general and sanctions in particular. As a general matter, Article L 122-1 lists a written hearing, an oral hearing if requested, and the right to be represented either by a lawyer or non-legal expert person. There is no obligation to satisfy abusive requests (repetitive or systematic) of oral hearing. As regards sanctions, Article L 122-2 requires prior statement of the charges and the opportunity to request communication of her/his file. The question arises as to whether the Conseil d’État will revive the GPL or merely embrace the codal language. The March 2016 Fairvesta ruling seems to suggest a revival.22 In addition to the GPL of the rights of the defense, over the years the Conseil d’État further developed administrative procedure with principles such as non-retroactivity   Montesquieu, De l’Esprit des lois, livre XI, chapitre VI (1748).   Conseil d’État May 5, 1944 Dame veuve Trompier-Gravier. 21   In disciplinary proceedings, and based on statutory provisions, the rights of the defense also include the right to counsel. Statutes may also provide for the right to a complete communication of the individual’s file. 22   CE, March 21, 2016, Société Fairvesta International GMBH. 19 20

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290  Comparative administrative law of administrative acts,23 impartiality,24 publication of already issued regulations within a reasonable period of time,25 legal certainty,26 mutability of regulations,27 transparency in public procurement,28 voidability of acts adopted in violation of procedural ­requirements.29 Yet, not all of the GPLs were codified in the CRPA,30 and where they were codified, it may have taken place with some changes.31 In all likelihood, the Conseil d’État will continue to use the uncodified GPLs, which provides an opportunity to take advantage of the purported ‘flexibility’ of case-law.32 Among the recently pronounced GPLs that are codified in the CRPA, the provisions on legal certainty build on recent case-law in which the Conseil d’État once again showed its ability to take sharp turns while developing the law. It introduced a principle of legal certainty in 2006. The supreme administrative judge made transitional provisions a necessary feature of any new regulation ‘excessively prejudicing public or private interests.’33 Thus, the CRPA endorsed a significant new orientation, i.e., the subjective approach to rulemaking introduced by the Conseil d’État in 2006.34 1.1.4  Restatement of statutory and regulatory law Although it also shows some gaps, the CRPA’s restatement of statutory and regulatory law is broader than its restatement of case-law. Areas of restatement of statutory law include: adversary proceeding or ‘procédure contradictoire’ based on the 2000 statute (Book 1, Title II); giving of reasons, which remains a matter of exception (Book 2, Title 1); publication and entry into force of administrative acts (Book 2, Title 2); tacit decisions (Book 2, Title 3); access to public records (Book 3, Titles 1 and 3); the re-utilization of public data (Book 3, Title 2),35 alternative administrative dispute resolution (Book 4, Title 2); and reference to judicial review remedies (Book 4, Title 3). This aspect of the restatement incorporates   CE June 25, 1948, Société du Journal l’Aurore. Codified at L 221-4 CRPA.   CE October 27, 1999, Fédération française de football. 25   CE December 12, 2003, Syndicat des commissaires et hauts fonctionnaires de la police nationale. Not codified. 26   Société KPMG 2006. Codified at L 221-5 and L 221-6 CRPA. 27   CE December 13, 2006, Lacroix. 28   CE January 30, 2009, Agence nationale pour l’emploi. 29   CE December 23, 2011 Danthony. See below section 2.1. 30   See below section 2.1. 31   Such as the Société KPMG rulings, n. 28 above. Among the elements of case-law incorpor­ ated in Art L 221-5 CRPA is the obligation to adopt transition measures when reliance interests are excessively affected. An example of a new element introduced by the code is that this obligation also applies when the immediate entry into force of a new regulation is impossible. 32   Within the Conseil d’État, the current analysis still echoes the flexibility/rigidity dichotomy language See above section1.1. However, the legal certainty brought about by a code is simultan­ eously emphasized: Guyomar 2014, 68. 33   The landmark case is CE March 24, 2006, Société KPMG, n. 28 above. The quoted language appears in a subsequent case: CE, Lacroix, December 16, 2006. 34  The Conseil d’État ruling followed the path opened seven years earlier by the Conseil constitutionnel when it ruled that statutes ought to be written in respect of the accessibility and intelligibility principle. CC n. 99-421 DC December 16, 1999. It also echoed the CJUE case-law: ECJ, Bosch, April 6, 1962. 35   Ordinance 2016-307, March 17, 2016, codification of provisions relating to the re-­utilization of public data in the CRPA. 23 24

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The 2015 French code of administrative procedure  291 three waves of statutory/regulatory change that began to unfold in French administrative procedure during the second half of the twentieth century as well as a recent ordinance of March 17, 2016.36 The first wave of statute-based procedural change took place in the 1970s, marking the introduction and development of transparency in French administrative procedure. However, not all of these procedural changes are included in the CRPA. The personal data act of January 6, 1978, known as la loi informatique, fichiers et libertés, was not ­codified; this law proclaimed the right to access personal data (the so-called habeas data) and established a related privacy protection authority, the Commission Nationale Informatique et Libertés (CNIL). Also left uncodified was the January 3, 1979 law on (public) archives, which determined the specific conditions of the right to information in this regard. By contrast, the January 17, 1978 Act37 providing for a general right of access to administrative documents, along with a protection authority, the Commission d’Accès aux Documents Administratif (CADA),38 was codified in the CRPA. So too was reasongiving regime found in the law of July 11, 1979.39 The second wave of statutory/regulatory change that now finds itself embodied in the CRPA began in the 1980s and continued to the 2000s. Building on the earlier focus on improved transparency, this wave sought to improve administrative dialogue. A decree of November 28, 1983 (since superseded) dealt with ‘the relationships between administration and users.’ The decree’s provisions were mostly reiterated in the statute of April 13, 2000 on ‘the rights of citizens in their relationships with administrations.’ Not only did these rules acquire statutory rank in 2000 but also they were extended to local governments and social security agencies. Such provisions now figure in Books 1 and 2 of the CRPA. The final wave of statutory/regulatory change embodied in the CRPA took place in the 2010s. These changes focused on simplification (discussed here) and participation (discussed in Section 1.2. below). The first simplification legislation, promulgated on November 12, 2013, dealt with agency inaction. Subject to certain exceptions, it replaced the former principle of implicit refusal with the new principle of tacit acceptance (i.e., if the agency fails to respond to a request from an outside party, it will be deemed to have implicitly accepted the request).40 The new principle applies only to individualized administrative determinations and requests based on statutes or regulations. It covers neither appeals to the agency for internal administrative remedies nor requests that are financial by nature; nor does it apply to civil servant requests. In September 2015, in a step presented as a revolution in French administrative law, the government announced that two-thirds of administrative proceedings would eventually fall under the new principle of implicit acceptance.41 The 2013 reform is now codified in Book 2 Title 3 of the CRPA.

 Id.   Codified at Art L 300-1 et seq, Book 3, Title 1, CRPA. 38   Codified at Art L 340-1 et seq. Book 3, Title 4, CRPA. 39   Codified at Art L 211-2 et seq, Book 2, Title 1, CRPA. The lack of reason-giving requirement is subject to only two exceptions: unfavorable decisions or decisions derogating from existing standards. 40   Arts L 232-1 et seq, Book 2, Title 3, CRPA. 41   http://www.gouvernement.fr/action/le-choc-de-simplification (last visited on April 18, 2016). 36 37

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292  Comparative administrative law The other simplification laws incorporated into the CRPA include the ordinance of November 6, 2014, which authorized public services users to make electronic requests and responses to administrations. Perhaps more importantly, they include the ordinance of May 7, 2015, which formalized the so-called ‘tell us once’ experiment launched three years earlier. This procedure allows businesses and individuals to supply a given piece of information to government once and for all, thus sparing them redundant administrative formalities. Rather, it is up to public agencies to circulate already submitted information within the administrative machinery. These two ordinances are codified in Book 1 Title 1 of the CRPA.42 1.2  A Few Novelties As mentioned previously, the third wave of legislation that the CRPA codified dealt with participation. In this regard, not only does the CRPA feature recent rules but also it introduces new general principles to be observed by public administrations when they voluntarily engage in a public consultation.43 In addition to this main novelty, the CRPA changes the case-law relating to the repeal of administrative acts,44 which are dealt with further below. 1.2.1  Participation: a common core set of rules for optional public consultation As regards participation, the CRPA incorporates the substantial leap forward taken with the passage of the so-called Warsmann Act of May 17, 2011 (Rose-Ackerman and Perroud, 2013). Article 16 of that law enabled public administration to use its discretion to opt for an internet-based public consultation instead of any required consultation with an advisory commission. This approach built on an earlier break-through in an act of July 12, 2010, which saw the recognition of a genuine right of public participation in decision-making with an environmental impact, in furtherance of Article 7 of the charter on the environment.45 To be sure, public participation in rulemaking proceedings remains entirely optional; there is no general right to notice-and-comment in France. Where the right to public participation is recognized, it is either constitutional (based on the en­vironmental charter), or mandated by statute or regulation. Otherwise, the discretionary nature of public consultation recognized by the Warsmann Act prevails.46 As a result of the existence of a mandatory and a discretionary approach to public participation, there is no single set of procedural guarantees. In addition to the internal diversity of mandatory requirements, differences exist between the mandatory and optional regimes. With regard to mandatory public consultations in national rulemaking

42   2014 ordinance: Art L 112-7 though Art L 112-15. 2015 ordinance: Art L 113-12 and L 113-13. 43   Book 1, Title 3. 44   Book 2, Title 4. 45   Adopted in 2004 and incorporated into the constitution in 2005. 46   Interestingly, there is only one case of a statutory right to public participation as to the rulemaking proceedings of an independent regulator. It relates to the postal and telecommunications body (ARCEP), which is required to engage in a public consultation before taking ‘measures that have an important impact on the market and affect the interests of final consumers.’

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The 2015 French code of administrative procedure  293 proceedings (other than proceedings with environmental impact), the only requirement provided by the CRPA (R 132-8) is publication of the consultation on a government website. Consequently, procedural requirements are to be found either in the specific statutes and regulations or in rules devised by the public authority itself. As for the optional regimes, the CRPA sets out two sub-categories. First, the agency may decide to substitute public participation for a mandatory neo-corporatist consult­ ation (L 132-1 through R 132-7)—what I call substitute optional public consultation. Second, the agency may decide to use public consultation cumulatively with a traditional consultation or, where there is no obligation to consult with a commission, alternatively (L 131-1)—what I call purely optional public consultation. While the CRPA provides for a common set of principles for the purely optional public consultation, this common core is distinct from, and somewhat weaker than, the rules applicable to substitute optional public consultation. Under the CRPA, the optional participation that substitutes for a mandatory consult­ ation is subject to three requirements. Publication of the consultation procedure is the first (L 132-2), including publication of the proposed act, an explanatory notice, and the anticipated date of entry into force (R 132-5). The second requirement is the obligation to publish a synthesis of received comments with complimentary information left to the authority’s discretion. The third is the minimal 15-day duration for consultation (Art L 132-3). Publication of comments themselves (as opposed to the required synthesis), as well as the date of publication of the synthesis, the highlighting of the comments endorsed by the agency, and giving reasons for the final decision are all subject to the discretion of the agency. The practice of discretionary public consultations has greatly advanced since the late 1990s. As far as the procedural rules governing such consultations are concerned, administrations have in the past tended to freely decide how to proceed and whether to stick to the same procedural rules and whether to make them public. Against this background of uncertainty and diversity, the common core of procedural rules spelled out in the CRPA for purely optional public consultation (Art L 131-1) appears to be a significant improvement. It is designed to rationalize and bring some degree of unity to an otherwise multifarious practice. The common regime for purely optional public consultations consists of four principles. First, the consultation procedure must be published. Second, pertinent information on the proposed action must be provided. When combined, these first two principles correspond roughly to the first requirement relating to substitute optional public consult­ ation. Third, a reasonable comment period must be allowed. Here the code shows some flexibility by not imposing a fixed or even a minimal comment period; instead it leaves room for tailoring according to circumstances. Fourth, the outcome of the consultation or the action to be taken must be made public but at a time deemed appropriate by the organizing authority. If Article L 131-1 CRPA fills in the gaps and seeks to make purely optional public consultation more uniform, it does so rather sparingly. Missing are guarantees of the meaningfulness of comments and the representativeness of participants. It does not even explicitly require that a synthesis of comments be published, nor does it require reach-out efforts to all interested persons, let alone the giving of reasons. It remains to be seen whether the existence of a common core of binding principles provided for a discretionary practice of public consultation results in a more robust participatory

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294  Comparative administrative law experience than the practice based on non-binding guidelines found in, say, Ireland, the UK, Norway or Japan. 1.2.2  Potential innovation: the material scope of the purely optional public consultation If the diversity of regimes of optional public consultation and their respective deficiencies are a source of concern, discussion of the material scope of the purely optional public consultation sheds a more positive light thanks to the potentially innovative language that defines it. The new procedural requirements apply to ‘the conceptualization of a reform, the design of a project or the making of an act.’47 The striking language is ‘act.’ Contrary to the other public consultation provisions, Article L 131-1 does not refer to a regulatory act, ‘un acte réglementaire,’ which is the product of a binding rulemaking. Due to the absence of qualifier to the noun ‘act,’ the broad language article may thus be interpreted as covering both legislative and non-legislative rules (Saunier 2015, 2426). However, Article L 131-1 is located under a heading devoted to decisions (Book 1 Title 3), which, in French administrative law, are binding. There is therefore a contradiction between the encompassing language of Article L 131-1 and the restrictive language of the heading. It is for case-law to resolve such a contradiction. Interestingly, the definition of the unilateral administrative act provided by the CRPA in Book 2 (Art L 200-1) includes both binding and non-binding acts (Delvolvé 2016, 35).48 By analogy, an all-inclusive material scope may be retained for Article L. 131-1. Moreover, there is at least one excellent policy reason why the broad language should prevail. It relates to the context of parsimonious conferral of rulemaking power in France. Notably, independent regulators are not ordinarily vested with the power to make rules that carry the force of the law. When such power is conferred upon them, it is normally limited in terms of material scope and may be subject to ministerial approval. Absence or insufficient delegation of binding rulemaking power to independent regulators tends to foster a robust use of non-legislative rules. Because soft rulemaking is, as a consequence, proportionally significant in independent agency-made law, explicit statutory procedural norms governing their adoption are particularly appropriate as a means of ensuring a basic degree of legal certainty. Likewise, the developing trend of behavioral regulatory techniques in France, as elsewhere, also calls for such a broad reading in furtherance of good regulatory governance. Any such acknowledgment of the broad coverage of the procedural principles of purely optional participation proceedings would be a significant conceptual move in comparative administrative law. If indeed both hard and soft lawmaking by administrations are included in the scope of Article L 131-1 (as it implicitly provides), the French CRPA stands out among general administrative procedure acts. The implicit extension of participation to non-legislative rules signals an extensive conception of participatory administrative decision-making that does not rely on the binding/nonbinding distinction to determine the applicability of basic procedural principles. If this interpretation is confirmed, the CRPA would be setting a new frontier in participative administration. Adopting such a conception for the CRPA, Article L 131-1 would

47 48

  Art L 131-1.   Art L 200-1 regards exclusively Book 2 provisions.

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The 2015 French code of administrative procedure  295 echo the ­recommendation made by the Conseil d’État in its 2013 report.49 It would also reflect the views expressed by the Administrative Conference of the United States (ACUS) in 1970 (Rose-Ackerman et al. 2015, 81) and the American Bar Association in 1981. It would be in keeping with the predominant practice of French independent regulators, as well as the voluntary practice of notice-and-comment developed by some American agencies in response to the ACUS exhortations. Arguably Japanese administrative authorities are adopting a similar approach in furtherance of a 1999 cabinet resolution. It would likewise find support in the 2016 extension of judicial review to administrative soft law.50 It would, moreover, be consistent with the longterm ­extension perspective mentioned in 2014 by the drafters of the ReNEUAL Model Rules on EU Administrative Procedure (see Hofmann and Schneider in this volume). Lastly, it is worth noting that the regulatory measures the EU Commission published in connection with the proposal for transatlantic regulatory cooperation in March 2016 include guidance documents.51 On the other hand, it would stand in stark contrast with the US Supreme Court March 2015 decision in Perez overruling the D.C. Circuit’s 1997 Paralyzed Veterans precedent, which required notice-and-comment rulemaking to amend or repeal certain kinds of soft law instruments. 1.2.3  Unification of rules of retroactive and prospective repeal of administrative acts Whereas the change introduced by the CRPA regarding participation affects legislation, the change regarding the repeal of administrative acts affects case-law. The new code rules are articulated in reference to a judge-made distinction between withdrawal (retrospective repeal) and abrogation (prospective repeal) of administrative acts. In order to simplify the law and reinforce legal certainty, the CRPA unifies several different legal regimes. The CRPA provides for a general rule that applies to decisions regardless of whether they create52 or do not create rights,53 or whether they are explicit or tacit positive acts. Two conditions apply. First, there is an unlawfulness condition: the decision must be illegal. Second, there is a four-month period condition: repeal is not possible beyond the four months following issuance. This solution means that under the new approach of the Code, the balance between legality and security in respect to decisions creating rights is the same for all decisions. The general rule is also subject to two exceptions. With regard to decisions creating rights, the time-period requirement is waived for withdrawal when the conditions for a decision are not met or violated.54 With regard to decisions that do not create rights, in the case of sanctions, withdrawal is possible at any time.55 Undoubtedly, agencies have welcomed the simplification brought about by the CRPA in the law of

49   Conseil d’État, Le droit souple, étude annuelle 2013, La documentation française, n. 64, 2013 (calling for a standardization of soft law procedure). 50   The 2016 Fairvesta ruling evidences that the Conseil d’État relies on similar procedural rules to check the formal legality of hard and soft law action. See n. 22. 51   EU Commission March 21, 2016 proposal for regulatory cooperation. Available at: http:// trade.ec.europa.eu/doclib/docs/2016/march/tradoc_154377.pdf (last visited March 28, 2017). 52   Art L 242-1. 53   Art L 243-1. 54   Art L 242-2. 55   Art L. 243-4.

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296  Comparative administrative law repeal of administrative acts because of the confusion caused by the complex nature of the older judge-made rules.

2.  CODIFICATION PROSPECTS Of course, the interactive pressures between the legal systems of the EU and the Member States warrant a reflection on the European prospects of the French codification. Due to space constraints, only some aspects of its national prospects are discussed below. 2.1  Impact of CRPA on Robustness of Case-Law? As explained above, the main reason for the Conseil d’État’s resistance to codification of administrative law in general, and administrative procedure in particular, was the fear that codification might result in a significant loss of control over the development of French administrative law. This fear is hardly peculiar to France: in England, for example, the passage of the 1965 Law Commissions Act caused fears that law reform through codification might ‘result also in the appellate courts playing a much less important part in the life of the law’ (Scarman 1967, 361). From a general standpoint, it is appropriate to bear in mind the conclusions of some ­comparative studies on the reality of judge-made law across legal families. Neil MacCormick and Robert Summers highlighted the universality of the practice of precedent regardless of the codified or uncodified context of judicial intervention (MacCormick and Summers 1997; Summers 2013, 201 et seq.). Mitchel Lasser (1995, 2009) uncovered the unofficial hermeneutics of law creation by the French private law judge who is ­nevertheless officially without lawmaking capacity under the civil code. From a more specific standpoint, there are at least three sets of reasons to be confident that the 2015 CRPA will not inevitably result in a marginalization of the Conseil d’État in the construction of French administrative law and procedure. First, it must be emphasized that not all GPLs have been codified. The partial codification of GPLs has strategic significance as it ensures that some key aspects of procedural law are left under the primary purview of the Conseil d’État, at least until future legislative incursions. The conspicuous inclusion of some elements of the case-law in the Code goes hand in hand with the surreptitious exclusion of some other elements. The 2015 codification of French administrative procedure thus turns out to be strategically incomplete. Indeed, it appears that its acceptability to its long-time judicial opponent and recent convert to procedural codification, the Conseil d’État, was implicitly conditioned on its incompleteness with regard to the judicial foundation of its construction. Second, inasmuch as some of the CRPA provisions incorporate case-law, in all likelihood the old case-law will continue to inform their interpretation going forward. Thus, codified GPLs are likely to be used with the same constructive zeal as before codification. Of p ­ articular note is Article 100-2, which states the six overarching principles of ­administrative action: the pursuit of general interest; legality; neutrality; laïcité ­(secularism); equality; and impartiality. The list reflects the founding contribution of the Conseil d’État, but more importantly, it does not provide any definition for these governing principles, leaving room for additional judicial elaboration of their meaning. This

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The 2015 French code of administrative procedure  297 will undoubtedly help the Conseil d’État to keep a sizeable measure of control over the development of the law. Third, the interpretive techniques used by the Conseil d’État to construe regulatory provisions, on the one hand, and statutory provisions, on the other, are sometimes similar. This suggests that the statutory nature of the 2015 codification will not negate the leading position of the Conseil d’État in the development of the law. Evidence of this continuing ability may be found in the 2011 ruling on the voidability of an act due to procedural violations, interpreting the Warsmann Act of March 17, 2011.56 The Conseil d’État decided the Danthony case of December 23, 2011, applying its standard interpretive technique that it had earlier used to construe the 1983 decree (Le Pors 2007). Under that technique, a GPL was read into a regulatory provision (Art 3 of decree) and relied upon to resolve the legal issue. Likewise, in 2011 the Conseil d’État characterized the recent statutory provision as a rule derived from a principle, which it articulated in more general and nuanced terms than the statutory rule.57 Noticeably, the high court did not make any reference to a higher written norm, such as the Constitution or a Treaty, or EU law. Likewise, it refrained from specifically referring to the GPL category, probably because GPLs (as opposed to constitutional principles) do not traditionally prevail over statutes. It remains to be seen how pervasive the resort to such unenumerated principles will be in the Conseil d’État’s future approach to statutory interpretation. For the time being, the extension of the technique from the regulatory to the statutory domain is suggestive of the strength of the existing jurisprudential culture and its potential for ­transcending the apparent constraints imposed by codification on judicial creativity. Turning to the actual substance of the Danthony case, the significance of the principle of voidability of an act issued in violation of procedural requirements must be stressed. The principle denotes a pragmatic approach to the impact of procedural deficiency on the stability of the law. As such, it is reminiscent of the American case-law on the violation of the prohibition on ex parte contacts.58 The flexible approach to balancing procedural rights and legal certainty resonates particularly at a time when, as symbolized by the CRPA, administrative democracy tends to be conditioned on administrative procedure. The Conseil d’État’s 2011 pronouncement concerned consultation with advisory commissions. In 2015, it applied the principle to the procedure required for public inquests (preCRPA era)59 and construction permits (post-CRPA).60 This case-law gives clear insights into the approach that the high court is likely to follow when called to interpret other   See supra n. 48 and accompanying text.   The statute provided that a procedural deficiency during the consultation of an advisory commission warranted annulment of an administrative act only if it had influenced the sense of the decision made on advice. The principle articulated by the Conseil d’État applied to any procedural violation and was also more nuanced because voidability may result not only from the influential effect of the violation on the decision but also from the loss of a guarantee by the interested person. The principle replaces the substantial/non-substantial formalities distinction that had prevailed under the previous case-law. 58   See, e.g., Professional Air Traffic Controllers Org. v. Federal Labor Relations Auth., 685 F.2d 547, 564 (D.C. Cir.1982). 59   CE February 27, 2015, Ministère de l’intérieur – Communauté Urbaine de Lyon. 60   CE, December 23, 2015, Mme L et autres. 56 57

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298  Comparative administrative law procedural requirements in the CRPA, including the common set of procedural principles that must inform optional public consultation. Lastly, the post-CRPA ruling on the reviewability of independent regulators’ soft law acts is an excellent example of the Conseil d’État’s continuing ability to develop the law.61 In March 2016, building on one of its famous creations, the recours pour excès de pouvoir, the Conseil d’État decided to extend this ultra vires review to advisory opinions, recommendations, warnings and positions issued by independent regulators. The newly declared availability of judicial review of such non-binding acts is conditioned on either their prescriptive tenor or the significance of their impact, including economic and behavioral impact. The Conseil d’État extended the review mechanism to agency soft law without any clear textual support, whether in the 2015 CRPA (Art L 431-1) or the 2000 Code of Administrative Justice to which the CRPA refers in this matter. Moreover, to determine the procedural legality of these soft acts, the court explicitly relied on its droits de la defense GPL,62 although it ascertained that both a written and an oral hearing had been provided. In other words, in the post-CRPA era, GPLs, whether incorporated (as in this case) or unincorporated in the code, continue to be used for judge-law making. 2.2  Dual Regime of Participation and Hybridization of the Public Interest The adoption of the CRPA raises awareness of the procedural dimension of French policy-making, which may be understood as a series of dual regimes. This duality is reflected, first, in the combination of a constitutional requirement for impact assessment as to government (but not parliamentary) bills63 and a circular-based practice of impact assessment for certain draft governmental decrees.64 It is reflected, second, in public participation in regulatory policy-making. Since the 1980s, and increasingly since the 2010s, the preferred form of public participation has shifted from a neo-corporatist, ‘republican’ model using advisory committees toward a more pluralistic model involving consult­ ation with the public at large. This ongoing move results in an old-new duality in which France may be said to be experimenting with a hybridization of the modes of formulating the public interest. As this admixture of republicanism and pluralism is unfolding, the ­pluralistic model is developing with complexity. Indeed, consultation with the public at large comes in diverse shapes: it may be through a public inquest, a so-called debate, or a public consultation stricto sensu. Even in this strict sense, public consultation is subject to a variety of regimes: a constitutional requirement of public consultation in environmental policy-making; some statutory mandates for public consultation; and general statutory authorization for the agency, at its discretion, to hold a public consultation. However, in the later case, there are two distinct models that may be followed, either substitute optional public consultation or purely optional public consultation. Due to the declaratory character of codification of 61   CE, March 21, 2016, Société Fairvesta International GMBH; Same date, Société NC Numéricable. The facts of the cases predate the CRPA. 62   Société NC Numéricable, Point 9. 63   This requirement is grounded in the July 23, 2008 constitutional amendment implemented by the organic law of April 15, 2009. 64   Prime Minister’s circular of February 11, 2011.

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The 2015 French code of administrative procedure  299 existing law, it is not surprising that the CRPA has not really altered the pre-codification complexity. But future developments will likely need to face the challenge of regime unification or harmonization. Moreover, the transplantation of the pluralistic model is still at an early stage and is supported by some degree of enthusiasm. Lessons from the pitfalls experienced by the American model (such as highly uneven participation, ossification, procedural evasion) have still not been fully examined or absorbed. It is also still unclear whether the neo-corporatist model is destined for long-term marginalization65 or whether a combination of the two models might emerge, one that seeks to overcome their respective defects. Likewise, sufficient guarantees for effective participation still need to be worked out. In this regard, the articulation of the balance between participation and transparency in French administrative democracy requires further reflection, which I take up in the next and final section. 2.3  The Quest for Balance between Participation and Transparency It is worth noting that, under the 2015 CRPA, the new participation rules are combined with a principle that reason-giving is not required, which, from a broader EU perspective, reflects a kind of French administrative-procedural exceptionalism (Autin 2011). Clearly, the transparency derived from the giving of reasons ensures the effectiveness of participation, whether in the form of the right to be heard in adjudicatory proceedings or of the right to comment on draft administrative rules. Transparency and participation work best when they operate in tandem to the benefit of administrative democracy. However, the limited scope of reason-giving requirements in French law is not entirely without justification. By not systematically requiring the public administration to state the reasons for its decisions, the law may foster stability inasmuch as the final decision cannot be challenged on this ground. In environmental participation, in 2012 the French Parliament endorsed a compromise solution, consisting of a duty to give reasons in a separate document to be published online for a limited period of time .66 Although this requirement was not included in the common core of principles articulated in the CRPA for the purely optional public consultation, the judicial reaction to it shed some light on the potential attitude of the courts, should such requirement be expanded. In a (preCRPA) 2015 ruling,67 the Conseil d’État refused to regard defective reason-giving in the separate document as a ground for invalidation of the administrative decision itself. This restrictive interpretation, embraced in the context of the mandatory environmental public consultation, shows a persistent resistance to the indirect expansion of this seemingly crucial dimension of transparency. This ruling augurs ill for the use of judicial review to reinforce the CRPA participation rights. In light of this recent case-law, the Conseil d’État does not (yet?) seem to see itself as a champion of the effectiveness of public participation in a way reminiscent of American courts’ expansive analysis of the notice-and-comment provisions of the US APA.

  As suggested by the substitute public consultation regime.   Act of December 27, 2012, amending the Act of 2010. 67   CE, April 17, 2015, Association eau et rivières de Bretagne. 65 66

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300  Comparative administrative law

REFERENCES Auby, Jean-Bernard. 2014. Codification of Administrative Procedure, Brussels: Bruylant. Autin, Jean-Louis. 2011. ‘La motivation des actes administratifs unilatéraux, entre tradition nationale et évolution des droits européens,’ Revue Française d’Administration Publique, 1/2011 (n.137–138), 85–99. Bell, John. 1995. French Constitutional Law and French Legal Cultures, Oxford UK: Oxford University Press. Bell, John. 2001. French Legal Cultures. London: Butterworths. Bell, John. 2006. Judiciaries within Europe: A Comparative Review. Cambridge UK: Cambridge University Press. Berman, George and Étienne Picard. 2008. Introduction to French Law. Alphen aan den Rijn: Kluwer Law International. Brown, Lionel Neville, John Bell and Jean-Michel Galabert. 1998. French Administrative Law. Oxford UK: Clarendon Press. Chevallier, Jacques. 1989. ‘Changement politique et droit administratif,’ in Les usages sociaux du droit. Paris: Presses Universitaires de France. Commission Supérieure de la Codification (CSC): Reports. Delaunay, Bénédicte. 1993. L’amélioration des rapports entre l’administration et les administrés, contribution à l’étude des réformes administratives entreprises depuis 1945. Paris: Librairie générale de droit et de jurisprudence. Delvolvé, Pierre. 2016. ‘La définition des actes administratifs,’ Revue Française d’Administration Publique, 3/2016 (n.159), 35–39. Ducrocq, Théophile. 1897. Cours de droit administratif et de législation française des finances avec introduction de droit constitutionnel et les principes du Droit public. Paris: Fontemoing. Gérando, Joseph-Marie. 1829–1836. Institutes du droit administratif français, ou Éléments du Code administratif réunis et mis en ordre. Paris: Nève. Gonod, Pascale. 2006. ‘La codification de la procédure administrative,’ Actualité Juridique, Droit Administratif, no. 9, 489–92. Guglielmi, Gilles. 1996. ‘L’idée de codification dans la construction du droit administrative français au XIXème siècle,’ Annuaire d’histoire administrative européenne, vol. 8, 109–33. Guyomar, Mattias. 2014. ‘L’ordonnancement des normes: la valeur des codes – Approche contemporaine,’ CSC 2014 Report, Annexe 5. Isaac, Guy. 1968. La procédure administrative non contentieuse. Paris: Librairie générale de droit et de jurisprudence. Laferrière, Édouard. 1996.  Traité de la Juridiction administrative et des recours contentieux, tome 1, Paris: Berger-Levrault. Larzul, Tanneguy. 1994. Les mutations des sources de droit administratif. Paris: L’Hermès. Lasser, Mitchell de S.O. l’E. 1995. ‘Judicial Self Portraits: Judicial Discourse in the French Legal System,’ Yale Law Journal, 104, 1325–410. Lasser, Mitchell de S.O. l’E. 2009. Judicial Deliberations: A Comparative Analysis of Judicial Transparency and Legitimacy. Oxford UK: Oxford University Press. Legrand, André. 1981. ‘La codification de la procédure administrative en France.’ Journées de la Société de Législation Comparée, 181–91. Le Pors, Anicet. 2007. ‘Chronique d’une mort annoncée: le décret du 28 novembre 1983.’ La Semaine Juridique Administrations et Collectivités territoriales, no. 6, 21–6. Linotte, Didier. 1980. ‘La motivation obligatoire de certaines décisions administratives.’ Revue du Droit Public, no. 6, 1699–715. MacCormick, Neil and Robert Summers, eds. 1997. Interpreting Precedent. Aldershot: Dartmouth Publishing; Brookfield, VT: Ashgate Publishing. Odent, Raymond. 1975. Preface to Céline Wiener, Vers une codification de la procédure administrative, Paris: Presses Universitaires de France. Picard, Etienne. 2009. ‘The public-private divide in French law through the history and destiny of French administrative law,’ in Matthias Ruffert, ed., The Public-Private Divide: Potential for Transformation, London: British Institute of International and Comparative Law, 17–84. Punder, Hermann. 2013. ‘German administrative procedure in a comparative perspective: Observations on the path to a transnational ius commune proceduralis in administrative law,’ International Journal of Constitutional Law, 11 n. 4, 940–61. Rose-Ackerman, Susan and Thomas Perroud. 2013. ‘Policymaking and public law in France: Public participation, agency independence, and impact assessment,’ Columbia Journal of European Law, 19, 223–310. Rose-Ackerman, Susan, Stefanie Egidy and James Fowkes. 2015. Due Process of Lawmaking, Cambridge UK: Cambridge University Press. Saunier, Sébastien. 2015. ‘L’association du public aux décisions prises par l’administration,’ Actualité Juridique, Droit Administratif, no. 43, 2426–32.

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The 2015 French code of administrative procedure  301 Scarman, L.G. 1967. ‘Codification and judge-made law: A problem of coexistence,’ Indiana Law Journal, 42, 355–68. Schwartz, Remy. 2004. ‘Le code de l’administration.’ Actualité Juridique de Droit Administratif, no. 34, 1860–61. Summers, Robert. 2013. Essays in Legal Theory. Dordrecht: Springer. Vedel, Georges. 1979–1980. ‘Le droit administratif peut-il être indéfiniment jurisprudentiel.’ Études et Documents du Conseil d’État, no. 31, 31–44. Vialettes, Maud and Cécile Barrois de Sarigny. 2016. ‘La fabrique d’un code,’ Revue Française d’Administration Publique, no. 1, 4–8. Wiener, Céline. 1975. Vers une codification de la procédure administrative, Paris: Presses Universitaires de France.

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18.  Three generations of administrative procedures Javier Barnes

1. INTRODUCTION: A TAXONOMY FOR ADMINISTRATIVE PROCEDURES—SEVEN VARIABLES AND THREE GENERATIONS Every legal order needs a system of making initial administrative decisions and a system of administrative adjudication, on the one hand, and, on the other, a system of administrative rule-making. These systems give rise to a large number of bewilderingly diverse administrative procedures. This chapter proposes a methodology to classify different kinds of administrative procedures from a historical and comparative perspective, so that we have a better grasp of the differences in form and function between various administrative law regimes. I identify seven variables according to which it is possible to distinguish three generations of administrative procedures (Section 1).1 This taxonomy of generations involves both descriptive and prescriptive knowledge (Section 2). In the first edition of this book, there is a deeper explanation of this evolution in a contemporary context. Finally, I provide examples of these three generations (Section 3). 1.1 Definitions For the purposes of this chapter, the following definitions apply: A. By ‘administrative procedure,’ I mean a set or system of rules that govern the administrative decision-making process (whether the outcome is initial decision, administrative reconsideration or regulation). Traditionally, administrative procedure is conducted in a linear way that resembles a judicial process: it is a set of linked and staged formalities, that is, a mandatory and a predetermined proceeding.2   However, according to a much broader and more contemporary understanding (Barnes 2015c), administrative procedure encompasses much more. First, it includes

1   I provided a lengthier explanation of this evolutionary context in the first edition of Comparative Administrative Law (Barnes 2010, 336–42.) See also in the first edition the table (three generations of administrative procedures), pp. 346–9, and more references, pp. 355–6. 2   Traditionally, administrative procedure has been thought of as an orderly succession of agency action or proceedings that leads to an administrative, binding decision (administrative act, rule or regulation). This conception of procedure draws its inspiration from the ­administrative activity of the liberal state in the nineteenth century based on a command and control system (‘police administration’). It is not useful, however, for explaining vast sectors of the modern welfare state, particularly the provision of personal services by public administration (Rodríguez de Santiago 2008, 207).

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Three generations of administrative procedures  303 those single and isolated procedural principles, components, or values that must be observed by public administrators as guidelines in order to make a decision when a quasi-judicial process or an organized set of stages are not specifically prescribed by administrative procedure acts (APAs).3 This means that administrative procedure does not always imply an orderly succession of actions through time.   Second, administrative procedure includes those rules to be applied when an administration is not making decisions, but rather performing evaluations, assessments, reports, inspections, monitoring, personal services provisions and the like.4 This means that administrative procedure covers not only decision-making vested with executive power, but also other relevant activities that must be carried out in accordance with certain procedural references, such as transparency, consultation, notice-and-comment, impartiality, or a duty to give reasons. B. By ‘generations of administrative procedure’, I mean a historical evolution of different systems of procedure. There are essentially three species of procedures, which arose sequentially, but now operate alongside one another. In other words, three generations of administrative procedures: the ‘grandparent’ (mainly adjudication and permit procedures according to a quasi-judicial scheme) preceded the ‘parent’ (rule-making under a legislative model) which was followed by the ‘child’ (a collaborative environment for administrative acts, rule-making and policy-making), which now all inhabit the same realm of public law. C. By ‘variable’ I mean a set of attributes or characteristics used to distinguish administrative procedures. The values of each variable fluctuate in accordance with the case in point. These variables will be described in the next section. 1.2  Seven Key Variables Administrative procedures are difficult to compare, not only because they differ around the world, but also within each state. For example, there are relevant differences between a strategic environmental impact assessment procedure and a sanction or permit procedure; between adjudication and rule-making. These different procedures correspond to different models of governance. This chapter proposes a methodology to classify the different types of administrative procedures in the light of their underlying method of governance. To do this, we must first organize them according to seven variables: A. Law-applying tool vs. law-creating tool. Here we distinguish between: procedures merely implementing or applying substantive law and more or less detailed statutes

3   For instance, Section 10 of German Administrative Procedure Act established: ‘The administrative procedure shall not be tied to specific forms when no legal provisions exist which specifically govern procedural form. It shall be carried out in an uncomplicated, appropriate and timely fashion’ (emphasis added). 4   In such cases, administrative procedure acts may provide a linear process. For example, according to the European strategic environment assessment procedure, which applies to a wide range of public plans and programs on land use, transport, energy, waste, agriculture, and so on, the responsible authority has to make an environmental report after notice and a consultation period, an assessment of reasonable alternatives, and other formalities.

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304  Comparative administrative law and rules (for example, licensing), on the one hand; and, on the other, procedures designed to introduce or to make new decisions on situations that have not been previously encountered or foreseen by statutes and regulations (for example, urban planning procedures). The former consist of components seeking to discover what the law has established (interpretation of the law, investigation of the facts, assessments and the like). They use a sort of judicial subsumption (for example, whether a sanction is applicable in a given situation). The latter, on the contrary, do not have substantive, definitive guidelines to be followed. Instead, public administrators are given enormous discretion. Procedure is here the forum wherein a solution must be developed (for example, what measures are to be taken against an epidemic). These procedures work as a policy steering mechanism, that is, they consist of procedural elements aiming to make decisions and policies without clear statutory substantive guidelines on what course to determine (for example, whether an integrated environmental authorization may be granted or not). Statutory provisions are not able to anticipate all possible realities, but they can establish how to deal with them. For this reason, procedures considered as law-making tools are of greater consequence. When administrative solutions are invented with the help of others (various administrations, the public, expertise, etc.), third-generation procedures are in place. B. Ex officio investigation vs. shared information process. Procedures in which the gathering and processing of information is mainly carried out by the administration itself (for example, an inquisitorial sanction procedure), are contrasted with those in which the information process is performed by competent administration in collaboration with other administrations or private parties such as the public, expertise groups and stakeholders (for example, procedures for the authorization and supervision of medicinal products for human and veterinary use in the European Union).5 In the first proceedings—based on a prevalence of inquisitorial rather than adversarial components—private parties do not control hearings and investigation, even though they have an opportunity to express their views of the issues and to provide evidence and relevant information. C. Autarchic administrative vs. heterarchical administrative process. Here procedures carried out by the competent authority alone in the main policy stages (priority setting, resource allocation, planning and drafting, final decision, implementation, enforcement, monitoring, evaluation and the like), are opposed to procedures in which others in addition to the responsible authority, whether state or non-state actors, participate in these steps in a process and operate in a collaborative mode, at least to some degree. An example of the first is an executive rule-making procedure conducted by an administration without external consultation. Examples of the latter are the procedural requirements under the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) regime in the European Union.6 5   See Regulation (EC) No  726/2004 of the European Parliament and of the Council of 31  March 2004 laying down Community procedures for the authorization and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency. 6   See Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/

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Three generations of administrative procedures  305 D. Procedural components applied mainly in the implementation and enforcement phases of a process vs. procedural requirements applied throughout all phases of policy-making. Procedures that are applied basically in the final implementation and enforcement stages of a policy-making cycle (for example, an order enacted in an enforcement procedure), can be differentiated from those procedural requirements applied during any phase of a policy cycle, and not necessarily on just the ‘end product’ (for example, ex ante regulatory impact assessment procedure; consultations on an earlier draft of regulation and the like). E. Procedures channeling public power vs. procedures channeling public values to be taken into account when actors do not exercise any executive power. This contrasts procedures by which executive power is exercised (for example, granting or revoking a building permit) from procedural requirements through which administrative authority is not exercised (for example, administrative procedures making soft law7) are the contrasting variables here. F. Procedures stressing protection of subjective legality vs. procedures that highlight making decisions for a better policy. The variable here distinguishes between pro­ cedures aiming to protect individual rights in their relations with administration (for example, a sanction or permit procedure), and procedures seeking to achieve the best decision available in a broader context of policy-making (for example, a strategic environmental assessment procedure). The first are ‘micro-procedures’, the latter ‘macro-procedures’, if we look at their main goal and environment: an individual right or general policy-making. G. Administrative procedures in a traditional sense vs. procedural principles adopted by private parties. Procedures conducted by public administrators and procedural principles adopted by private bodies8 when they perform regulatory tasks9 or public EC and repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/ EEC, 93/105/EC and 2000/21/EC, http://eur-lex.europa.eu/legal-content/en/TXT/PDF/?uri5CEL EX:02006R1907-20160203, accessed 22 September 2016. This regime is based on the principle of industry responsibility and thus, it imposes an informational burden on industry, in other words, it implements the ‘privatization’ of procedural investigation. It establishes guarantees of transparency in registration, electronic information exchange procedure, etc. It is geared toward a collab­ orative environment for all the actors involved: Member States, NGOs, the European Commission and others actors. The implementation period is as important as the decision-making period. Further explanation at: http://echa.europa.eu/regulations/reach/understanding-reach, accessed 22 September 2016. 7   E.g., procedures followed by non-state actors such as private companies owned by governments applying public procurement principles—such as publicity, transparency, giving reason, and so forth—in order to assure free competition; or decisions made by private parties, such as the Internet Corporation for Assigned Names and Numbers (ICANN), whose bylaws in themselves are a sort of administrative procedure act. 8   By ‘private actors’ I mean not only administrative entities acting under private law (for example, state-owned enterprises providing public services), but also non-state actors carrying out commercial activities affected by a public interest (such as energy or telecommunications in many countries), or performing regulatory activities (such as standard-settings, assessments, certifications, accreditations and the like). 9   For example, procedural principles governing the ICANN and International Organization for Standardization decision-making processes.

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306  Comparative administrative law services,10 that is, when they carry out ‘administrative’ activities, in that they affect members of the public to a significant degree.

2.  THREE GENERATIONS OF PROCEDURES This chapter identifies three ‘models’ in common use around the world that involve different combinations of these variables. Given the fact that these models have evolved over time, they are here called ‘generations’ of administrative procedures. However, they now operate alongside one another. The historical evolution of administrative procedure falls into three phases. The first, beginning in the nineteenth century, was the development of procedural requirements for agency decision-making, administrative review and mechanisms of dispute resolution to prevent unlawful or arbitrary administrative action and to safeguard citizen rights. The second phase took hold in some countries during the 1950s and 1960s. The emergence of rulemaking procedures in that period was mostly timid, with the notable exception of the much more sophisticated US Administrative Procedure Act of 1946, which was conceived to regulate the panoply of administrative bodies established during the New Deal. The third phase has been a still tentative response to global-wide governance, public-private cooperation and dynamic administrative processes that fall between law-making and implementation. Today’s administration makes individual decisions, adjudicates, makes rules and regulations, and develops innovative and far-reaching public policies in complex situations, such as those of the public-private and inter-agency collaborations within and beyond national-state boundaries. This new and most recent generation encompasses public policy-making and the use of procedural arrangements derived from currently evolving methods of governance. Of course, there is no single, rigid method for policy-making and implementation, even less so one set procedure for each and every policy. On the contrary, this environment is inhabited by a multitude of procedural rules or components that accomplish a wide range of purposes. 2.1  Combinations Variables Give in the Three Generations The generations embody the different ways that a given legal system shuffles the seven variables described in section 1.2 when structuring administrative procedures. In accordance with this view, three generations of administrative procedures can be distinguished in the following way:

10   Non-state actors providing services of economic general interest (telecommunication, energy, water, etc.) may be required to express public values by means of procedural arrangements, such as operating under due process and fairness requirements. They also may apply public procurement rules, proportionality principle, non-discrimination principle and the like.

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Three generations of administrative procedures  307 2.1.1  The first generation This consists of procedures for making individual decisions (whether an initial decision or an administrative reconsideration). Most of the APAs around the world fall to some extent into this generation. It concerns ‘administrative acts,’ meaning decisions vested with executive power or authority, where information gathering and processing is mostly carried out by the administration itself. This kind of procedure works as a law-applying tool that resembles a judicial proceeding. It is the standard procedure for initial decisions that are made according to previous substantive criteria established in the law, and for adjudication. These procedures are seen as a defense mechanism against incidental abuses of power and arbitrary action in an environment where those decisions may seriously affect individual rights. They also help to determine and discover what the law has established. In sum: first-generation procedures are mostly based on law-applying mechanisms and on ex officio investigation principles; they are found in implementation and enforcement stages; they follow an autarchic administrative process and aim to channel public powers and to safeguard individual rights. Quasi-judicial design is its most distinctive feature. 2.1.2  The second generation This generation is about rule-making within traditional ministerial, administrative, or ‘command and control’ governance. It does not apply broad notice and comment mech­ anisms for rule-making as the US APA does. On the contrary, it employs informationgathering processes for rule-making with limited participation and consultation, without a deep dialogue between affected parties and stakeholders. The rule-making procedure is based mainly on information provided by the responsible authority (for example, an executive regulation made through hierarchical administrative procedure implementing statutes, or an executive or presidential order). Therefore, second-generation procedures are based on norm-generating mechanisms in a context where the gathering and processing of information is largely carried out by the administration itself. They follow  a  ­centralized,  top-down regulatory process, and in a broader sense, implement legislation. These procedures arguably resemble legislative decision-making. However, given the fact that there are very few procedural rules that govern legislatures, to a great extent they are also based on the principles that govern courts (Rubin 2003, 95). Participation rights in rule-making procedures thus often follow the same values and principles present in judicial review: the right to be heard, due process, and the rule of law. In other words, participation in rule-making is here viewed as a defensive mechanism, not as a collaborative dialogue between citizen and agencies. These procedures may also encompass the preparation of laws,11 but the bulk of administrative law pertains to rules and regulations that are usually based on previous statutes. Notice and comment requirements in this generation used to be very simple. Second-generation rule-making procedures generally are not closely regulated by statute, and courts do not intervene very actively to create extra-statutory public

11   Sometimes tools in place focus on the production of primary regulations. See, for example, OECD 2009, 46.

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308  Comparative administrative law ­participation requirements.12 The mainly classically-oriented procedures of this second generation do not take into account many contemporary developments, such as soft law or negotiated rule-making. Quasi-legislative style is their most distinctive characteristic. 2.1.3  The third generation Third-generation procedures take place in a context of networked policy-making, which involves a greater variety of actors and voices. The third generation is based on procedural collaboration between administrations and/or private parties aiming not only to make individual decisions and regulations, but also to enable participation in different stages (for example, regulatory impact assessments or environmental permit procedures13). Rules and decisions to be made are not defined in the law, but rather invented or created within the procedures. Third-generation procedures are law- or decision-making tools, as well as participatory mechanisms taking place not only in situations where administrative acts and regulations have to be made in absence of substantive guidance, but also in other phases of policy-making such as agenda-setting, prior drafts, assessments, monitoring and the like. Procedural principles adopted by private parties performing public services or participating in the regulatory cascade belong to this generation.14 Third-generation procedures cover not only the exercise of administrative authority, but also the promotion of public values to be taken into account by private parties.15 Collaborative administrative governance is their most idiosyncratic attribute. Third-generation procedures operate in a new, non-hierarchical and decentralized en­vironment that values public-private and inter-agency cooperation, national-supranational governance, and administrative processes designed to create the best solution rather than find it in a previously enacted statute. For the most part, they do not aim to control, but rather to steer public and private actors. The third-generation procedure is a new hybrid that responds to the changing needs of new modes of governance. A wide range of policy innovations seeks to create more effective forms of participation, coordinate multiple levels of government, allow for more diversity and decentralization, foster deliberative arenas, mutual learning and information gathering, and permit more flexibility, monitoring and revisability. Procedural rules are deeply involved in policy design and implementation: from simplification of pro­ cedures to ongoing information exchange between agencies at national, supranational, and global levels; from assessing public policy options to monitoring and reviewing decisions, programs, plans, or standards that are never definitive given the dynamic nature of some policy-making. In the framework of new governance models, policy-making and implementation rely on new procedural components much more than the traditional command-and-control regulation does, given that those regulatory processes are much more complex, involve a variety of public and private actors and levels of government,   Something very similar occurred in the nations of Northeast Asia. Ohnesorge 2006, 121.   These procedures must be fully coordinated where more than one competent authority is involved, in order to guarantee an effective integrated approach by all authorities competent for this procedure. See for example Article 7 of the European Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control. 14   See above section 1.2. 15   E.g., ICANN, ISO, credit rating agencies, and the like. 12 13

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Three generations of administrative procedures  309 and are aimed at setting out substantive standards. Regulatory cooperation has exhibited a notable impetus towards proceduralization (Coglianese 2002, 1112; Zaring 2005, 578). *** Though many of these layers may overlap or combine, I propose this typology to facilitate further inquiry. This classification may be of use in figuring out whether a given administrative procedure should be designed according to the patterns of one generation or another. For example, town-planning procedures, considered in many European countries as second-generation procedures, could be designed as a third-generation procedure. Likewise, administrative leeway in the absence of substantive statutory guidance should be, as a matter of principle, balanced with more participation and collaboration. On the other hand, some procedural interests most naturally belong to a certain generation, such as individual rights that require the application of the quasi-judicial system of the first-generation (for example, sanction procedures, administrative consideration, inspections, revoking a permit and so forth). In such cases, the taxonomy is helpful in assessing whether an APA has established appropriate principles and procedural rights for the type of procedure addressed, and if not, to promote more suitable ones. In any case, all three generations are needed to fulfill the goals and meet the needs of modern administrative systems. 2.2  Classification Based on Mode of Governance, not Outcome While particular outcomes may be associated with different generations, the classification does not turn on the kind of outcome produced. The typical outcome of first-generation procedures is an individual decision (‘administrative act’), which primarily has an impact on individual rights (for example, approval of license, a sanction, an adjudication), and therefore is made according to a quasi-judicial scheme. The characteristic outcome of second-generation procedures, on the other hand, is usually an executive rule, planning or regulation, made by administration or government in a hierarchical way and without broad consultation (e.g., executive order, regulation implementing statutes within a ministerial administration). In these cases, administrative procedures are conducted by the administration according to a conventional method of regulation, administration and adjudication (‘command and control’). It consists of substantive laws that program and steer administrative action. Procedures are merely tools to ensure a better application of the law (first generation) or to perform or implement the law throughout rules (second generation), as part of a centralized, top-down regulatory process. The outcomes of third-generation procedures, by contrast, are quite heterogeneous: they channel not only individual decisions, rules and regulations, but also evaluations, assessments, consultations, certifications, monitoring, and the like. However, their most characteristic feature is that they are based on collaborative governance. Collaboration focuses on bringing together and engaging critical stakeholders and administrations at a national and transnational level. Inter-agency and public-private collaboration is intended not only to improve participatory legitimacy (given the fact that the competent administration has a relevant discretionary leeway), but also to obtain more in-depth information from all the relevant actors, and to let them participate in the regulatory cascade, thereby improving the efficacy and relevance of the regulations established. In many cases, administrative authorities cannot make decisions in a vacuum, because they need external

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310  Comparative administrative law input from other authorities or private sector entities. The former need the knowledge and cooperation of the latter. The most distinctive character of this third generation is defined not by control of the administrative process, but by this necessary collaboration. The underlying model of administration is not that of an autarchical and hierarchical one, but rather one working in synchronization with other administrations, within and without the national boundaries, and with the private sector. Third-generation procedures are becoming increasingly relevant. First and second generations of administrative procedures correspond to the simple, traditional, top-down understandings of executive power. The third generation, on the contrary, corresponds with a contemporary environment of governance, a new broader policy model. It is not, however, a zero-sum paradigm. Traditional and new models coexist and combine in many ways in a given policy. For instance, a policy implementation can rely on both cooperative compliance and coercive enforcement. The shift to new modes of governance ‘is the shift to a broader spectrum of public interventions, including both sanctioned and semivoluntary reforms’ (Lobel 2004). 2.3  Relationship of each Generation to Law and Different Functions of Procedures This classification enables us to establish a common framework to compare a wide variety of procedures, to broaden our understanding of new administrative procedures, to promote the exchange of experiences, and to evaluate, foster, and guide legal reform. Each of these generations requires a different analytical approach and diverse legal principles and regulations, because the role and function of administrative procedure change dramatically in each generation. Ultimately, it will be the content rather than the formal classification that determines the choice of procedural arrangements needed. Nevertheless, these three categories would serve to provide guidance in determining the most appropriate path to take in any given situation. 2.3.1  The relationship of administration to law in each generation In the first generation, administration is the ‘mouth of the law’, and procedure is merely a tool to find what the law has previously established and to guarantee citizen rights while applying it. The procedure is a tool that helps to implement, adjudicate and enforce the law. First-generation procedures are derived from an essentially judicial concept of governance, in which laws are applied or interpreted rather than invented. Second-generation procedures are theoretically conducted according to a legislative model.16 In both cases, policy-making is always incremental, making progress by steps or degrees. The first and second generations respond to a classical model of governance, in which agencies or administrations conduct official business according to established rules, within a defined jurisdiction, and for predetermined instrumental purposes. Third-generation administrative procedures, on the other hand, are a means to search in a collaborative way for new solutions—to develop new decisions and rules, and to perform some relevant activities—where administration is given enormous discretionary leeway.17

16 17

  See table in Barnes 2010, ‘Three generations of administrative procedures.’  Ibid.

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Three generations of administrative procedures  311 From the point of view of the final ‘product’ of each kind of procedure (administrative acts, rules, regulations, and other ‘non-decisional’ activities), first-generation procedures are not significantly innovative. They are about interpreting or applying the law. Secondgeneration procedures (rule-making) might be more creative, but remain a part of a centralized, top-down regulatory process. The function and the role of the procedure involved are here very different. The law’s function in the third generation consists of providing rules on procedures to be followed rather than directly prescribing substantive behavior, or at most, leaving considerable leeway to the agency action and to private actors performing certain tasks.18 The procedure itself is given the role of a solution-finding and norm-generating mechanism. The concept, the principles, and the regulations of third-generation pro­cedures must be seen from an entirely different point of view from that traditionally espoused. 2.3.2  Defensive function vs. collaborative function In the first and second generation, defensive procedural components (such as due process, giving reason, transparency, participation, proofs, and the like) play a main role in protection of the substantive rights at stake. First-generation procedures are mainly conceived as a defense for individual rights against government acts, nominally on behalf of collective interests. Second-generation procedures, by contrast, are understood largely as a defense for ‘collective rights’ (e.g., environmental, safe working, housing, or educational issues) affected by regulations. In third-generation procedures, this preventive dynamic does not play an essential role. On the contrary, here the main concern is about how to work together in order to find out an appropriate solution for unresolved problems.19 The three generations of procedures may have in common the same or analogous procedural requirements, such as transparency, proportionality, reason giving, sharing of information, participation and the like. However, differences lie not only in proportion or import­ ance of these requirements within each generation, but also in the function pursued: defensive in the first and second generation, collaborative in the last one in the search for better solutions in policy-making. Each procedural requirement, principle or component must be adapted within each generation in order to perform its own function.

3.  SOME SAMPLES OF THE THREE GENERATIONS 3.1  First-generation Procedures First-generation procedures aim at making individual decisions, such as, for example, authorizations, permits, licenses, public procurements, orders, prohibitions, sanctions,

18   Such is the case of European environmental law: it is mainly about procedures rather than prescribing substantive behavior or solutions (e.g., environmental assessment, environmental permit procedures and so forth). 19   Another example: in flight safety and volcanic ash issues, coordination of the response to a volcanic event is needed. There are many public agencies and private contributors to the overall volcanic risk mitigation system. Cooperation in supplying states, operators and aerospace industries associations with the information necessary to support the pre-flight process and the in-flight and post-flight decision-making process is essential to continuing safe operations. See ICAO 2012.

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312  Comparative administrative law adjudications or dispute resolutions.20 They seek to guarantee citizens’ rights and to assure a proper application and enforcement of the law. Most of today’s administrative procedure statutes still belong to this generation. They arise from a traditional administration and regulatory model. The basic structure of first-generation procedures has remained relatively unchanged since their beginning in the nineteenth century. Future developments of this generation cover procedural rules that govern not only decisions, but also non-decisional activities under the same traditional scheme (Barnes 2010, 346–8). Historical reasons aside this generation is most appropriate when a citizen’s right is affected and the decision must be found within the confines of the enacted law. This explains why these statutory provisions follow a typical judicial pattern: proceedings initiated ex officio or by interested parties, investigation and probatory phases, hearings, resolution, and enforcement (Barnes 2006, 275–8, 297–8). 3.2  Second-generation Procedures As noted, the second generation of administrative procedure concerns rule-making approved by ministerial administrations or made according to ‘command and control’ governance, as part of a centralized top-down regulatory process. Thus, this model for rule-making is not based on a wide vision of cooperation between agencies, regulated parties, and the public.21 Executive orders and regulations, secondary legislation implementing statutes, or town-planning procedures, among others, belong to this generation, when they are made under such a scheme. The hearing of citizens directly, or through organizations and associations recognized by law, is guaranteed in the process of drawing up the administrative rules which will affect them.22 ‘Collective rights’ are often assured through the participation of representative associations affected by the proposed regulation. Participation does not usually take place in the preliminary drafting stages of the process. Generally speaking, rule-making procedures have played a modest role in many countries in the twentieth century. First, because traditional administrative law systems usually established very few, if any, procedural requirements for rule-making and, second, because in most parliamentary systems, typical rules and regulations aim to implement in detail statutes containing certain substantive standards which have been previously enacted by Parliament (‘executive regulation’ of law). Indeed, when executive regulations are not made by administrations with significant discretionary leeway, rule-making procedures tend to belong to the second generation. There are many new approaches to rule-making that place more emphasis on more widespread participation or collaboration (Zaring 2006, 295). In fact, in the last two decades there has been a remarkable trend toward greater participation in rule-making by stakeholders, public, experts and other administrations. As a matter of fact, various 20   Most of the old and new procedures belong to this generation. For example, procedure for the issuance of the European Professional Card (Commission Implementing Regulation (EU) 2015/983 of 24 June 2015); procedures for granting subsidies, public employment and procedures for public examinations, etc. 21   Because of its advanced outlook, the US APA could easily be categorized in the third generation and not the second. Regarding the development of the US APA. See Grisinger 2008. 22   For example, Article 105 of Spanish Constitution.

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Three generations of administrative procedures  313 constitutions,23 statutes,24 or European directives25 now often impose new procedural requirements for making regulations and proposals of acts. This can produce grey areas between the second generation and the third. The deciding factor that determines the passage from one to the next is the model of governance and administration on which rule-making is mainly based. 3.3  Third-generation Procedures This generation covers not only decisions and regulations made in a collaborative way, but also other cooperative activities in different stages of a given policy-making cycle. 3.3.1  Individual-decision procedures Examples of third-generation individual-decision procedures are ‘competitive dialogue’ procedures and ‘competitive procedures with negotiation’ in the framework of European public procurement.26 As expressed, among other examples, in the recitals 42 of the European Union 2014 Public Procurement Directive: [t]here is a great need for contracting authorities to have additional flexibility to choose a procurement procedure, which provides for negotiations. . ..Member States should be able to provide for the use of the competitive procedure with negotiation or the competitive dialogue, in various situations where open or restricted procedures without negotiations are not likely to lead to satisfactory procurement outcomes. . . It has shown itself to be of use in cases where contracting authorities are unable to define the means of satisfying their needs or of assessing what the market can offer in terms of technical, financial or legal solutions. This situation may arise in particular with innovative projects, the implementation of major integrated transport infrastructure projects, large computer networks or projects involving complex and structured financing. Where relevant, contracting authorities should be encouraged to appoint a project leader to ensure good cooperation between the economic operators and the contracting authority during the award procedure.27

For that collaborative purpose, Member States shall provide that contracting author­ ities may apply a competitive procedure with negotiation or a competitive dialogue with regard to work, supplies, or services fulfilling one or more of the following criteria: the needs of the contracting authority cannot be met without adaptation of readily available solutions; the contracting authority requires design or innovative solutions; the contract cannot be awarded without prior negotiations because of specific circumstances related to the nature, the complexity, or the legal and financial make-up of the project, or because of the risks attaching to them; the technical specifications cannot be established with sufficient precision by the contracting authority with reference to a standard.28   For example, Article 39 of French Constitution; Article 105 of Spanish Constitution.   For example, Spanish APAs of 1958, 50/1997, 39/2015. 25   For example, Article 4 of Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programs on the en­vironment, according to which the strategic environmental assessment shall be carried out during the preparation of a plan or program and before its adoption or submission to the legislative procedure. 26   European Directive 2004/18/EC. 27   See also recitals 42–44, 49, and Articles 26.4, 29–31 of the Directive (emphasis added). 28   See Article 26.4 of the Directive. 23 24

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314  Comparative administrative law Some third-generation procedures also apply to individual decisions as a substitute for older first-generation processes. For instance, the EU has simplified administrative procedures and formalities that are required of service providers. The EU Services Directive of 2006 aims to achieve a genuine internal market in Europe by facilitating the cross-border provision of a wide range of services, meaning cases in which a business wants to supply services across the borders in another Member State, without setting up an establishment there.29 To meet its goal, the Directive obliges Member States to review and evaluate all their authorization schemes concerning access to, or exercise of a service activity, and abolish them or replace them by less restrictive means (such as simple declarations), where they are unnecessary or otherwise disproportionate (Articles 5 and 15.3). To compensate for the ‘liberalization’ and simplification of domestic controls, the Directive will strengthen soft law documents, self-regulation, information-gathering and processing carried out by private parties, information regulation, and a sophisticated inter-agency partnership across Europe.30 Procedures embedded in industrial emissions policies, such as those granting permits under the European integrated pollution prevention and control system constitute another example.31 Integrated pollution prevention and control concern new or existing industrial and agricultural activities with a high pollution potential.32 Among other procedural arrangements,33 directives establish a consultation procedure that ensures that the public has a right to participate in the decision-making process and be informed of its consequences, by having access to permit applications in order to give opinions, results of the monitoring of releases and the like. The decision to permit or reject a project must be made public and sent to the other Member States concerned. Environmental impact assessment procedures undertaken for individual projects such as dams, motorways, airports or factories are yet another example.34 Procedural rules determine the information required from the developer, the breadth of public and gov-

29  See Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market. 30   In order to function properly, administrative cooperation relies on a direct and fast communication system between the competent authorities of different Member States. See European Commission, Handbook on Implementation of the Services Directive, http://ec.europa.eu/inter​ nal_market/services/services-dir/proposal_en.htm#handbook, accessed 22 September 2016. 31   See Directive 2008/1/EC of the European Parliament and of the Council of 15 January 2008 concerning integrated pollution prevention and control. 32   The integrated approach means that the permits must take into account the whole en­vironmental performance of the plant, covering, for example: emissions to air, water, and land; generation of waste; use of raw materials; energy efficiency; noise; prevention of accidents; and restoration of sites upon closure. 33   Procedures for exchange of information on best available techniques (serving as a basis for emission limit values) are held regularly between the Commission, the Member States and the industries concerned. 34   The Environmental Impact Assessment (EIA) procedure ensures that environmental consequences of projects are identified and assessed before authorization is given. The public can give its opinion and all results are taken into account in the authorization procedure of the project. The public is informed of the decision afterwards. See Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (EIA Directive).

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Three generations of administrative procedures  315 ernment participation, the administrative duties to be taken into consideration in the development of compliance procedures, the results of consultations and the information gathered.35 A very different case is what we might call ‘private’ as opposed to ‘administrative’ procedures: the procedural rules to be followed by private entities carrying out essentially public duties.36 The issue here is not only to extend procedural controls to private actors when, for instance, they adjudicate claims or make individual decisions,37 provide services of economic general interest, or participate in the regulatory cascade (Barnes 2015a; 2015b), but also to set out positive guidance for non-government actors, as some private risk management procedures do.38 3.3.2  Rule-making procedures Examples of third-generation rule-making procedures could include all kinds of rules and regulations made by agencies based on the collaborative governance model: procedures to make soft law (Mendelson 2007), such as the European Aviation Safety Agency rule-making process;39 private procedures governing standard-setting by private bodies;40 and deliberative procedures of global governance41 such as the International Accounting Standards Board. Negotiated rule-making may be included in this generation given that representatives from a government agency and affected interest groups cooperate and negotiate the terms of a proposed administrative rule. Thus, it is based on a collaborative procedure.   EIA Directive, Arts 3–8.   See Aman 1999, 416:

35 36

A separate procedural provision designed for private actors could be crafted, one which not only emphasizes flexibility, but public involvement and the basic public law protections of notice, participation, transparency, and some forms of accountability. Indeed, creative disclosure requirements designed to inform the public just how certain markets work would also further these goals. 37   For example, Article III (Transparency), Section 1 of the Bylaws for ICANN, a California Nonprofit Public-Benefit Corporation (as amended 30 September 2009), establishes that ICANN shall operate to the maximum extent feasible in an open and transparent manner and consistent with procedures designed to ensure fairness. According to Article I, Section 2, it will make decisions by applying documented policies neutrally and objectively, with integrity and fairness. 38   See, for example, Articles 22 and 23 of the Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast). See also Article 43 (risk management) of the Proposal for a Directive of the European Parliament and of the Council on the Taking-up and Pursuit of the Business of Insurance and Reinsurance Solvency II (7 October 2007). 39   The Agency’s Rulemaking Directorate contributes to the production of all EU legislation and implementation material related to the regulation of civil aviation safety and environmental compatibility. See also Strauss 2006, 685. 40   For instance, in the EU, procedures for private/public mechanisms of law-generation are ‘an alternative approach to legislation’. For co-regulation and self-regulation, the Inter-institutional Agreement on Better Law-making provides agreed definitions, criteria and procedures (Official Journal C321 of 31.12.2003). The principles governing the conditions of use for alternative instruments such as co-regulation and self-regulation are transparency and representativeness (Art 17). 41   Kingsbury and Stewart, 2016, 169, 315, 323; Barnes, 2016.

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316  Comparative administrative law The standard rules of procedure for committees of the European Union also belong to this generation.42 Committees assist the European Commission in executing its implementing powers by giving an opinion on draft implementing measures before they are adopted. They include representatives from all EU Member States and are chaired by a Commission official. Committees are set up on the basis of regulations, directives or decisions by the EU legislator (‘basic legal acts’) to assist the Commission in exercising its implementing powers.43 3.3.3 Procedural arrangements that directly respond to the needs arising from new modes of governance The universe of administrative action does not divide into two general decision-making categories—rule-making and individual decisions—as one might be led to deduce from APAs. There are many other things to be done. Third-generation procedures thus not only aim to make individual decisions or regulations, but also to resolve policy issues deriving from new collaborative modes of governance, such as: information gathering and exchange; deliberation among actors; preliminary agenda-setting consultations; cooperative processes between regulators, such as supervisory cooperation facilitating the convergence of outcomes and providing informal guidance on implementation issues; monitoring and review; transparency policy; periodical reconsideration and updating of policy choices or permit conditions; the identification at an early stage of unforeseen adverse effects of the implementation of plans and programs; and assessing the potential impacts of policy options (for example see Barnes 2010, 353). These processes are not necessarily decisional in nature, in that they do not focus on the outcome but on the process itself. Most of these processes are based on singular procedural components that operate in a given stage of the policy cycle: problem identification (or agenda setting), policy formulation, adoption, implementation, or evaluation. Regulatory impact assessment procedures, for example, belong also to this generation, often used in the pre-legislative scrutiny of the legislation (ex ante evaluations) and also to examine the effects of regulations that are currently in force (ex post assessments). It is a method of policy analysis, which is intended to assist policy-makers in the design, implementation and monitoring of improvements to regulatory systems, by providing cooperation between administrations, public, expertise, and stakeholders (Auby and Perroud 2013, 13–41).

42   See (2011/C 206/06), Official Journal of the European Union C 206/11, 12.7.2011. See also Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers. 43   The ‘basic legal act’ defines the content and scope of the implementing powers and determines the type of comitology procedure to be applied in each case. Each committee adopts its own rules of procedure based on the standard rules of procedure adopted by the Commission.

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Three generations of administrative procedures  317

4.  FINAL REMARKS The growing impetus towards proceduralization in an uncertain world, given the weakness of substantive legislation in so many fields, brings about a subsequently increasing role of third-generation administrative procedures, where rules, activities, and solutions are to be created through wide-ranging collaboration. Among other consequences, the observance of the legal requirements in third-generation procedures may become much more important than in other generations in that the statute here, instead of deciding what to do in every situation, has established how to proceed to make decisions or to perform other activities, that is, it has deferred to the procedure itself to determine the solution to be met.

ACKNOWLEDGEMENTS The author would like to thank Blake Emerson and William Saindon Henley for their comments and suggestions on this chapter.

REFERENCES Aman, A.C., Jr. (1999), ‘Proposals for Reforming the Administrative Procedure Act: Globalization, Democracy and the Furtherance of a Global Public Interest,’ Indiana Journal of Global Legal Studies, 6, 397–420. Auby, J.B. and T. Perroud (2013), ‘Introduction,’ in Jean-Bernard Auby and Thomas Perroud (eds), Regulatory Impact Assessment, Seville: Global Law Press. Barnes, J. (2006), ‘Sobre el Procedimiento administrativo: evolución y perspectivas,’ in Javier Barnes (ed.), Innovación y Reforma en el Derecho Administrativo, Seville: Global Law Press, pp. 263–341. Barnes, J. (2008), ‘Reform and Innovation of Administrative Procedure,’ in Javier Barnes (ed.), Transforming Administrative Procedure. Seville: Global Law Press, pp. 13–41. Barnes, J. (2010), ‘Towards a Third Generation of Administrative Procedure,’ in Susan Rose-Ackerman and Peter L. Lindseth (eds), Comparative Administrative Law, 1st ed., Cheltenham, UK and Northampton, MA: Edward Elgar. Barnes, J. (2015a), ‘New Frontiers of Administrative Law: A Functional and Multi-Disciplinary Approach. Private Life of Administration – Public Life of Private Actors,’ in Hermann-Joseph Blanke, Pedo Cruz Villalón, Tonio Klein and Jaques Ziller (eds), Common European Legal Thinking (Essay in Honour of Albrecht Weber), Springer: Heidelberg, pp. 563–88. Barnes, J. (2015b), ‘Die Übertragung öffentlich-rechtilicher Werte auf private Akteure auf der Grundlage von Organisation und Verfahren,’ in Maria Mercè Darnaculleta i Gardella et al. (eds), Strategien der Rechts im Angesich von Ungewissheit und Globalisierung, Baden-Baden: Nomos, pp. 323–65. Barnes, J. (ed.) (2015c), Transforming Administrative Procedure, 2nd ed., Seville: Global Law Press. Barnes, J. (2016), ‘El Derecho Administrativo Global y el Derecho Administrativo nacional, dos dimensiones científicas hoy inseparables,’ in Kingsbury and Stewart, Hacia el Derecho Administrativo Global, Seville: Global Law Press, pp. 21–43. Coglianese, C. (2002), ‘Empirical Analysis and Administrative Law,’ University of Illinois Law Review, 1111–38. Grisinger, J. (2008), ‘Law in Action: The Attorney General’s Committee on Administrative Procedure,’ The Journal of Policy History, 20, 379–418. Kingsbury, B., and Stewart, R.B. (2016), Hacia el Derecho Administrativo Global: fundamentos, principios y ámbito de aplicación, Seville: Global Law Press. ICAO [International Civil Aviation Organization] (2012), “Flight Safety and Volcanic Ash. Risk Mangement of Flight Operations with Known or Forecast Volcanic Ash Contamination”, http://www.icao.int/publications/ Documents/9974_en.pdf, accessed 22 September 2016. Lobel, O. (2004), ‘The Renew Deal: The Fall of Regulation and the Rise of Governance in Contemporary Legal Thought,’ Minnesota Law Review 89, 342.

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318  Comparative administrative law Mendelson, N.A. (2007), ‘Regulatory Beneficiaries and Informal Agency Policymaking,’ Cornell Law Review, 92, 397–52. OECD [Organization for Economic Cooperation and Development] (2009), Better Regulation in Europe: An Assessment of Regulatory Capacity in 15 Member States of the European Union. Better Regulation in Denmark, www.oecd.org/dataoecd/16/46/43325733.pdf, accessed 22 September 2016. Ohnesorge, J. (2006), ‘Chinese Administrative Law in the Northeast Asian Mirror,’ Transnational Law and Contemporary Problems, 16, 103–64. Rodríguez de Santiago, J.M. (2008), ‘Towards a New Concept of Administrative Procedure: The Provision of Health Services,’ in Javier Barnes (ed.), Transforming Administrative Procedure, Seville: Global Law Press, pp. 203–25. Rubin, E. (2003), ‘It’s Time to Make the Administrative Procedure Act Administrative,’ Cornell Law Review, 89: 95–190. Strauss, P.L. (2006), ‘Rulemaking in the Ages of Globalization and Information: What America can Learn from Europe and Vice Versa,’ Columbia Journal of European Law, 12: 645–94. Zaring, D. (2005), ‘Informal Procedure, Hard and Soft, in International Administration,’ Chicago Journal of International Law 5, 547–604. Zaring, D. (2006), ‘Best Practices,’ New York University Law Review 81, 294–350.

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19.  Administrative agencies as creators of administrative law norms: evidence from the UK, France and Sweden Dorit Rubinstein Reiss

Administrative agencies are central sources of administrative law norms. Agencies are not just the recipients of legal norms; they are also important, sophisticated actors that create norms that are later accepted and adopted by other actors. To illustrate this claim, this chapter focuses on an important comparative case: the development of norms of transparency and consultation by the agencies regulating telecommunications and electricity in England, France and Sweden.1 These norms bear some resemblance to notice and comment rulemaking procedures under the United States’ Administrative Procedures Act,2 but with a national flavor that supports Dominique Custos’s discussion of Americanization in Chapter 17 of this volume.

1.  THEORETICAL BACKGROUND The copious literature on administrative procedures and their effects generally treats agencies as subject to procedures, that is, as recipients and not actors in setting the administrative law norms that apply to them (e.g. Galligan 1996, Lubbers 2008). Political scientists make the same assumption: they treat procedures as something imposed on agencies, not something agencies help to develop (e.g. McCubbins et al. 1987, Moe 1989, Majone 1999, Spence 1999). American studies that treat agencies as independent actors in relation to their regulatory framework tend to focus on agencies’ violations of administrative law norms (Halliday 2004, Hickman 2007, Noah 2008), or on choices between preexisting ­frameworks – for example, choosing between rulemaking and adjudication (Citron 2008). In contrast, public administration scholars know full well that agencies and bureaucrats play an important role in determining the statutes under which they make policy (Aberbach and Rockman 1988, Wilson 1989, Peters 1997). For example, in his thorough historical study, Daniel Carpenter (2001) demonstrated how certain administrative agencies achieved the passage of legislation that they preferred, occasionally against

1   The discussion in this chapter draws on semi-­structured qualitative interviews conducted with over 100 actors in England, France and Sweden between September 2004 and February 2005. The interviewees included agency officials, government officials, industry members and consumer representatives. The full description of the findings in relation to network price setting can be found in chapter 4 of my dissertation, Rubinstein (2007: 348). 2   Administrative Procedures Act, 5 USC §553.

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320  Comparative administrative law Congressional reluctance. Even so, these scholars do not focus on administrative law norms as one of the things that agencies create. But there is a long history of agencies creating administrative law norms on their own – either de facto, by simply adopting certain procedures and sticking with them until devi­ ation would be unthinkable and/or attacked by the courts, or de jure, by helping to enact rules that mandate the procedures they want. A few studies have studied this phenomenon. In England, a small group of scholars has documented the ways agencies adopted procedures that increased their transparency and gave voice to stakeholders (Prosser 1997, Graham 2000). In one comparative study of British, French, German and Italian regulators, Mark Thatcher found, among other things, that the agencies adopted pro­ cedural norms that significantly altered their decision-­making activities (Thatcher 2002). Similarly, in a recent article from the United States, Elizabeth Magill pointed to agencies’ ‘self regulation’ and suggested a tentative explanation for why they might explicitly bind themselves to follow certain procedures (Magill 2009). My study contributes to this literature by demonstrating the ways in which six ­agencies – the regulators of telecommunications and electricity in England, France and Sweden – adopted norms of transparency and consultation in setting prices, and by addressing the reasons behind the agencies’ adoption of such norms. It is thus comparative in two senses: across countries, and across sectors.

2.  THE CASE STUDY As part of the telecommunications package enacted in 2002,3 the European Union adopted norms of transparency and consultation for the National Regulatory Authorities (NRA); Article 6 of the Framework Directive reads: . . . Member States shall ensure that where national regulatory authorities intend to take measures in accordance with this Directive or the Specific Directives which have a significant impact on the relevant market, they give interested parties the opportunity to comment on the draft measure within a reasonable period. National regulatory authorities shall publish their national

3   Including Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) OJ L 108, 24.4.2002: 33; Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) OJ L 108, 24.4.2002: 51; Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) OJ L 108, 24.4.2002: 21; Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) OJ L 108, 24.4.2002: 7; Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) OJ L 201, 31.7.2002, 37–47 and Decision No. 676/2002/EC of the European Parliament and of the Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision). OJ L 108, 24.4.2002: 1. The direct­ ive came into force on July 25, 2003 – Article 28, the Framework Directive.

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Administrative agencies as creators of administrative law norms  321 consultation procedures. Member States shall ensure the establishment of a single information point through which all current consultations can be accessed. The results of the consultation procedure shall be made publicly available by the national regulatory authority, except in the case of confidential information in accordance with Community and national law on business confidentiality.

Interestingly, this article was a codification of practices that some telecommunications regulators had already adopted and were using routinely. The next sections will describe how regulators implemented such practices with regard to one issue – the control of network prices. Utility prices in both the communication and electricity sectors include retail prices, wholesale prices, and network prices (i.e. charges for use of the network). Although other prices were deregulated and left to the market as competition increased, in all three countries examined – and elsewhere – network prices remain regulated, and an end to regulation is not anticipated, the rationale being that networks are a natural monopoly or, at least, a natural oligopoly. Controlling network prices was a core concern of sectoral regulators, but two characteristics of network pricing made decision-­making challenging, especially in a politically charged environment. First, network pricing requires substantial expertise. Under the regulatory framework, prices had to be based on costs, and evaluating the costs meant understanding the technical aspects of the network in order to assess the legitimacy of the owners’ claims. All agencies used complex formulas or complex computerized models to set or evaluate the prices. This made the process appear opaque and did nothing to dispel concerns of capture. Second, network pricing is frequently contested. It involves high stakes: due to the volume of traffic passing over a network, a 1-­cent difference in the network price could substantially affect a company’s profits or losses. Therefore, most operators were ready and willing to fight any disadvantageous decision regarding network prices. Incumbents were anxious to protect their existing market share by making it harder for new entrants to establish themselves, and keeping network prices high helped; for new entrants, high network pricing could mean failure. As for customers, although they do not get billed separately for the network component of the service, network pricing can substantially affect prices to end users. In all three countries network pricing involved much litigation.4 4   Even in Sweden, a country characterized by high levels of trust and consensus (Yates 2000), the level of litigation was very high, according to interviewees. In answering a survey conducted by the law firm Jones Day, used as a basis to compare European telecommunications regulators, the telecommunications regulator said that ‘almost all decisions which negatively impact TeliaSonera are being appealed’. The answer to question 17, Annex IX, Sweden, can be found at: http://www.ocf.berkeley.edu/~drubinsi/mt/archives/services/http/users/d/drubinsi/mt/archives/ Sweden%20-­%20Jones%20Day%20Report.pdf. Similarly, in France, telecommunications agency members mentioned the large number of cases related to network pricing (interviews ART), and in England, where the number of cases was very low, numbering less than ten per sector (Scott 1998). One of the rare cases in telecommunications was about mobile termination prices, one set of network prices (T-­Mobile (UK) Ltd & Ors, R (on the application of) v Competition Commission & Anor [2003] EWHC 1566 (Admin) (June 27, 2003) at: http://www.bailii.org/ew/cases/EWHC/ Admin/2003/1566.html) and threats of litigation were common in the process (Interview BT, ­interview EDF).

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322  Comparative administrative law In those circumstances, regulators were anxious to reduce contention and increase the legitimacy of pricing decisions. In all cases, they pursued that goal by increasing transparency and providing stakeholders with an opportunity to participate. I consider each country case in turn. 2.1  Consultations and Transparency in England5 This discussion examines three actions taken by the sectoral regulators in England. The first is the Office of Telecommunications (Oftel)’s6 review of the price controls applied to British Telecoms – at this point known as BT – (the incumbent telecommunications company) in 2001.7 The second case is Oftel’s decision to regulate mobile termination prices, decided between 2000–2002. The final case is the Office of Gas and Electricity Markets (Ofgem)’s review of distribution prices in 2004–2005. (Although that case is chronologically later than the EU directives, the procedures used were ‘business as usual’ for Ofgem.) In England, both in electricity and in telecommunications, price controls were subject to the famous Littlechild formula of RPI-­X (Littlechild 1983, Littlechild 1991, Vass 1997, Graham 2000). The formula allows the incumbent to increase prices by no more than the retail price index (RPI) minus X per cent, with X determined by the regulator.8 Professor Littlechild, commissioned by the UK government to suggest a system of pricing in the liberalized market, sought to avoid the problems of the rate of return system used in the United States, which he describes as ‘.  .  .burdensome and costly to operate, reducing the incentive to efficiency and innovation, and distort[ing] the pattern of investment’ (Littlechild 1983). The RPI-­x formula, in turn, was criticized for, among other things, being no easier to administer than the rate of return idea and for not addressing the question of how to reset price controls (Graham 2000). Because there are no clear and object­ ive guidelines for determining X, the struggles associated with the rate of return system occur here as well (Newberry 1997, Vass 1997). (For a defense of RPI-­x see Littlechild and Beesley 1989.) The processes used in these cases were broadly similar. All started with a consultation document published by the relevant agency.9 The initial consultation was followed by

5   The discussion of England is relatively short, since these behaviors by the English regulators have been the subject of several very impressive studies already. See Prosser (1997), Graham (2000), Thatcher (1999). The liberalization in France and Sweden had also been studied, of course, though not from this perspective. For France, see Bourreau (2003); and while the Swedish liberalization has been studied by Hjalmarsson (1996) and Hultkrantz (2002), the regulators themselves were not studied. 6   Oftel was replaced by Ofcom, the Office of Communications, in 2003 under the Office of Communications Act 2002. 7   Price controls in telecommunications were set every four years; the 1997 price setting is described in detail by Hall et al. (2000) in their wonderful study of Oftel. 8   In the more complex versions, the operator can then add a number, Y, reflecting investments the regulator wants it to make. 9   The March 2000 consultation launched Oftel’s 2001 price review. Oftel (2000) ‘Price Control Review: A Consultative Document Issued by the Director General of Telecommunications on Possible Approaches for Future Retail Price and Network Charge Controls’. Found online at:

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Administrative agencies as creators of administrative law norms  323 additional rounds of consultation and public hearings. Respondents included operators, the public utilities access forum, consumer associations, academics, and advisory committees for Scotland, Northern Ireland and Wales. Stakeholders could submit comments electronically and otherwise. In their consultation documents, the agencies responded to the main comments. The consultation documents, the decision documents, and most comments were published on each agency’s website.10 In addition, the agencies, as a matter of policy, met with anyone who requested it, and initiated meetings with stakeholders individually or in groups.11 The agencies saw transparency and consultation as very important, and they devoted substantial efforts to explaining their actions and consulting intensively. For example, a senior official in Oftel and later in Ofcom explained, in relation to mobile termination prices, that: [we] put out a consultation document which all of these people then responded to. The essence of regulation is consultation and transparency. It is no good being a single regulator and doing things like that (claps his hands). You have to make sure that interest groups, companies, c­ itizens, consumer bodies and indeed ministers are all consulted. . .12

In relation to Ofgem’s 2004–2005 price controls, the final proposals in November 2004 were accompanied by a lengthy and detailed 137-­page document that provided substantial amounts of information to anyone who wanted it.13 Ofgem officials assumed that a dialogue with the actors was essential to their operation: My perception and my understanding of others’ perception is that the companies have been very happy with the process that we have adopted, . . . they feel very involved and very engaged, and that’s good. Because even if they don’t agree with us at the end at least it’s not on the basis of misunderstanding, it’s on the basis of us having understood their arguments and understanding what they have got to tell us and then forming a different view. And that’s, you know, what we have got to do. That’s our job.14

What is clear is that the regulators in England – as demonstrated in previous studies (Prosser 1997, Graham 2000, Hall et al. 2000) – themselves determined the norms under

http://www.ofcom.org.uk/static/archive/oftel/publications/pricing/pcr0300.htm. Last accessed by author July 12, 2009. Oftel’s mobile termination prices review was initiated by customer complaints (interview, Oftel) but followed with consultations summarized in Oftel (2001), ‘Review of Price Controls to Mobile’, February 2001, found at: http://www.ofcom.org.uk/static/archive/Oftel/ publications/mobile/ctom0201.htm, last accessed by author on July 12, 2009. Ofgem’s 2004–2005 distribution prices reviews opened with Ofgem (2003), ‘Electricity Distribution Price Control Review – Initial Consultation’, July 2003, found at: http://www.ofgem.gov.uk/Networks/ElecDist/ PriceCntrls/DPCR4/Documents1/4037-­DPCR_Main%20doc_july03.pdf, last accessed by author on July 12, 2009. 10   There are, for each agency, protections against disclosure of business secrets which are seen as confidential information and not published. 11   Interview, Oftel; interviews, mobile operators. 12   Interview, Oftel. 13  http://www.Ofgem.gov.uk/temp/Ofgem/cache/cmsattach/6584_Consultation_Final.pdf. 14   Interview, Ofgem.

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324  Comparative administrative law which price setting was to operate, and they chose very specific norms. They voluntarily held extensive consultations, substantially beyond what was required under law. They published substantial amounts of information. They internalized and implemented norms of responsiveness and transparency that later served as a model for other regulators and for the EU articles. Naturally, not everyone was happy with the agencies’ procedures. A common complaint by consumer organizations was the complexity and difficulty of reading the documents provided by the regulators. For example, in relation to Oftel’s 2001 price review, one of the National Consumer Council (NCC)’s responses criticized the consultation document, saying: The ways in which the proposed new price controls are intended to work – and the rationale for them – are complex and frequently unclear and inaccessible. . . . Neither does the document contain any clear consumer impact assessment. The document is very disappointing in these respects, especially given the crucial nature of the proposals for domestic consumers.15

The NCC voiced a similar complaint against the ‘impenetrability’ of Oftel’s consult­ ation document on mobile termination prices.16 The consultation document had 42 pages and seven annexes, totaling 109 pages, sometimes in highly technical language.17 Consumer organizations also complained that industry had substantially more impact on the process because it was conducted in a way that made it hard for consumer representatives to participate. For example, although Ofgem’s review of distribution prices in 2004–2005 included a consultation process that was open to anyone, there was no input from consumer groups. When I asked a consumer group representative why, he said: . . . the distribution price controls were very abstract and we didn’t quite get what it’s about and then quite late on we realized it was actually quite important, . . . when that realization hit us we were all buried under a lot of other work so I’m afraid that’s one we missed. But we will probably rue the day.18

In a review of the process conducted by Ofgem, the Friends of the Lake, another ­consumer organization, said that: However, often it felt like many of our comments were totally ignored. . . although we received invitations to the workshops. . ., due to the industry bias at these it made our presence seem irrelevant. . .With reference to the consultation documents, it might be beneficial to provide a Plain English Summary version to explain the main issues for those outside the industry who would like to respond.19

15   ‘Pricing and Competition in the Telephone Market: Protecting Consumers by Promoting Competition – Response to Oftel’s Consultation’, 2002, National Consumer Council, found at: http://www.ncc.org.uk/communications/pricing_competition.pdf. 16   See: ‘Review of Price Control on Calls to Mobile Phones: Response to Oftel Consultation’, National Consumer Council, May 2001. 17   Oftel, ‘Review of Charge Control on Calls to Mobiles’, September 26, 2001, found at: http:// www.ofcom.org.uk/static/archive/Oftel/publications/mobile/ctm0901.htm. 18   Interview, PUAF. Minor grammatical corrections inserted. 19  http://www.Ofgem.gov.uk/temp/Ofgem/cache/cmsattach/11655_9105_Fld.pdf.

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Administrative agencies as creators of administrative law norms  325 However, the agencies clearly did not see themselves as unresponsive and from their point of view, made substantial efforts to increase transparency and opportunities for input from external actors. 2.2  Consultations and Transparency in Sweden This discussion is based on price regulation in both electricity and telecommunications. In telecommunications, I examined regulation of TeliaSonera’s interconnection offer by Post-­och Telestyrelsen (PTS), the Swedish National Post and Telecom Agency. I also examined PTS’s decision to regulate mobile termination prices (a process which started in 1999 and continued past the EU directives, at least until 2004). And in energy I examined Staten Energimyndigheten, the Energy Agency (STEM)’s adoption of a performance model rather than post-­hoc ‘reasonableness’ review to regulate distribution prices. Sweden is a special case in terms of norms of consultation and openness. Many of the tenets of the new governance movement, ideas of increased openness (Hood 2007) and increased deliberation in making policy (Fishkin 1991, Hendriks et al. 2007) have been part of government as usual in Sweden for years, if not centuries. Agencies with some degree of autonomy from the ministries have also existed in Sweden for centuries (Peters and Pierre 2004: 44). Sweden adopted its first Freedom of Press statute in 1766 and updated it in 1949 and again in 1976 (Öberg 2000: 305–306, Gerven 2005: 70–71). Chapter 2, Article 1 of the Act sets the basic principle of transparency: In order to encourage the free interchange of opinion and the enlightenment of the public, every Swedish subject shall have free access to official documents.20

Most documents used by public officials are accessible unless they fit into one of a limited set of exceptions. This was certainly true for network pricing.21 Swedish public officials have strongly internalized the idea that everything is public and that they have nothing to hide, as anyone interviewing civil servants in Sweden can testify. Public decisions are made through consultation (Heclo and Madsen 1987, Yates 2000). The typical process for an important policy decision, as described by several of my interviewees, is that after a long process of research and thought, the agency prepares a written proposal that is then distributed to a range of actors, including government actors, the competition and consumer agencies, the ministry involved, and external actors such as employers’ unions and workers’ unions. The proposals are also placed on the agency’s website, but the process, while heavily consultative, was not as inclusive as the British process, since it tended to include the ‘usual suspects’. On the other hand, since labor unions included most of the workers, these actors represented a large percentage of the population. These actors comment on the proposal. Then 20   Freedom of Press Act, English translation found at: http://www.servat.unibe.ch/law/icl/ sw03000_.html (last accessed by author July 14, 2009). 21   Interview, PTS. Several documents were made available to me. The only limit is that the agency does protect trade secrets – which is a well accepted limit; the United States Freedom of Information Act also acknowledges the Trade Secrets exception. 5 USC §552(b)(4).

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326  Comparative administrative law the agency prepares another proposal, incorporating changes, the comments, and its response to them.22 In short, Swedish agencies were following norms of transparency and consultation long before liberalization; thus, adoption did not occasion a culture shock. In relation to price setting, their approach was to adhere to the existing norms but deepen them, using the internet to improve transparency and to increase the range of actors consulted. Unlike other European countries, prices in Sweden were not set ex ante. Instead, the regulators evaluated prices set by companies ex post for reasonableness. The Swedish agencies eventually adopted computerized models to assess prices. They used a collaborative process for development of both the telecommunications and energy models. In tele­ communications, it was the former incumbent, TeliaSonera, that developed the various models in close cooperation with and with substantial input from the regulator, PTS.23 In energy, the regulator initiated the model and developed it, but with substantial input from industry.24 In both cases, what characterized the process was a dialogue between the regulator and the regulated industry, with other actors closely informed. After creating the models, the regulator was in charge of enforcing the price controls. As mentioned, the regulators changed the process by making use of the internet to increase transparency and broadening the range of actors who could participate. The regulators now publish consultations on their websites.25 They open them to comment from whoever desires even though legal norms do not require it. Participation from the new operators had become a constant aspect of the consult­ ations, and the result of liberalization was a permanent increase in the range of actors taking part in the decision. However, in spite of the increased openness of the process, there is little consumer participation, directly or through proxy. Although the consumer agency – Konsumentverket – participates in some decisions by commenting on documents, it does not always participate in price setting. When I asked members of the consumer authority why they were not involved in these issues, I was told that they do not work on prices, which are left to the market. Their work in that area is to make sure that consumers know the prices, that is, to increase transparency.26 I did not find any activity by private consumer organizations or associations in price setting. Nor was it mentioned by my interviewees, and when asked about it, they usually responded by commenting on the lack of involvement of consumer organizations. 2.3  Consultations and Transparency in France This discussion is based on three French cases that I elaborate on in my longer study. First, France Télécom (FT) issued an interconnection catalogue in 2004–2005 that was part of an annual catalogue of prices. The catalogue was submitted to the regulator, Autorité de   Interview, PTS; interview, National Audit; interview, Competition Agency.   Interviews, PTS. Interviews, TeliaSonera. 24   Interviews, STEM. Interview, Svenskenergi (Swedenergy – the industry association). 25   PTS’s website can be found at: http://www.pts.se/main.aspx?id=3&epslanguage=EN-­GB; STEM’s website can be found at: http://www.energimyndigheten.se/en/. 26   Interview, Konsumentverket. 22 23

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Administrative agencies as creators of administrative law norms  327 Régulation de Télécommunications (ART),27 to approve or disapprove.28 The second case is ART’s regulation of mobile termination prices, a series of decisions made between 2000 and 2003. Finally, I examined the setting of transmission prices by the Commission de Regulation d’Energie (CRE), the energy regulator. In none of these cases was the agency legally required to publish information or consult beyond a requirement for consultation with the Conseil de la Concurrence, the competition commission. Nonetheless, in all of them the agencies published substantial amounts of information on their websites and consulted with at least some of the stakeholders. ART used working groups and roundtables to consult with other operators, with working groups starting before the initial submission of the catalogue and continuing to the end of the process. It consulted heavily with all operators and operator organizations. It published the consultations on the website. Because France is a latecomer to the process and the agencies’ commitment to transparency and participation may be more suspect, some examples are in order. In relation to mobile termination prices, in 1999 ART initiated a roundtable to discuss the anomaly that incoming rates (calls to a mobile phone) were higher than outgoing rates. ART concluded that prices needed to be lowered.29 It then began negotiations on prices with the three main mobile operators, Orange (connected to France Télécoms), Société Française de Radiotéléphone (SFR – connected to Cegetel and later to Vodaphone) and Bouygues Télécoms30, and with France Télécoms, the incumbent. While these negotiations went on, the EU passed the second telecommunications package, setting up the new framework on April 24, 2002. Although the new framework did not go into effect until July 25, 2003, most of the member countries started implementing it earlier. ART was working on some market reviews as early as January 2003, well in advance of the enactment, on June 3, 2004, of the new law adopting the EU framework.31 Formal consultations for the mobile termination market started in April 16, 2004 (that is, before the passage of the French law adopting the EU framework). However, those 27   ART was later changed to the Autorité de Régulation des Communications Electroniques et des Postes (ARCEP). 28   Until the telecommunications law of 2004, this was one of the few cases where the authority had power; most other prices had to be approved by the minister; however, my interviewees pointed out that the minister accepts almost all of ART’s avis (opinions), except some that are politically sensitive. The discussion here refers to the system existing before the law of 2004. 29   See ART’s conclusion at: http://www.art-­telecom.fr/communiques/communiques/1999/app​ entr.htm. This is a simplification of the process, which can be read in more detail in my dissertation, see supra, note 1. The main point is that a detailed review led ART to conclude that SFR and Orange had significant market power in the metropole, i.e., in France itself, as opposed to its overseas colonies. SFR and Orange’s subsidiaries in the French Caribbean were also declared SMP operators during 2003; it therefore decided it was justified in regulating their prices and acted. See ART (1999), Décision No. 99-­823 du 30 septembre 1999 complétant la décision No. 99-­767 en date du 15 septembre 1999 etablissant pour 2000 la liste des opérateurs exerçant une influence significative sur un marché des télécommunications, J.O. 278, p. 17884, found at: http://www.art-­telecom.fr/ textes/avis/index-­99-­823.htm. 30   OECD Review of Regulatory Reforms, Regulatory Reforms in France, at: http://www.oecd. org/dataoecd/36/35/32482712.pdf. 31   Interview, ART.

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328  Comparative administrative law consultations were not the first step; prior to it, ART conducted extensive discussions with mobile operators, FT, and other actors. There were many meetings and extensive email and telephone interchanges.32 In addition, ART conducted an industry survey, seeking responses from telecommunications industry actors as well as important actors in French industry in general, such as the Banque de France and France Television.33 For industry actors, therefore, the contents of the consultation documents came as no great surprise. Industry members responded in depth to the consultation.34 After the consultation with the Conseil de Concurrence, the competition commission, ART, drafted a decision and began a public consultation.35 It held extensive discussions with industry members, mobile and fixed operators and France Télécoms.36 The consumer organization UFC-­Que Choisir also participated.37 In the end, price caps were imposed on the mobile operators which will lead to a gradual decrease in prices (in effect, continuing the previous trend of reducing prices slowly).38 This decision was unacceptable to the consumer organization UFC-­Que Choisir, which contested the gradual nature of the reduction – UFC-­Que Choisir wanted immediate and drastic reductions.39 On February 14, 2005, the telecommunications person at Que Choisir filed an appeal against ART’s decision with the Conseil d’Etat.40 The appeal was rejected by the Conseil d’État in December 2005.41   Interview, ART.   Mentioned in the April 16, 2004 consultation, found at: http://www.art-­ telecom.fr/ publications/c-­publique/consult-­16av04.pdf. 34   The response to the consultation came from: 9Telecom, Afim, Bouygues Télécom Caraïbe, British Telecom, Colt, Coriolis, Dauphin Telecom, France Télécom, MCI, Orange Caraïbe, Orange France, Orange Réunion, Prosodie, SFR, Tele2 – all operators. See: http://www.art-­telecom.fr/dos​ siers/termi-­appel/tam.htm. The consultation itself was public, i.e., it was on the web and anyone could respond. 35   November 2, 2004. See: http://www.art-­telecom.fr/publications/c-­publique/appelcom-­tam­021104.pdf. ART also opened, a month later, a consultation about imposing a price cap on the French overseas departments: http://www.art-­ telecom.fr/publications/c-­ publique/appcom-­ tamdom-­081204.pdf. In an interview with a member of Orange, I was told that this seems to them completely irrational because there is no dominant operator in the overseas departments. 36   Interview, ART. 37   UFC-­Que Choisir had a small staff devoted to the issue of telecommunications, consisting of one full-­time advocate focusing on telecommunications and the regular staff providing administrative assistance. In spite of that, it was relatively active in relation to the regulator. Interviews, ART; interview, UFC-­Que Choisir; interview, Ministry. 38   In numerical terms, ART decided to impose price caps on the mobile operators, lowering the price from 14.94 centimes to 12.79 centimes for SFR and Orange and 14.79 for Bouygues Télécoms during 2005, and to a further 9.50 centimes for SFR and Orange and 11.24 for Bouygues Télécoms in 2006, which should lead to an 11% reduction in retail mobile prices on January 2005. See Communique de Press, Analyze du marche, of December 10, 2004 at: http://www.art-­telecom. fr/communiques/communiques/2004/index-­c101204-­2.htm. The Communique makes reference to all the opinions. A similar decision was made for the overseas departments on February 1, 2005. See: http://www.art-­telecom.fr/communiques/communiques/2005/index-­c05-­07.htm. 39   Interview, Que Choisir. 40   See: http://www.comparatel.fr/news/dnews_id-­5251_t-­UFC,Que,Choisir,saisit,le,Conseil,d, Etat,pour,les,appels,fixe,vers,mobile,et,attaque,France,Telecom,sur,le,meme,sujet.htm. 41   Conseil d’État statuant au contentieux No. 277441 du 5 décembre 2005, found at: http:// www.legifrance.gouv.fr/WAspad/Visu?cid=250026&indice=2&table=JADE&ligneDeb=1. 32 33

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Administrative agencies as creators of administrative law norms  329 Two things should be clear from this discussion. First, ART took the ideas of transparency and consultation very seriously. Its decisions, from 1999 onwards, were published on its website. It consulted with a range of actors, especially – but not only – after the European Directive came into force. Second, these transparency and consultation norms reflected only part of the actual process, and the fact that the agency did not respond to specific comments or explain what it did or did not adopt, left it open to allegations of improper decision-­making. In the energy sector, when the Commission de Regulation d’Energie (CRE) recommended transmission tariffs in an opinion prepared for the minister in charge,42 it engaged in extensive consultation and published substantial amounts of information on its ­website.43 CRE consulted economists and went to great lengths to get expert opinions on the general principles of network pricing from French as well as foreign economists. The latter’s involvement was important since they were more likely to be independent of influence by the incumbent, Electricité de France (EDF) and CRE was anxious not to be – nor appear to be – captured by EDF.44 Politically, not all went smoothly. The powerful lobbies of the food and tourist industries objected that the initial tariffs were too high and put pressure on the minister to change them. The minister in turn put pressure on CRE by simply refusing to act – neither rejecting nor implementing their proposals.45 In the end, CRE modified its proposals slightly, explaining that: Ce nouveau tarif reprend l’ensemble des principes rendus publics par la CRE en mai 2000, et qui ont fait l’objet d’une large consultation des utilisateurs de réseaux.46   [The new tariff adheres to the principles published by CRE in May 2000 and that were the object of a broad consultation with users of the network (my translation).]

The minister then accepted the proposals.47 There was clearly government involvement, but, nevertheless, the minister did not openly reject CRE’s proposition in spite of the heavy political pressures on him, and he did no more than wait. His lack of active involvement shows the strength of the independent regulator in the process. Deviations from the CRE proposal would need to be explained to parliament. The regulator published its recommendation, which was phrased in neutral, professional terms, and conducted substantial consultations with experts and interested parties. These practices contributed to the legitimacy of the process, making it hard for the ministry to overturn CRE’s proposal without seeming blatantly ­unprofessional and 42   Le Ministre délègue de l’industrie, i.e., the Minister of Industry in the Ministry of Economy, Finances and Industry. 43   Interviews, CRE. See also CRE (2000), ‘La Rapport, D’activité, Juin 2001’. Found on the CRE’s site, under ‘Rapports Annuel’, at: http://www.cre.fr/fr/documents/publications/rapports_ annuels, last accessed by author on July 13, 2009, 11–13. See also, CRE (2000), ‘Avis sur le projet de décret relatif aux tarifs d’utilisation des réseaux publiques de transport et de distribution’, found on CRE’s website, www.cre.fr. 44   Interview, CRE. 45   ‘Il metait le coude’, put his elbow down on it, in the words of an interviewee. 46   CRE (2002) ‘Publication du tarif d’utilisation des réseaux de transport et de distribution d’électricité’. Found at: http://www.cre.fr/fr/ressources/communiquesdepresse/communiquesdepr​ esse_consultation.jsp?idDoc=681. 47   Interviews, CRE.

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330  Comparative administrative law partisan.48 In this case, the agency used the requirements for transparency and consult­ ation to help protect it against pressure from strong political authorities.

3.  DISCUSSION AND CONCLUSIONS As the previous cases demonstrate, all six agencies adopted norms of transparency and consultation that went beyond any legal requirement, norms that later served as the basis for the EU’s regulatory framework. Several cross-­cutting reasons help to explain this behavior.49 Regulators, as non-­majoritarian institutions, need a source of legitimacy as a substitute for the democratic legitimacy derived from elections (Majone 1994, Thatcher and Stone Sweet 2002). Open procedures could fulfill this need. However, convincing as it is, this does not address either the specific form of such procedures – a form reminiscent of United States notice and comment procedures – or the strong similarities between the norms adopted by regulators across different sectors and different states. Another explanation fills that gap: the agencies adopted similar institutions mimetic­ ally (Campbell 2004). Several mechanisms seemed to have been at work. First, as suggested by Custos (see Chapter 17 of this volume), a process of Americanization seems to have been at work, with the agencies drawing on the ideas of US-­style rulemaking to guide the procedures they adopted: that is, to publish, and provide an opportunity to comment. The Americanization may have been through direct copying; or it may, as Custos suggests, have been indirect, even though norms of consultation and transparency were adopted by the EU only after they were used by the independent agencies. Rather, a network process seems to have been at work (Slaughter 2004). The regulators in Europe are tied together through open network (Coen and Thatcher 2008), and in the case of these regulators, they also have informal email listserves. There is informal reputational competition between regulators concerning how well they regulate. Once the UK agencies adopted – relatively early – strong norms of transparency and consultations, and once the Swedish agencies weighed in with their existing norms, there seems to have been peer pressure to adopt such norms.50 However, the adoption of such norms by the agencies is not problem-­free, as the cases above suggest. One real danger is that the consultation norms will give an advantage to the regulated industry in influencing the decision-­making process – as the cases suggest they did. Industry tends to have more resources and to be more focused on regulatory issues than consumer organizations; they are better able to speak the language of economic rationality in which the discussions are conducted (Morgan 2003), and they often

  Interview, Ministry. Interviews, CRE.   This section will not address the reasons specific to each case. For example, in their study of Oftel, Hall et al. (2000) demonstrate that the personality and preferences of Oftel’s charismatic Director General, Don Cruikshank, from an industry background, led to Oftel’s adoption of a ‘meeting culture’ and extensive involvement of stakeholders in decision-­making. And one explan­ ation for CRE’s adoption of transparency and participation was to protect agency independence against political involvement. 50   Interviews, ART. 48 49

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Administrative agencies as creators of administrative law norms  331 know the political system better. These advantages exist in any situation, not just in one of consultation, but the main policy recommendation that I draw from my research is that regulators should seek to counteract this bias in the consultation process. Because consumers face barriers to participation, and because their perspectives and reactions are extremely important to the regulation of utilities, regulators can and should make efforts to seek their participation. Examples of such efforts include Ofcom’s and ART’s direct solicitation of input from consumer organizations; Oftel’s and Ofcom’s initiation of an advisory ‘consumer panel’; CRE’s working group, with consumer representatives; ART’s online chats on burning issues. However, all these agencies are taking steps to improve and strengthen consumer input, for example through simplified summaries of long, technical documents, by allowing longer comment periods to facilitate participation from resource-­ strapped consumer organizations, and by soliciting consumer feedback through surveys or through creating special departments to represent consumers.51

REFERENCES Aberbach, J.D. and B.A. Rockman. 1988. ‘Image IV Revisited: Executive and Political Roles’, Governance, 1:1–25. Bourreau, M. 2003. ‘Local Loop Unbundling: The French Case’, Communications & Strategies, 49: 119–35. Campbell, J.D. 2004. Institutional Change and Globalization, Princeton, NJ: Princeton University Press. Carpenter, D.P. 2001. The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862–1928, Princeton, NJ: Princeton University Press. Citron, D.K. 2008. ‘Technological due process’, Washington University Law Review, 85: 1249–313. Coen, D. and M. Thatcher. 2008. ‘Network Governance and Multi-­level Delegation: European Networks of Regulatory Agencies’, Journal of Public Policy, 28: 49–71. Fishkin, J.S. 1991. Democracy and Deliberation: New Directions for Democratic Reform, New Haven, CT: Yale University Press. Galligan, D.J. 1996. Due Process and Fair Procedures: A Study of Administrative Procedures, Oxford: Oxford University Press. Gerven, W. 2005. The European Union: A Polity of States and Peoples, Palo Alto, CA: Stanford University Press. Graham, C. 2000. Regulating Public Utilities: A Constitutional Approach, Oxford and Portland, OR: Hart Publishing. Hall, C., C. Scott, and C. Hood. 2000. Telecommunications Regulation: Culture, Chaos and Interdependence Inside the Regulatory Process, London and New York: Routledge. Halliday, S. 2004. Judicial Review and Compliance with Administrative Law, Oxford: Hart Publishing. Heclo, H. and H. Madsen. 1987. Policy and Politics in Sweden: Principled Pragmatism, Philadelphia, PA: Temple University Press. Hendriks, C.M., J.S. Dryzek, and C. Hunold. 2007. ‘Turning Up the Heat: Partisanship in Deliberative Innovation’, Political Studies, 55: 362– 83. Hickman, K.E. 2007. ‘Coloring Outside the Lines: Examining Treasury’s (Lack of) Compliance with Administrative Procedure Act Rulemaking Requirements’, Notre Dame Law Review, 82: 1727– 808. Hjalmarsson, L. 1996. ‘From Club Regulation to Market Competition in the Scandinavian Electricity Supply Industry’, in International Comparisons of Electricity Regulation, R.J. Gilbert and E.P. Kahn, eds., Cambridge: Cambridge University Press, 126–78. Hood, C. 2007. ‘What Happens When Transparency Meets Blame-­avoidance?’, Public Management Review, 9: 191–210. Hultkrantz, L. 2002. ‘Telecommunications Liberalisation in Sweden: Is “Intermediate” Regulation Viable?’, Swedish Economic Policy Review, 9: 133–61. Littlechild, S. 1983. ‘Regulation of British Telecommunications’ Profitability: Report to the Secretary of State’, London: Department of Industry.

  For an expanded discussion of consumer input, see Reiss (2009).

51

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332  Comparative administrative law Littlechild, S. 1991. ‘Office of Electricity Regulation: The New Regulatory Framework for Electricity’, in Regulators and Market, C. Veljanovski, ed., London: Institute of Economic Affairs, 107–18. Littlechild, S.C. and M.E. Beesley 1989. ‘The Regulation of Privatized Monopolies in the United Kingdom’, RAND Journal of Economics, 20: 454–72. Lubbers, J.S. 2008. ‘The Transformation of the U.S. Rulemaking Process – For Better or Worse’, Ohio Northern University Law Review, 34: 469–82. Magill, M.E. 2009. ‘Agency Self Regulation’, George Washington Law Review, 77: 859–903. Majone, G. 1994. Independence vs. Accountability: Non-­majoritarian Institutions and Democratic Government in Europe, Florence: European University Institute. Majone, G. 1999. ‘The Regulatory State and its Legitimacy Problems’, West European Politics, 22: 1–24. McCubbins, M.D., R.G. Noll, and B.R. Weingast. 1987. ‘Administrative Procedures as Instruments of Political Control’, Journal of Law, Economics and Organization, 3: 243–77. Moe, T.M. 1989. ‘The Politics of Bureaucratic Structure’, in Can the Government Govern, C.A. Peterson, ed., Washington, DC: Brookings Institution Press, 267–329. Morgan, B. 2003. Social Citizenship in the Shadow of Competition: The Bureaucratic Politics of Regulatory Justification, Aldershot: Ashgate Publishing Limited. Newberry, D.M. 1997. ‘Determining the Regulatory Asset Base for Utility Price Regulation’, Utilities Policy, 6: 1–8. Noah, L. 2008. ‘The Little Agency That Could (Act with Indifference to Constitutional and Statutory Strictures)’, Cornell Law Review, 93: 901–26. Öberg, U. 2000. ‘EU Citizens’ Right to Know: The Improbable Adoption of a European Freedom of Information Act’, in The Cambridge Yearbook of European Legal Studies, vol. 2, A. Dashwood, S. Worthington and A. Ward, eds., Cambridge: Centre for European Legal Studies, 303–28, available at http://www.cels.law.com. uk/publications/cambridge_yearbook_of_european_legal_studies.php. Peters, B.G. 1997. ‘Politicians and Bureaucrats in the Politics of Policy-­making’, in Bureaucracy and Public Choice, J.-­E. Lane, ed., London: Sage Publications, 156–82. Peters, B.G. and J. Pierre. 2004. Politicization of the Civil Service in Comparative Perspective: The Quest for Controls, New York: Routledge. Prosser, T. 1997. Law and the Regulators, Oxford: Clarendon Press. Reiss, D. 2009. ‘Agency Accountability Strategies after Liberalization: Universal Service in the United Kingdom, France, and Sweden’, Law & Policy, 31: 111–41. Rubinstein, D. 2007. ‘Regulatory Accountability: Telecommunications and Electricity Agencies in the UK, France and Sweden’, Ph.D. thesis, University of California, Berkeley. Scott, C. 1998. ‘The Juridification of Regulatory Relations in the UK Utilities Sectors’, in Commercial Regulation and Judicial Review, J. Black, P. Muchlinski and P. Walker, eds., Oxford: Hart Publishing, 19–61. Slaughter, A.-­M. 2004. A New World Order, Princeton, NJ and Oxford: Princeton University Press. Spence, D.B. 1999. ‘Managing Delegation Ex Ante: Using Law to Steer Administrative Agencies’, Journal of Legal Studies, 28: 489–513. Thatcher, M. 1999. The Politics of Telecommunications: National Institutions, Convergence and Change in Britain and France, Oxford: Oxford University Press. Thatcher, M. 2002. Regulation after Delegation: Independent Regulatory Agencies in Europe, Journal of European Public Policy, 9: 954–72. Thatcher, M. and A. Stone Sweet. 2002. ‘Non-­majoritarian Institutions’, West European Politics, 25: 1–22. Vass, P. 1997. ‘The Methodology for Resetting X’, Regulatory Review, 1997: 159. Wilson, J.Q. 1989. Bureaucracy – What Government Agencies Do and Why They Do It, New York: Basic Books. Yates, J. 2000. ‘Sweden’, in Comparative Public Administration, J.A. Chandler, ed., London and New York: Routledge, 148–72

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20.  Comparing regulatory oversight bodies: the US Office of Information and Regulatory Affairs and the EU Regulatory Scrutiny Board Jonathan B. Wiener and Alberto Alemanno

Over the last four decades, many governments have established Regulatory Oversight Bodies (ROBs) to review new regulations using prospective regulatory impact assessment (ex ante RIA), and – sometimes – to review past regulations using retrospective regulatory impact assessment (ex post RIA) (De Francesco 2013, OECD 2015, Parker and Alemanno 2015, Radaelli and De Francesco 2008, Renda and Castro 2016, Wiener 2013, Wiener and Ribeiro 2016a, Wiener and Ribeiro 2016b). Virtually all of the 35 members of the OECD have established ROBs (OECD 2015, 21–38, 93–102). In this chapter, we compare the origins, structures, powers, procedures and scope of the principal ROBs in the United States and the European Union, the US Office of Information and Regulatory Affairs (OIRA) and the EU Regulatory Scrutiny Board (RSB) (formerly called the Impact Assessment Board (IAB)). The existence of ROBs on both sides of the Atlantic can foster international regulatory cooperation (Wiener and Alemanno 2015). The differences in the regulatory oversight systems in the US and the EU stem in part from the different governance structures undergirding these oversight bodies.

1.  RATIONALES FOR ROBs Regulation can protect the public from health, safety and environmental risks, asymmetric information, market power, and unfair treatment. Although well-designed regulation can remedy such problems, poorly-designed regulation can have unintended consequences, including misplaced priorities, compliance costs, impediments to trade and innovation, ancillary impacts (side effects), unfair treatment, and interest group rent-seeking (Olson 1971; Ackerman and Hassler 1981; Breyer 1993; Wolf 1993; Graham and Wiener 1995; Wiener and Richman 2010; Adler 2012). Thus regulation spurs demand for oversight of the regulatory system itself in order to reduce the costs and ancillary risks, increase the benefits, promote cost-effective instrument choice, encourage consistency and transparency, ensure accountability and equity, and improve the overall social outcomes of regulation. Governments have increasingly turned to regulatory oversight, particularly oversight by a centralized governmental body, to improve regulatory outcomes (Lindseth, Aman and Raul 2008, 3). The aim of regulatory oversight is both democratic and technocratic: to enhance the accountability of regulatory agencies to democratically elected officials and the public, and to use analytic methods to improve the overall social outcomes of regulation by redu­cing the costs and ancillary risks and increasing the benefits. Regulatory oversight 333 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 333

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334  Comparative administrative law typically uses economic analysis to conduct ex ante and ex post RIAs (Revesz and Livermore 2008, Graham 2008, Adler and Posner 2001, Adler and Posner 2006, Adler 2012, Deighton-Smith 2006, 2007, OECD 2009, OECD 2015). The tools used include benefit-cost analysis, cost-effectiveness analysis, risk-risk tradeoff analysis,1 and scientific risk assessment (Graham and Wiener 1995, Bagley and Revesz 2006, Wiener 2006, Graham 2008, Revesz and Livermore 2008). Related tasks of an ROB may involve assisting agencies in improving the quality of their analyses, reducing administrative burdens, simplifying existing legislation and regulation, and stakeholder consultation (Alemanno 2015b, Beslier and Lavaggi 2006, European Commission 2007, OECD 2015, 119–40). The analytical tools and methodologies that are typically employed in regulatory oversight could, in principle, be employed by a variety of actors, including legislatures, courts, executive officials, and non-governmental organizations. The distinctive institutional development of the past four decades in the US and during the past two decades in Europe has been the emergence of ROBs in the executive branch, at the center of government, supervising regulation government-wide. Three-quarters of the 35 members of the OECD have now established such center-of-government ROBs, although most of these OECD members have also established multiple ROBs in multiple institutional locations (OECD 2015: 34–35, Figs. 1.7, 1.8). One key attribute of an executive ROB is expertise, in the form of a trained professional staff capable of undertaking technical evaluations of regulatory impacts and options. These staff may be economists, but also may include experts in other fields of social science, law and policy, life science and physical science. A second key attribute of an ROB is political accountability, such as through the center of government (e.g., the President or Prime Minister) to the electorate (Ackerman 1993; Ackerman 1998; Lindseth, Aman and Raul 2008, Tushnet 1995; Mendelson and Wiener 2014, 469–71). An ROB faces possible tensions between these two key attributes. Technocratic expert­ ise, if well implemented, can foster political accountability by ensuring transparent analysis of the pros and cons and tradeoffs of policy alternatives, by overcoming interest group distortions, and by ensuring that regulation broadly improves social well-being (Stiglitz 1997). As Adam Smith (1976 [1776]) observed, expert analysis can be an antidote to hasty enthusiasms and politicized distortions of public policy. But the President’s or Prime Minister’s policy program (or statutory texts) may differ from and conflict with the experts’ advice (Shapiro 2006, Graham 2007b). In such cases, the ROB may need to explain its expert technical analysis to a political leader who has a different priority; or the ROB may help make the impacts and tradeoffs transparent, while recognizing that the political leader’s authority will override the ROB’s expert technical analysis. The ROB may both need independence from political micro-management, to assure its objectivity, and simultaneously need to be close to power in order to have influence over other ministries and to carry forward the President’s or Prime Minister’s regulatory policy program (Kagan 2001).2

  Including both ancillary harms (countervailing risks) and ancillary benefits (co-benefits).   By contrast, judicial regulatory oversight typically involves generalist professionals who are not politically accountable – rather, judges are often intended to be independent, at least partly shielded from political influence via secure job tenure. See Jordão and Rose-Ackerman 2014. 1 2

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Comparing regulatory oversight bodies  335

2.  ORIGINS OF ROBs In the past, countries with a Roman law tradition, such as France and Italy, set up Councils of State that performed some ROB functions (Caretti and De Siervo 1996, Robineau and Truchet 2002). These bodies served as advisors to the government on the legality of regulatory decisions, and they were also the superior level of the administrative courts, exercising an adjudicative role over specific regulations (Breyer 1993: Part III). Since 2009, the French Conseil d’Etat also reviews RIAs before proposed new regulatory legislation is sent to the National Assembly.3 ROBs established since the 1970s have a different origin. They were mainly created in response to concerns over the economic impact and social performance of the growing array of regulations, the need for expert analysis, the public’s demand for accountability and transparency, and the executive branch leader’s (President or Prime Minister) interest in managing the regulatory state. 2.1  The Origin of the US OIRA In the late 1700s, the US Constitution’s system of checks and balances sought to avoid the concentration of power seen in monarchic regimes. In 1946, the US Administrative Procedure Act (APA) responded to the ‘New Deal’ expansion of federal regulation. In turn, the US Executive Orders on RIA since the 1970s were, in part, a response to the ‘Great Society’ expansion of health and environmental legislation in the 1960s and 1970s, as well as the slowing economy, accumulated economic regulation, and academic analysis (Mendelson and Wiener 2014, 454–463; Wiener and Ribeiro 2016b). In 1978, President Jimmy Carter issued Executive Order (EO) 12044, requiring economic analysis of new regulations, and he created the Regulatory Analysis Review Group, an interagency working group that gathered when needed to review these ­economic ana­lyses. Then in 1980, President Carter signed the Paperwork Reduction Act, creating the US Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB). The Administrator of OIRA is appointed by the President, with Senate confirmation (since the 1986 amendments to the Paperwork Reduction Act). OIRA had approximately 80 expert non-political staff in the 1980s; that number has declined to about 40 today. Just after Ronald Reagan became President in 1981, he issued EO 12291, formally giving OIRA the role of a ROB. The Reagan EO required agencies in the core executive branch to conduct regulatory impact assessments using benefit-cost analysis, to ensure that ­regulations’ benefits ‘outweigh’ their costs, and to submit those RIAs to OIRA for review, while giving OIRA the power to ‘return’ an unsatisfactory regulation or RIA to the agency. So-called ‘independent’ agencies, such as the Federal Communications Commission, were exempt from the EO.4 Some viewed the EO as an intrusion on the 3   Loi organique n° 2009-403 du 15 avril 2009 relative à l’application des articles 34-1, 39 et 44 de la Constitution [Law of 2009-403 of Apr. 15, 2009 for the Application of Articles 34-1, 39 to 44 of the Constitution], Journal Officiel de la République Française [J.O.] [Official Gazette of France], Apr. 16, 2009, p. 6528. 4   In Europe the term ‘agency’ is often used to refer only to independent or quasi-independent

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336  Comparative administrative law agencies’ duties to carry out statutory instructions from the Congress; but others replied that the EO expressly provided that it did not override statutes, and that the President has the authority to manage the executive branch. President George H.W. Bush continued OIRA’s role under EO 12291. When Bill Clinton became President in 1993, some speculated that he might issue a new EO curtailing OIRA’s role. Instead, Clinton’s EO 12866 reaffirmed the role of OIRA in reviewing agencies’ policy proposals and RIAs using benefit-cost analysis. It replaced the word ‘outweigh’ with the word ‘justify,’ emphasizing the importance of qualitative as well as quantitative criteria, and orienting the role of RIAs to inform the considered judgments of publicly accountable officials, not dictating decisions arithmetically. Clinton’s EO also broadened the scope of the impacts to be considered in RIAs to include distributional impacts and ancillary impacts, and it enhanced the transparency of OIRA review. George W. Bush became President in the contentious 2000 election, and speculation arose that he might issue a new EO enhancing OIRA’s oversight role. Instead, Bush retained Clinton’s EO 12866 (with only minor modifications made in his second term, such as adding coverage of agency ‘guidance documents’). During the Bush administration, OIRA also issued guidelines on the conduct of RIA, notably through OMB Circular A-4 (September 2003). Barack Obama took office in 2009 and also maintained EO 12866 issued by President Clinton in 1993, and Circular A-4 issued by OIRA under President Bush in 2003. President Obama also issued EOs to promote retrospective review (EO 13563), impact assessment by ­‘independent’ agencies (EO 13579), and international regulatory cooperation (EO 13609) (see Mendelson and Wiener 2014, 454–63). In early 2017, Donald Trump issued EO 13771 to cap aggregate regulatory costs and require that new regulations be matched by offsetting cost reductions from past regulations (while retaining EO 12866, so far). The role of OIRA has come to reflect a bipartisan consensus among all the US Presidents of the last four decades, of both political parties, that the executive branch needs tools to oversee the regulatory state and manage its choices, employing both expert analysis and political accountability (Kagan 2001; Mendelson and Wiener 2014, 457–8). 2.2  The Origin of the EU IAB/RSB The EU launched its formal impact assessment (IA) procedure in 2002 within the European Commission. This process scrutinizes the quality of IAs conducted by the Commission services (directorates general, or DGs) on proposals for new or revised pol­ icies. From 2002 to 2006 these IAs were shared and discussed among the DGs. Then in November 2006, the EU established a ROB to oversee the IA process: the EU Impact Assessment Board (IAB), located in the office of the Secretariat-General of the European Commission (Alemanno 2008). The IA process and the creation of the IAB grew out of the EU ‘Better Regulation’ initiative (Wiener 2006), spurred by the Lisbon Agenda and the Mandelkern Report of 2001. The Commission issued Impact Assessment Guidelines in 2003, and revised them in 2005, 2009 and 2015.

regulatory bodies. We use the term here in the broader US sense to refer to any regulatory body, both inside and outside the cabinet structure of government.

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Comparing regulatory oversight bodies  337 In May 2015, the Commission under new President Juncker renamed the IAB the Regulatory Scrutiny Board (RSB). The primary role of the IAB/RSB is to oversee the quality of the IAs produced by the DGs. It had a five-member board (later expanded to nine), made up of high-level Commission officials from several DGs. The RSB now has seven members, including three ‘independent’ members. The Chair of the IAB/RSB is a Deputy Secretary-General. The structure of the IAB/RSB is thus more akin to the interagency RARG than to the standing body of OIRA with its single Administrator and permanent staff (Alemanno 2015a). As in the US, the EU Better Regulation initiative and its IA program, including the cre­ation of the IAB/RSB, are, in part, a response to the growth of EU-level regulation, notably following the 1987 Single European Act and the 1992 Maastricht Treaty (Alemanno 2008, 45–6). The IAB drew lessons from the US (Wiener 2006), as well as from the UK and other Member States, where some claimed that significant improvements in regulatory frameworks and deregulation had been associated with renewed economic growth (Radaelli and De Francesco 2007). As in the US, regulatory oversight has achieved bipartisan consensus in the EU across several presidencies of the Commission, including Presidents Romano Prodi, José Manuel Barroso, and Jean-Claude Juncker, and has also been endorsed by the Council of the EU.5 Under President Juncker, Better Regulation has been elevated to one of the Commission’s top political priorities.

3. STRUCTURE: CONSTITUTIONAL AND INSTITUTIONAL DESIGN OF THE US AND EU ROBs US OIRA is located in the Executive Office of the President. The President appoints the OIRA Administrator with confirmation by the Senate. The Administrator reports to the Director of the Office of Management and Budget (OMB), and then to the President. From its location in the center-of-government, OIRA oversees regulation by all federal agencies. Although it has historically limited its RIA oversight to ‘executive’ agencies and been more deferential to ‘independent’ agencies (Mendelson and Wiener 2014, 449, 459–60), that stance may be evolving as Presidents (as indicated in EO 13579) and scholars (Datla and Revesz 2013; Bubb 2015) increasingly favor OIRA oversight of RIA by historic­ally ‘independent’ agencies. OIRA’s oversight role is nested among other White House offices also interested in shaping policy (such as the Council on Environmental Quality [CEQ], which can review agencies’ environmental impact assessments), potential judicial review in the courts, and potential further legislative action by the Congress. OIRA’s location in the executive branch and the separation of powers structure of the US government means that OIRA review occurs after Congress has enacted legislation, and typically after the agency has developed and proposed a new regulation to implement that legislation (Parker and Alemanno 2015) (although OIRA has sought to play a role earlier in agencies’ development of their regulations, see Graham 2007a). The US has no IA process nor ROB to oversee Congressional enactment of primary legislation.

5   Council of the European Union, Conclusions of the Competitiveness Council on Better Regulation, December 3–4, 2009.

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338  Comparative administrative law In the EU, the structure is more fragmented. The European Commission, akin to an executive branch, nonetheless has the sole authority to propose new legislation to the European Parliament and the European Council. Thus the IAB/RSB, located within the Commission, reviews the IAs conducted on DGs’ proposals for new primary legislation before enactment. If amendments are proposed, a further IA may be conducted by the European Parliament’s own Impact Assessment Unit. And when such legislation is later implemented in the Member States, the Member States’ ROBs may conduct their own IAs. Hence, compared to the US, the EU IAB/RSB review of proposals for legislation occurs much earlier in the policy cycle (see Parker and Alemanno 2015; and cf. Alemanno and Meuwese 2013 on the possibilities of EU review of post-legislative implementing actions). In the EU, most legislation is implemented, not by the EU institutions, but by the Member States, whereas in the US most Congressional legislation is implemented by the federal agencies. Hence the early EU IAB/RSB review of IAs occurs before further amendments and before the details of implementation are worked out (perhaps before the policy details are fully clear), while the later US OIRA review of RIAs occurs after primary legislation (hence after some options may already have been mandated or prohibited in the enacted legislation). And the IAB/RSB oversight role is nested among other bodies, including the European Court of Justice, the European Court of Auditors (which reviews the budget), and the European Ombudsman (which can investigate ‘maladministration’) (Lindseth, Aman and Raul 2008; Alemanno 2009). These different approaches to the structure of oversight in the US and the EU stem in part from the different structures of governance on each side of the Atlantic. In the US, legislation begins in the Congress, a political body, which enacts statutes and can thereby create regulatory agencies and delegate tasks to these agencies. Congress often relies on the agencies’ technical expertise to determine essential issues, such as the appropriate stringency of regulation. OIRA in turn is also a highly technical body, staffed by professional experts, reporting to the President. The heads of the agencies and the head of OIRA are all appointed by the President, but, nonetheless, it is sometimes a challenge for the presidency to steer the policy direction of the agencies. Each of them has its own constituencies among the public and in Congressional committees, and some agency heads are legally shielded from being easily removed by the President (Bubb and Warren 2014). Regulatory oversight through OIRA is one means for the President to manage this multiheaded regulatory state (Kagan 2001). Thus in the US, OIRA is a politically accountable body that exercises technocratic review of regulatory power delegated by Congress to the federal agencies. In the EU, by contrast, legislation begins exclusively in the Commission, which is mainly a technical executive body, although the political accountability and authority of the Commission’s President are growing (Alemanno 2015a). (The Commission’s President is not popularly elected but rather is nominated by the European Council and elected by the European Parliament.) ‘Agencies’ such as the European Environment Agency or European Food Safety Authority exist in the EU, but are judicially barred from exercising delegated regulatory authority.6 Their main function is to engage in preparatory research and delib-

6   Although the European Court of Justice recognized the need for delegated legislation in Meroni (case 9/56, Meroni v. High Authority), it limited significantly the possibility of delegating

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Comparing regulatory oversight bodies  339 eration under Commission oversight. The Commission’s DGs (such as DG Environment) exercise regulatory power, but their proposals for legislation must be accepted by the full Commission and enacted by the Council and the Parliament. The Council is made up of the relevant ministers of the Member States – a kind of legislature composed of national-level executives – and the Parliament is composed of elected representatives, seated by party, not by Member State. The adage is that ‘the Commission proposes, the Council disposes.’ Moreover, within the Commission and its DGs, a tradition of collaborative harmony or collegiality enables the ‘College of Commissioners’ to make decisions in a consensual style. This collegiality may derive from several factors, among them the original purpose of the European Community to heal and unify the continent. This may also be related to the substantially smaller and more close-knit size of the Commission (about 25,000 staff) compared to the large US multi-agency administration (several hundred thousand staff in the civilian agencies; EPA alone has about 15,000 staff, while the Departments of Agriculture, Interior, and Transportation range from about 60,000 to 100,000 each). Hence the collegiality of the Commission stands in contrast to the more hierarchical relationship in the US executive branch between OIRA (and the White House generally) and the federal agencies it oversees. In the EU, the IAB/RSB is a multi-member body (drawn from its own DGs) that reviews proposals from its own DGs before those proposals go to the legislative branches for assent and then to the Member States for implementation. Legislation comes initially from the technical branch, and the Commission internally follows a collegial structure and style. This oversight process differs sharply from the US case where legislation comes initially from the most political branch (Congress), to be implemented through delegated power by the agencies, subject to review by the President. In the US, where the President may be held politically accountable by voters for the successes and failures of the regulatory agencies that implement Congressional statutes, OIRA is a mechanism for the presidency to manage the administrative state through technocratic expertise in a hierarchical structure (Breyer 1993; Kagan 2001). Science advisory bodies and public comment can also provide influential advice to regulators (Jasanoff 1990, Morgan and Peha 2003, Graham 1991). Neither the US OIRA nor the EU IAB has a standing external advisory body, but such an external body has been called for by some members of the Commission7 and the European Parliament.8 The addition of three ‘independent’ members to the RSB reflects this interest in external expert input. Such calls could be amplified if the European courts conduct judicial review of the EU institutions’ compliance with Better Regulation procedures.9 regulatory authority. The idea is that agency decisions should not entail any use of regulatory discretion beyond a purely technical evaluation of the applications against fixed criteria. For a critique of the ‘Meroni doctrine’ see Majone (2010). 7   Keynote Speech by Commissioner G. Verheugen, ‘Better Legislation in the EU’, delivered at the European Conference on Subsidiarity during the Austrian Presidency, 19 April 2006 (‘what we need is the independent validation of impact assessment’). 8   Report on Better Regulation in the European Union prepared by the Committee on Legal Affairs of the European Parliament (Rapporteur: Katalin Levai, 2007/2095(INI)) as a motion for an EP Resolution. See A6-0273/2007, para 6. 9   For example, in Spain v. Council (2006), the European Court of Justice held that failure to produce an IA to support a regulatory decision may lead to a violation of the ‘proportionality’

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340  Comparative administrative law

4. POWERS 4.1  Inhibiting Undesirable Policies OIRA can inhibit the adoption of policies it deems undesirable (such as those whose benefits do not ‘justify’ the costs), including by sending ‘return’ letters to the federal agencies, under EO 12291 and then EO 12866. And EO 13771 authorizes OIRA to manage its system of new-old regulatory cost offsets. Initially, unlike OIRA, the IAB had no veto power over the IAs or policy proposals from the Commission DGs. The IAB could ask the relevant DG to resubmit a revised IA. Thus, while the IAB could not formally veto a flawed IA draft, its (negative) opinion could influence the outcome of the quality control process. Then in 2010, President Barroso required new regulatory proposals to obtain a positive opinion from the IAB before going forward (European Commission 2010a), thereby giving the IAB an authority more akin to OIRA’s return letter power.10 Strikingly, although the IAB returned for resubmission only 9 percent of the DGs’ regulatory proposals in 2007, by 2010 it was returning 42 percent, and its resubmission rate ranged between 33 and 48 percent in each year from 2008 to 2014 (European Commission 2015a, Table 1). It remains to be seen how the new RSB will operate. Further, the Commission has required that new or revised legislation should draw on ex post evaluations of existing policies, through a program to evaluate ‘regulatory fitness’ called REFIT (European Commission 2014b; Alemanno 2015a). It remains to be seen how far ROBs will go in inhibiting policies they deem ­undesirable. In the US, OIRA’s formal power is limited; it can issue return letters, but under EO 12866, the agency can then appeal to a more senior administration official (such as the Vice President or the White House Chief of Staff). OIRA can also exercise significant informal power in White House and interagency policy processes (Graham 2007a; Sunstein 2013). Can the ROB go to court, or be challenged in court? In the US, courts usually do not enforce presidential executive orders against executive agencies, or hear disputes between agencies and OIRA, i.e., within the executive branch. Revesz and Livermore (2008, 172) have proposed that OIRA’s key oversight guidelines should be subject to judicial review, similar to rulemaking by regulatory agencies. US courts will require agencies to abide by Congressional statutes, which may affect regulatory oversight (including enforcing legislative requirements to conduct IA, enforcing legislative prohibitions on some types of ana­ lysis in rulemakings under some statutes, and enforcing legislative time limits on agency action notwithstanding ongoing OIRA review). The US Supreme Court has authorized agencies to conduct benefit-cost analysis under a statute using the term ‘best,’11 and has required agencies to conduct some version of benefit-cost analysis under a statute using the term ‘appropriate.’12 But these decisions interpret statutory language, not presidential EOs or OIRA guidelines. Perhaps courts should give deference to OIRA review of agency principle of EU law. See Case C-310/04, Kingdom of Spain v. Council of the European Union (2006); see Alemanno (2009). 10   This has been confirmed by the 2015 Impact Assessment Guidelines, para 3.15. 11   Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (2009). 12   Michigan v. Environmental Protection Agency, 576 U.S. ___ (2015), where the dissent also agreed that ‘reasonable’ regulation requires consideration of pros and cons.

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Comparing regulatory oversight bodies  341 benefit-cost analysis, so that, for example, a favorable OIRA review of an agency rule would help the agency survive a challenge in court asserting that the agency’s rule is ‘arbitrary’ or violates a statutory requirement such as ‘appropriate’ or ‘reasonable’ (Mendelson and Wiener 2014, 519). In the EU, the European Courts may be starting to enforce such requirements.13 Private parties are more willing to challenge the correctness of Commission IAs, and the ECJ may be ready to rely on IAs to determine a possible breach of a general principle of law, such as the principle of proportionality (Alemanno 2009). 4.2  Promoting Desirable Policies In its first two decades, OIRA did not have an institutional mechanism for using benefitcost analysis to promote desirable new regulations. Then in 2001, OIRA Administrator John Graham began to issue ‘prompt’ letters to promote desirable new policies (Graham 2007a).14 Rather than being sent in response to the regulators’ submission of a draft rule for ROB review, a ‘prompt’ letter is sent on the ROB’s own initiative, and contains a suggestion for how the regulator could improve its regulations. Such prompt letters do not mandate agency action; they only suggest a prima facie case for action based on an initial benefit-cost assessment. For example, one of OIRA’s first prompt letters was to the US Food and Drug Administration (FDA), asking FDA to advance a new rule requiring the listing of trans-fat content on the nutrition labels on packaged foods (which FDA subsequently promulgated). Yet the issuance of prompt letters by OIRA has been episodic. OIRA issued about a dozen such letters under Graham between 2001–06. There is not yet a system in place to generate prompt letters routinely, much as OIRA currently reviews agency proposals and potentially issues return letters. One option would be an external advisory body to OIRA or a new panel of the National Academy of Sciences that would generate candidate prompt letters.15 An interagency working group could play a similar role. Another option would permit outside groups to appeal to OIRA if an agency denies a petition for rulemaking (Revesz and Livermore 2008). The EU IAB’s original Mandate and Rules of Procedure also speak of ‘prompt’ letters, but, unlike in the US, they are prompts to conduct an IA, not to develop a regulation.16 IAs are required for all Commission initiatives that are likely to have significant economic, environmental or social impacts, including legislative and regulatory proposals.17 Following the establishment of the RSB, DGs are supposed to decide early in the policy planning/political validation process whether an IA is required.

13   Case C-310/04, Kingdom of Spain v. Council of the European Union (2006) (holding that failure to conduct an IA is a breach of the proportionality principle), see Alemanno (2009). 14   OIRA posts its prompt letters online at http://www.reginfo.gov/public/jsp/EO/promptLet​ ters.jsp, accessed 24 April 2016. 15   See Committee of Past Presidents, Society for Risk Analysis (SRA), Recommendations to OMB on Regulatory Review, March 16, 2009, Recommendation number 7, p. 9. 16   IAB Mandate, point 4 and Article 6 of the IAB Rules. 17   Impact Assessment Guidelines, 2015, p. 17.

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342  Comparative administrative law 4.3  Information Burdens The ROB may also oversee the administrative burden of governmental requests for information, similar to the US Paperwork Reduction Act of 1980 that created OIRA. It is also the objective of the EU’s Administrative Burden Reduction program that provides advice to many European governments. OIRA also oversees agency requests to collect information, such as through surveys. Meanwhile, the ROB may also oversee the accuracy of information produced by government agencies, as under the US Information Quality Act of 2001.18 4.4  Quality of Analysis Both OIRA and the IAB/RSB are instructed to help agencies and DGs to conduct better IAs.19 They may engage in early collaboration with agencies to develop policies that increase net benefits – rather than wait to receive the proposed rule and then critique it (Graham 2007a).20 They may act as ‘information aggregators’ to ensure that the views of all agencies are heard on each important rule (Sunstein 2013). The mission of the RSB has been widened to include major retrospective evaluation and fitness checks of existing EU policies and legislation.21

5.  RULES OF PROCEDURE The specific rules of procedure of a ROB can be important in determining its effectiveness, quality, and perceived legitimacy (Rose-Ackerman 1995). US OIRA follows rules of procedure established in EO 12866, including the timetable to review agency IAs, the transparency of OIRA’s contacts with outside parties, and the opportunity for an agency to appeal an OIRA decision. EO 12866 (1993) significantly changed OIRA’s rules of procedure, notably by requiring much greater transparency than under EO 12291 (1981). The European Commission’s IAB rules of procedure from early 2007 governed the composition and voting of the five-member IAB, the timing of reviews of IAs, transparency of IAB deliberations, and sources of internal and external expertise. The RSB established new procedures in 2016. To enhance the quality of its reports, US OIRA has guidelines for impact assessment, mainly in Circular A-4, Sept. 2003, as does the European IAB/ RSB, mainly in its IA Guidelines of 2009 and 2015. OIRA also issued guidelines for good risk analysis (jointly with Office of Science and Technology Policy [OSTP] in September

18   Information Quality Act of 2001, Pub. L. No. 106-554, § 515, codified at 44 U.S.C. 3516 (Note) (directing OMB to issue guidelines that ‘provide policy and procedural guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information . . . disseminated by Federal agencies’). OMB issued its guidelines in December 2001, see 67 Fed. Reg. 8452 (republication of Feb. 22, 2002). EO 13777 (issued on 24 February 2017) also asks agencies to identify past regulations that are inconsistent with the IQA. 19   See OIRA Circular A-4 (Sept. 2003), and the EU IAB Mandate 2005, point 6. 20   See IA Guidelines 2009; IA Guidelines 2015; IA Rules of procedure, Art. 5.3. 21   European Commission, Regulatory Scrutiny Board, Mission, tasks and staff, p. 2.

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Comparing regulatory oversight bodies  343 2007). The two polities differ on time limits, participation, appeals to higher authority, statutory deadlines, and public access to information about its reports and procedures. Many of these differences can, however, be traced to the different mandates and institutional positions of the ROBs in the two systems. Under EO 12866, OIRA review of RIA is supposed to take no more than 90 days, and has typically averaged about 50 days, but in early 2013 the average rose to more than 140 days (Copeland 2013). In the EU IAB/RSB, the time to review is 12 weeks before inter-service consultation begins. Too short a time period may make meaningful review of complex IAs difficult. But too long a time period may impose unwarranted delay on needed new rules and may undermine morale. The EU rules allow the IAB/RSB to solicit advice from outside experts, and its impact assessment system foresees a 12-week internet-based public consultation.22 OIRA can receive communications from parties outside government (so long as they are identified in its docket), and sometimes solicits peer reviewers on its own publications, but it does not seem to have the standard practice of soliciting advice from outside experts on agency RIAs. Both the IAB/RSB and OIRA engage in inter-service (or interagency) consultation on proposed rules (Sunstein 2013). EO 12866 calls for the agency proposing the rule to be invited to have a representative present whenever OIRA staff meet with an outside party about the rule. Stakeholders may seek to use OIRA review as an entry point for lobbying (Haeder and Webb-Yackee 2015). EO 12866 provides that disputes over a return letter could be appealed to a cabinet-level committee chaired by the Vice President. In the EU, no formal appeal proceeding is foreseen against an IAB/RSB opinion or SecretariatGeneral decision. In the US, a statutory deadline or a court-ordered deadline for rulemaking will force the agency to act (e.g., to publish a rule) even if OIRA has not yet completed its review. A similar constraint does not exist in the EU, where IA is conducted on the Commission’s own proposals for legislation, without such deadlines (see Alemanno 2009). In the US, agency rulemaking is already public, pursuant to the APA, with requirements for notices of proposed rulemaking, proposed rules, and final rules all to be published in the Federal Register and now also online, and opportunities for public comment to which the agency must respond. EO 12866 added transparency provisions to ensure public awareness of the OIRA process, including a record of those who met with OIRA regarding each rule. Under John Graham in 2001–06, OIRA went further than required by EO 12866 and posted all of its return letters, prompt letters, guidelines, and almost all other important documents on its public website, a practice that continued through the Obama administration.23 In the EU, the location of IAB/RSB review in the regulatory process limits its transparency. Article 16 of the IAB Rules of Procedure seemed to ensure transparency by requiring the Board to make available its draft agendas, meeting records, opinions, prompt-letters, and notes signed by the Chair on behalf of the IAB as quickly as possible to all Commission departments. At the same time, it ensures public access to the Board’s

  Impact Assessment Guidelines, 2015, p. 16.   See the OIRA website at https://www.whitehouse.gov/omb/oira, accessed 24 April 2016, and the OIRA Letters page at http://www.reginfo.gov/public/jsp/EO/letters.jsp, accessed 19 April 2017. 22 23

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344  Comparative administrative law documents by subjecting them to principles and conditions as laid down in Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents.24 Although RSB opinions must be available to all Commission services,25 they are released, through a publication on the RSB page within the Europa website, only when the Commission has adopted the corresponding legislative proposal. Thus the public does not have an opportunity to see and comment on the draft proposals and draft IAs before they are final. The internal nature of the draft IA report combined with the delayed disclosure of its final version make it difficult to determine whether the IA actually influenced the proposal, and difficult for the public to comment on the draft proposal.

6.  SCOPE OF OVERSIGHT 6.1  Timing: Ex Ante and Ex Post Both US OIRA and EU IAB/RSB have focused on ex ante impact assessment of new regulations. Both are now trying to perform retrospective ex post IAs of existing rules (through EO 13563 and the REFIT program, respectively, as discussed above). Retrospective review can be useful to identify needed policy revisions, and to assess and improve the accuracy of ex ante IAs (Harrington et al. 2000; Coglianese 2013; Sunstein 2014; OECD 2015, 119–40; Wiener 2006; Wiener 2013; Wiener and Ribeiro 2016a; Wiener and Ribeiro 2016b). 6.2  Scope of Impacts Both US and EU regulatory oversight systems seek integrated assessment of all important policy impacts, including economic, environmental and social. EO 12866 calls for attention to qualitative as well as quantitative impacts, to distributional as well as aggregate impacts, and to ancillary as well as intended impacts. Ensuring attention to ancillary impacts (both harms and benefits) is especially important to overcome agencies’ incentives to focus narrowly on their own domains, and to enable prospective and retrospective evaluation of the full portfolio of policy impacts on overall social well-being (Graham and Wiener 1995; Revesz and Livermore 2008; Wiener and Ribeiro 2016a; Wiener and Ribeiro 2016b). Some ROBs focus on reducing the administrative burden of existing rules (Renda and Castro 2016, 18); in the US, EO 13563, EO 13610 and EO 13771 emphasize reducing the burden of existing regulation, as does REFIT in the EU. Despite the widespread enthusiasm for cutting red tape, reducing administrative burdens is not always desirable. Subjecting administrative burdens to a benefit-cost test (as for other regulations) would be superior to simply cutting the administrative burden by an arbitrary amount. Regulations

24   Regulation 2001/1049 of the European Parliament and of the Council of 30 May 2001, OJ L 145, p. 43. 25   Article 6 of the IA Rules. For the RSB website, see https://ec.europa.eu/info/law/law-making-process/regulatory-scrutiny-board_en, accessed 19 April 2017.

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Comparing regulatory oversight bodies  345 imposing information collection burdens can be warranted to enable information disclosure, to support labelling rules, or to permit benefit-cost analysis itself (OECD 2007b, Hamilton 2005; Sand 2010; Wiener 2006: 500–01). The European Commission recognised this in its 2006 revised IA Guidelines (stating in Box 11 that ‘The fact that one option would impose lower administrative costs is not in itself a sufficient reason to prefer it. . . . [A] measure . . . likely to impose relatively fewer administrative costs . . . could give manufacturers less flexibility and could reduce consumer choice, [so that] its overall costs may be higher than the ‘administrative’ requirement to display data . . .’). 6.3  Topical Areas of Regulation In principle, an ROB could oversee all regulation, covering all topics. In practice, ROBs often focus on health, safety, security and environmental regulations (sometimes called ‘social regulation’ or ‘risk regulation’) while sometimes having curtailed powers or less emphasis in the area of banking, finance, competition, trade, and other ‘economic regulation.’ Expanding the ROB’s scope could bring the benefits of oversight to those areas and could also help correct the misimpression that oversight tools, such as benefit-cost ana­ lysis, are biased against the subjects of their current narrow application, such as health or the environment. Benefit-cost analysis would then be deployed to assess environmentally damaging projects such as dams, deforestation and power plants – as it had been in its early uses decades ago (Kneese 2000; Hufschmidt 2000).26 Early in the modern environmental movement, benefit-cost analysis was seen as a useful tool for environmental protection when applied to evaluate projects in the US and elsewhere.27 At the same time, expanding the scope of oversight could stretch ROBs’ capacity. And it could bring ROBs into conflict with other institutions already active in those areas. A lively debate has arisen over whether benefit-cost analysis should be required of US financial agency regulations (Coates 2015), and if so, whether it should be overseen by OIRA (Bubb 2015). In another area, OIRA could expand its mandate to oversee international treaty commitments (via impact assessments); the US State Department has proposed requiring agencies to consult with OMB/OIRA on the regulatory impacts of pending new international agreements,28 and the State Department already requires agencies to consult with OMB before making new budgetary commitments in international ­agreements.29 Section 201 of the Trade Act of 1974, 19 USC 2251(a), calls for benefit-cost analysis of trade measures, but this law has not been overseen by OIRA.30 26   See the Federal Flood Control Act of 1936 (requiring that the ‘benefits to whomsoever they may accrue are in excess of the estimated costs,’ 33 USC § 701(a)). 27   See e.g. Berkman and Viscusi (1973) (using BCA to critique federal dams); Calvert Cliffs Co-ordinating Committee v. AEC, 449 F. 2d 1109 (D.C. Cir. 1971) (finding that the Environmental IA provision in NEPA section 102(2)(C) requires benefit-cost analysis of federal projects such as nuclear power plants, in order to take into account their previously neglected environmental costs), cert denied, 404 U.S. 942 (1972). 28   71 Fed Reg 28831 (18 May 2006). 29   See 22 CFR § 181.4(e). 30   See Review of the application of EU and US Regulatory Impact Assessment Guidelines on the Analysis of Impacts on International Trade and Investment, Final Report and Conclusion, prepared by the OMB and Secretariat-General of the EU Commission.

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346  Comparative administrative law 6.4  Types of Legal Action As noted above, the IA system in the European Commission applies to proposals for legislation and regulatory acts (i.e. delegated and implementing acts), whereas the RIA system in the US occurs only after enactment of legislation at the later stage of administrative implementation (Parker and Alemanno 2015). The EU Parliament has added an IA Unit to assess amendments (although it also reviews the Commission’s IAs), and EU Member States have their own ROBs. In the US, the impacts of agency regulations are often driven by the underlying legislation, so perhaps the US Congress could create a new ROB to oversee IA of legislation proposed in the Congress. Such a system would need a screening method to select which legislative proposals warrant review, and a way to enlist locate staff with relevant expertise. 6.5  Selection of which Regulations to Review In the US, section 3(f) of EO 12866 sets a threshold for ‘economically significant,’ requiring an IA for any regulation imposing $100 million or more in impacts (and for those interfering with the plans of another agency, or raising novel legal issues). With inflation, this threshold has come to cover more rules over time (Mendelson and Wiener 2014, 483–5). In Circular A-4 (2003), OIRA added the criterion that any regulation posing an impact exceeding $1 billion should be accompanied by an IA using formal probabilistic scenarios to assess its impacts. The EU IA Guidelines do not set a quantitative threshold, but instead employ the concept of ‘proportionate analysis,’ meaning that the intensity of analysis should be greater where the potential impacts of the regulation are larger. This approach avoids potential errors or gaming around the cut-off line. OIRA and the Office of Science and Technology Policy (OSTP) endorsed the concept of proportionate analysis in 2007, saying, ‘The depth or extent of the analysis of the risks, benefits and costs associated with a decision should be commensurate with the nature and significance of the decision.’31 6.6  Analytic Methods ROBs can employ a variety of analytic methods in their reviews, and can ask agencies to use these methods in their regulatory IAs. Statutory restrictions sometimes limit the type of analysis that an agency may use in making its regulatory decisions. For example, the US Congress has in some statutes prohibited (or the courts so infer) agencies from using benefit-cost analysis in developing rules, but in other statutes Congress has required or authorized agencies to use benefit-cost analysis.32 In cases where BCA is prohibited under the statute, the agency can still prepare an RIA using BCA for OIRA review under the EO, but the agency is not supposed to refer to or base its decisions on that analysis 31   OMB/OIRA and OSTP Memorandum on Updated Principles of Risk Analysis, Sept. 19, 2007, p. 4. 32  See Whitman v. American Trucking Assns., 531 U.S. 457 (2001) (BCA prohibited); Entergy v. Riverkeeper, 556 U.S. 208 (2009) (BCA authorized); Michigan v. EPA, 576 U.S. ____, 135 S.Ct. 2699 (2015) (BCA required).

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Comparing regulatory oversight bodies  347 when it sets standards in the rule itself.33 In the early 1990s, Congress considered but did not enact a law including a ‘supermandate’ to require benefit-cost analysis in all major rulemakings notwithstanding prior statutory restrictions on such analysis. A different option would be a legislative ‘superauthorization,’ permitting but not requiring agencies to use benefit-cost analysis in major rules notwithstanding prior statutory restrictions on such analysis. This approach was taken by Congress in the 1996 amendments to the Safe Drinking Water Act, but has not been employed more broadly. In the EU, where legislation is initiated by the Commission, which has committed itself to conduct impact assessments, there are no restrictions in particular pieces of legislation on the use of impact assessments. The EU Commission’s IA Guidelines require analysis of ‘positive and negative impacts,’ without imposing any specific methodology. The 2009 Lisbon Treaty on the Functioning of the European Union, Article 191, expressly calls for analysis of benefits and costs in setting environmental standards.34

7. CONCLUSIONS As governments seek better policymaking tools, they establish Regulatory Oversight Bodies to supervise the quality of regulatory analysis and action. In the US and EU, the centralized ROBs have been structured to fit the constitutional framework of governance, and their institutional position helps shape and limit their powers and effectiveness. The US and EU have now created similar systems of RIA and ROBs, with powers to review policies and impact assessments, to return and to prompt. But differences remain between OIRA in the US and the RSB in Europe, deriving in part from the different US and EU constitutional contexts. Impact assessment in the US and the EU occurs at different stages in the policy cycle with different powers and limitations. In the US, Congress enacts statutes instructing agencies to regulate; the President then requires agencies to conduct RIAs to accompany proposed rules, and empowers OIRA, a body created by statute, to oversee rules and to review the RIAs. In the EU, the Commission conducts the IAs on its own legislative proposals, and largely for its internal use; the IAs are then reviewed by the RSB within the Commission to support its own policy decisions. Further, OIRA has a single high-level administrator and a sizable (though declining) permanent expert staff, whereas the RSB is a multi-member board with fewer staff. It took more than a year after the May 2015 announcement revising the IAB into the RSB to name the three independent members of the RSB. Meanwhile, both OIRA and the RSB are seeking to increase the role of retrospective ex post RIA, in order to evaluate actual impacts, revise

33   For example, for national ambient air quality standards under section 109 of the Clean Air Act. See Whitman v. American Trucking Assns., id, 471 n. 4. But employing BCA could actually lead to stronger protections of ambient air quality and public health than avoiding BCA, see Revesz and Livermore 2014. 34   As a result, the IA conducted by DG Environment on the Clean Air for Europe (CAFÉ) policy – the EU counterpart of the US EPA’s national ambient air quality standards – included an extensive analysis of benefits and costs that many regard as one of the best quality IAs prepared by the Commission to date. See http://ec.europa.eu/environment/archives/cafe/general/keydocs.htm, accessed 26 September 2016.

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348  Comparative administrative law existing policies, and – potentially – improve the accuracy of ex ante RIA (Wiener and Ribeiro 2016b). The emergence of ROBs in both the US and, more recently, the EU, demonstrates the transatlantic consensus on the desirability of regulatory oversight at the center of government. But, does ‘better regulation’ actually yield better regulation?35 By studying the variation in origins, structures, powers, procedures and scope, along with associated outcomes, each polity can learn from the other’s experience. Differences can be sources of insight and learning if their impacts are monitored, evaluated and shared over time. In that way, the US and EU can use the parallel development of their ROBs to engage in a ‘transatlantic policy laboratory’ that yields better regulatory results for both (Wiener and Alemanno 2015).

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35   For an appraisal of the research needs in Europe, see Alemanno 2015a. Empirical assessments of the impact of OIRA oversight, finding modest but beneficial influence, include Croley 2003 and Hahn and Muething 2003.

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Robineau, Yves and Dider Truchet (2002), Le Conseil d’Etat, Paris: PUF. Rose-Ackerman, Susan (1995), Controlling Environmental Policy: The Limits of Public Law in Germany and the United States, New Haven CT: Yale University Press. Sand, P.H. (2010), ‘Information Disclosure,’ in Jonathan B. Wiener, Michael D. Rogers, James K. Hammitt and Peter H. Sand (eds), The Reality of Precaution: Comparing Risk Regulation in the US and Europe, Washington DC: RFF Press/Earthscan/Routledge, pp. 323–60. Shapiro, Stuart (2006), ‘Politics and Regulatory Policy Analysis,’ Regulation Summer, 40–45. Smith, Adam (1976 [1776]), An Inquiry into the Nature and Causes of the Wealth of Nations, Edwin Cannan (ed.), Chicago: University of Chicago Press. Stiglitz, Joseph (1997), ‘Looking Out for the National Interest: The Principles of the Council of Economic Advisers,’ American Economic Review – Papers & Proceedings 87 (May), 109–12. Sunstein, Cass R. 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Comparing regulatory oversight bodies  351 Wiener, Jonathan B., and Alberto Alemanno (2010), ‘Comparing Regulatory Oversight Bodies across the Atlantic: The Office of Information and Regulatory Affairs in the U.S. and the Impact Assessment Board in the EU,’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, Cheltenham UK and Northampton, MA: Edward Elgar, pp. 309–35. Wiener, Jonathan B. and Alberto Alemanno (2015), ‘The Future of International Regulatory Cooperation: TTIP as a Learning Process Toward a Global Policy Laboratory,’ Law and Contemporary Problems 78, 103–36. Wiener, Jonathan B. and Daniel L. Ribeiro (2016a), ‘Impact Assessment: Diffusion and Integration,’ in Francesca Bignami and David Zaring (eds), Comparative Law and Regulation: Understanding the Global Regulatory Process, Cheltenham UK and Northampton MA: Edward Elgar. Wiener, Jonathan B. and Daniel L. Ribeiro (2016b), ‘Environmental Regulation Going Retro: Learning Foresight from Hindsight,’ Journal of Land Use & Environmental Law 32: 1–72. Wiener, Jonathan B. and Barak Richman (2010), ‘Mechanism Choice,’ in Daniel Farber and Anne Joseph O’Connell (eds), Public Choice and Public Law, Cheltenham UK and Northampton MA: Edward Elgar. Wolf, Charles (1993). Markets or Government: Choosing Between Imperfect Alternatives, 2nd ed., Cambridge MA: MIT Press.

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21.  Looking for a smarter government (and administrative law) in the age of uncertainty Giulio Napolitano

1. THE AGE OF UNCERTAINTY AND THE ASPIRATION TO A SMARTER GOVERNMENT In the first edition of Comparative Administrative Law, I analyzed the role of the state in facing the financial crisis that erupted in 2008. I focused on bailout initiatives, the stimulus packages and the regulatory reforms adopted at national and supranational level. I then proposed an institutional framework to ensure the legitimacy and accountability of the state intervention in a context of economic emergency. Finally, I identified the main challenges for comparative administrative law arising from the financial crisis (Napolitano 2010). Today, the economic and social effects of the crisis still persist. Few countries have been able to grow in absolute terms or at least to get back to the levels of welfare existing before the crisis. The most industrialized nations, in particular in Europe, experienced recession and, after that, stagnation or very low growth. Even emerging countries, like China and Brazil, greatly reduced the pace of their rise in wealth and power. The exit from the crisis, announced one year after the other, became a chimera. As a consequence, the entire world entered an age of uncertainty. If the consequences of the 2008 crisis are still heavy and long lasting, many observers forecast the potential arrival of new storms. Additional concerns arise from a very conflictual international scenario, dominated by high instability, the rise of oppressive regimes, the migrants’ crisis and ruthless terrorist attacks. All this explains why, in the last ten years, governments felt the need to equip themselves with everything that might be necessary to manage local and global risks. This has required preparing, maintaining, and fine-tuning the special tools needed to face economic, social, and security emergencies. The purpose of this new chapter, thus, is to highlight if, and to what extent, the crisis erupted in 2008 and the subsequent age of global uncertainty did change the recipes of reinventing government and administrative reform, as experienced in the previous decades. As a matter of fact, at the beginning of the 1980s, an extraordinary transformation within the public sector took place across the world. The context in which those reforms unfolded was completely different from that of the previous century. A large part of the twentieth century was dominated by an ever bigger government, with seemingly unlimited fiscal capacity. Administrative law flourished to support and constrain that big government. In the last two decades of the twentieth century, on the contrary, the age of administrative reform was characterized by the rolling back of the state, due to its fiscal crisis, the opening of markets, and the advancement of globalization (Kuhlmann and Wollman 2014; Pollitt and Bouckaert 2011; Cassese 2003). Privatization and deregulation recipes quickly spread all over the world, both in industrialized countries, which followed 352 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 352

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Looking for a smarter government in the age of uncertainty  353 the example of the US and the UK, and in developing countries, largely based on the recommendations of the World Bank. The ‘New Public Management’ intended to reform the internal organization of government by drawing inspiration from the private sector. Administrative performance began to be measured at both national and international levels (as in the case of the World Bank’s ranking on the ease of ‘Doing Business’). All these transformations were intended to respond to the crisis of public finance and to the inefficiencies of administrative management, and, more generally, to a loss of confidence in the ability of the public powers to interpret and satisfy changing collective and individual needs. This overall trend was only partially reversed in the 1990s, when a progressive political agenda abandoned the purpose of merely rolling back the state and embraced a more nuanced ‘Reinventing’ or ‘Modernizing Government’ strategy (Gore 1993; Cabinet Office and Blair 1999; Osborne and Gaebler (1992); Osborne and Plastrik (1997); RoseAckerman 1993). The explosion of the financial and economic crisis of 2008 and its long-lasting effects, however, definitely undermined the unquestioned confidence in a clear set of measures aiming to push back the state and to mimic market recipes in its management (Posner 2009; Posner 2010). In the US, a fundamental shift from minimalism to experimentalism was found in some of the most significant reforms adopted by the Obama administration (Sabel and Simon 2011). In the UK, the idea of a ‘Big Society’, destined to replace the intervention of central power with that of local communities, was soon abandoned and substituted with the ambitious search for a ‘Smarter State’ (Cameron 2015; UK Treasury 2009; Carolan 2013; Painter 2013). At the global level, the Washington consensus eroded. Even the World Bank and the Organization for Economic Cooperation and Development stressed the need to consider carefully the specific constitutional, political, social, and economical context of each country before recommending recipes for administrative reform (Pollitt 2013). While British and American influences remained significant, international analyses rewarded best practices reached in other Commonwealth countries, like Australia and New Zealand, in small European countries, like Norway, in recently authoritarian systems, like those of Korea and Singapore, and in state capitalism experiences, like in China (Micklethwait and Wooldridge 2014). It was in this changing and uncertain environment that a global search for a smarter and simpler government, able to do more (or at least the same) with less, started in the last ten years (Sunstein 2014; Noveck 2015). This chapter is organized as follows. Section 2 highlights the puzzling trends towards more and less government at the same time. Section 3 demonstrates the progressive marginalization of privatization and deregulation policies (while significant changes in regulatory techniques and in cost-benefit analysis are shown by Alemanno and Wiener in this book). Section 4 identifies different approaches to New Public Management in various jurisdictions. Section 5 focuses on the digitalization of government and the promotion of technological innovation in (and through) the public sector. Section 6 explains why administrative law institutions and their reformation provide a relevant contribution to the establishment of a smarter government. Section 7 provides some provisional conclusions.

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354  Comparative administrative law

2.  MORE AND LESS GOVERNMENT (AT THE SAME TIME) In the 1980s and the 1990s an overall trend towards the rolling back of the state clearly emerged. This was the outcome both of administrative reforms at the national level and of general transformations in economics and international relations. Internally, reforms were intended to reduce the role of government and leave room to private initiative. The public production of goods and services decreased. Public law schemes were supplanted by private law ones. Externally, the globalization of markets threw the sovereignty of the nation-state into crisis (Swann 1991; Strange 1997; Schneider and Häge 2008). As a consequence, administrative law, which was born around the modern nation state and flourished in times of ever expanding government, appeared to be seriously threatened. In the last ten years, on the contrary, the political and institutional reactions to the financial and economic crisis that erupted in 2008 induced two different and opposing strategies of more and less government at the same time: and administrative law was crucial both ways. On one side, the crisis determined a quest for an active role of governments to provide safety nets, foster economic growth, and ensure social protection. This enhanced governmental role was at the origin of the establishment of new public bodies and the development of sophisticated forms of statutory and administrative law to ensure the implementation of the programs. First, the eruption of the financial crisis required governments to purchase troubled assets and stocks in financial institutions and other major industries. Special statutory provisions authorized governmental bailout programs and operations (Sandoval 2010; Napolitano 2010). The sudden diffusion of state-owned corporations – even in countries like the US and the UK in which they were largely unknown at the national level, or had been proudly privatized – was accepted with the promise of temporary public ownership. The most impressive bailout program was adopted in the US, where 958 banks, financial services companies, and other financial institutions received bailout measures. Altogether, accounting for both the TARP and the Fannie and the Freddie bailout, $621 billion were invested, loaned, or paid out, and $689 billion returned or earned on investment.1 Second, governments adopted public spending programs to overcome recession and stagnation. In the US, at the beginning of the Obama administration, the Congress approved the American Recovery and Reinvestment Act 2009. The Act introduced several financial and fiscal stimuli, mainly focused on tax reductions, aids to specific economic sectors, social welfare expenditures, and public works programs. The implementation of these programs required intense financial and operational activities by Federal departments and agencies. To ensure the proper implementation of the program, a special Recovery Accountability and Transparency Board (RATB) developed innovative technologies and approaches for preventing and identifying fraud and abuse. A policy of public investment and fiscal expansion was promoted also by the Japanese government led by Prime Minister, Shinto Abe. The government adopted a five-year

1   P. Kiel and D. Nguyen, ‘Bailout Tracker,’ Propublica, https://projects.propublica.org/bailout/, last updated 14 September, 2016. These surprising outcomes explain the emphasis assumed by takings issues: Mahoney (2016).

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Looking for a smarter government in the age of uncertainty  355 fiscal program under the slogan. ‘Breaking free of deflation and economic ­revitalization.’ Reforms were intended to boost private-sector productivity through investment in infrastructure, technology, and human capital, and thus also increase public revenues and governance capacities. Public spending programs were announced even at the EU level. In November 2014, the European Commission adopted ‘the Investment Plan for Europe,’ with the purpose of unlocking public and private investments in the real economy. To contribute to the implementation of the Plan, the Regulation 2015/1017 established the European Fund for Strategic Investments (EFSI). Its institutional task is to support strategic investments in key areas such as infrastructure, education, research and innovation, as well as risk finance for small businesses. Third, governments strengthened social protection programs to address poverty that was caused by the crisis and to address the perception of growing insecurity emerging in the middle class. In the UK, the government upheld the importance of the values of public services, in particular that of the National Health Service (NHS). To this purpose, the Health and Social Care Act of 2012 deeply reformed the governance of the NHS, charging commissions of doctors, nurses, and other professionals with the redesign and management of the territorial health care system. In addition, the British government strengthened its commitment to active policies in favor of families most in need, for the care of abandoned children, and for the improvement of human conditions in the prisons. In the US, the Congress, supported by the Obama administration, approved the most important reform for the health care system since the 60s, the Patient Protection and Affordable Care 2010 Act. The Act established minimum standards to which insurance policies have to comply. It prevented insurance companies from denying coverage to anyone requesting it on personal conditions grounds and defined homogeneous reference prices based exclusively on age and place of residence. At the same time, the rule on individual mandates obliged each individual not covered by either a public insurance program, or one offered through an employment relationship, to sign a policy or pay a tax penalty. In order to fulfill the obligation, persons with low income were entitled to receive a subsidy. Finally, the law extended the scope of application of the public protection programs: Medicare, for the elderly, and Medicaid, for those with low incomes. The Affordable Care Act broadened administrative intermediation, giving the Department of Health and Human Services and the Independent Payment Advisory Board authority to formulate the rules and regulations that will channel consumer access to health care. The expanded administrative state required by health care reform, anyhow, is still regulatory in its essence, combining old style command and control tools, fiscal incentives and penalties with more fashionable and up to date nudging techniques. While extending the scope of their action, governments all around the world were obliged to cut public expenditure in order to ensure fiscal sustainability. The different programs adopted by governments to face the consequences of the financial and economic crisis greatly worsened the situation of the public debt even in the most virtuous countries, like Germany, UK and the Netherlands (Kickert 2012). At the same time, recession and stagnation reduced the amount of tax revenues. In Europe, the crisis increased the sovereign debt obligations of the most exposed countries, like Greece, Ireland, and Portugal, imposing the adoption of severe policies of austerity under the joint oversight of the European Commission and the International Monetary Fund (Di Mascio and Natalini

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356  Comparative administrative law 2015). In Germany, a constitutional ceiling on public debt was introduced. Drawing inspir­ ation from this example, the Fiscal Compact required European contracting states to assume similar obligations in their constitutional charters. Suddenly, liberalism appeared to be ‘resilient’ (Schmidt and Thatcher 2013) or ‘resurgent’ (Peck et al. 2012). As a consequence, almost every country adopted a comprehensive spending review policy, which necessarily provided ‘an opportunity to take a more fundamental look at the role of government in society’ (Prosser 2011). This required extraordinary levels of public service leadership to simultaneously tackle the needs for austerity and reform (Pollitt 2010). Even countries traditionally proud of the wide scope of their public sector and of the capacity of their bureaucracy, like France, were obliged to pursue a vigorous policy of public spending containment. This explains the overall diffusion of austerity measures directly affecting the dimensions and the internal organization of the public sector, such as a block on salary indexing, a decrease in the number of employees, the reorganization of central and local government, and savings in the health field and social protection. The overall outcome has been the emergence of apparently incoherent strategies, which require more and less government at the same time (Napolitano 2013). This contradiction is particularly evident in the context of the European Union. The European Commission required the full observance of public finance criteria by Member States. At the same time, it assumed that national governments should remain active players in many industrial and social policies and efficient enforcers of rules in several relevant areas, such as environment protection or migration (Schmidt and Woll 2013). At a global level, nation states lost power and influence. Financial crisis, global warming, international terrorism, and the migration emergency made clear the limits of national policies. At the same time, however, they tried to re-gain the capacity to address challenges through international regulatory cooperation (Stewart 2016). The re-launch of the G-20 represented an early effort to establish a forum for economic global governance, even if its apparent success immediately after the eruption of the financial crisis seemed to decline soon, due to internal divisions and the political and economic difficulties of the ‘BRICS’ countries – Brazil, Russian, India, China, and South Africa. Major achievements, however, were reached at the Paris climate conference held in December 2015, where 195 countries adopted the first-ever universal, legally binding global climate deal.

3.  PRIVATIZATION AND DEREGULATION AT THE MARGINS Privatization and deregulation represented the fundamental recipes of the neoliberal reforms adopted in the last two decades of the twentieth century. Both policies moved from the underlying idea that government was the problem, not the solution. The motivations of those policies were ideational and political, but the objectives were economic and administrative. At the beginning of the 1980s, the UK government launched an impressive privatization campaign. The nationalized industries within the public sector were shifted into the private sector. The UK example was followed by many other countries in West and East Europe, in Latin America and East Asia, even if not to the same extent. In the same years, the US moved towards the deregulation of many markets, in network industries and financial markets (Swann 1988). The US strategy deeply influenced the strategy of international organizations at global level and towards developing countries. The EU,

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Looking for a smarter government in the age of uncertainty  357 too, accelerated the completion of the internal market. These transformations deeply affected the foundations of administrative law, which had been built, in Europe, around the development of public institutions and enterprises taking care of the people’s needs and, in the US, around the establishment of an effective regulatory state. In the changing context emerging in the second half of the 2000s, on the contrary, privatization became ‘reluctant’: it was ‘delayed’ or put at the margins (Bortolotti and Faccio 2004; Bortolotti and Pinotti 2008). The crisis increased the distrust in private enterprises and market mechanisms, reducing the political space for privatization as a key strategy for public sector reform. At the same time, severe criticism against privatization and contracting out, as an indirect technique of delegation (Metzger 2003) and a serious threat to the respect of public values in many sensible areas (Auby 2010) emerged. Empirical researches on the 1990s and 2000s experiences showed how difficult the privatization process was. In particular, attempts to increase the private sector’s involvement in the provision of pensions and social security in Latin America and Eastern Europe indicated that privat­ izations and market mechanisms had been pushed too far (Zagha and Nankani 2005). In addition, administrative costs were not reduced, because, especially in some sectors, privatization cannot eliminate the government’s role and brings an extension of public law norms (Barak-Erez 2010; Rubin et al. 2010; Freeman 2003). In Western countries, the marginalization of privatization was due to practical reasons too. On the supply side, the public sector was not as expansive as it had been at the end of the 70s. Most of the dead wood was already cut out. On the demand side, private resources were no longer as affluent as in the past, at least within internal borders. Investments came more often from abroad, especially from Middle East and Asia. This sometimes discouraged operations which involved strategic assets of a country. A controversial story of reaction against privatization was the rise of a movement in favor of full public management of water resources and services, which gained some success in different areas of the world (Budds and McGranahan 2003). In Uruguay, a successful 2004 referendum gave the government sole authority over water management, making privatization unconstitutional: in addition, the subsequent constitutional amendment entitled users and civil society to participate in all planning, management and control of water resources (Moshman 2005). The Netherlands passed a similar law the same year, and an Italian 2011 referendum rolled back private delivery of public utilities. Skepticism towards privatization recipes was rendered more serious by the apparent rise of state capitalism, which tries to meld the powers of the state with the use of cap­ italist tools, such as listing state-owned companies on the stock market and embracing globalization. Immediately after the eruption of the crisis, state capitalism could claim the world’s most successful large economy, China, for its camp. Sovereign wealth funds too became among the most important investors around the world.2 Some European countries, like France and Italy, which, at least partially, had embraced privatization policies, decided to set up special state-owned vehicles in order to support strategic investments. In

2   In this sense, ‘the invisible hand of the market is giving way to the visible, and often authoritarian, hand of state capitalism’ (The Economist, January 21, 2012). See also Micklethwait and Wooldridge 2014.

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358  Comparative administrative law recent years, however, the inferior performance of state-owned firms emerged again (The Economist, Nov. 22, 2014).3 While privatization policy was marginalized, deregulation and market building pol­ icies apparently still played an important role in the public agenda. At the international level, the US pushed for macro-regional trade agreements both on the Transatlantic and the Pacific side to foster free trade and cross-border investments. In the EU, the internal market remained a fundamental pillar of the European architecture. However, the competition policy lost most of its vigor, if compared with the tremendous effort made in 1990 to achieve the so-called completion of the internal market. Since the 2006 Services Directive, no major and comprehensive pro-market regulation was adopted. In the last 20 years, it became clear that removing administrative barriers to entry is not sufficient to ensure effective competition and to foster economic growth. Even consumer choice can be increased only if proper measures of consumers’ empowerment are adopted. At the same time, the crisis exposed the risks of excessive deregulation. This explains the global trend towards re-regulation, especially in the financial sector. Stronger capital requirements were introduced at the global level by the Basel Committee. In the US, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 strengthened federal financial regulatory power and introduced specific provisions for the liquidation of banks that are determined by the Secretary to pose a systemic risk to the economy. At the same time, in Europe, a new regulatory architecture was designed and soon after the so-called Banking Union was established. Finally, and more in general, even the measurement of the ‘ease of doing business,’ promoted by the World Bank was said to go ‘beyond efficiency,’ meaning that less constraints on economic activity were not treated as good in themselves.

4. NEW PUBLIC MANAGEMENT: END OF AN ERA OR RE-LAUNCH? The crisis put into question also the idea that governments could be managed like an enterprise through market mechanisms and incentives. This idea was at the basis of the so-called New Public Management (NPM): a UK approach, which rapidly gained success in many Anglo Saxon and Commonwealth countries and far beyond (East Asia included) (Hood 1995). The potential impact of NPM on administrative law was severe. Many of its traditional institutions (such as the regulation of civil service) were based on the assumption that the running of the bureaucratic machinery should be governed by principles that were opposed to those dominating in the private sector (Rose-Ackerman 1986). This explains the diffusion of the thesis that ‘administrative law will go the way of the dinosaur: eradicated by the chilly climate of economic rationalism or the meteorites of the New Public Management’ (Taggart 1999). The distrust in the market deriving from the financial crisis overwhelmed NPM doc-

3   Overall, the state-owned enterprises among the world’s top 500 firms lost between 33 and 37 percent of their value in dollars since 2007 (The Economist, State capitalism in the dock, November 22, 2014).

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Looking for a smarter government in the age of uncertainty  359 trine, raising the issue of a possible ‘end of an era’ (Levy 2010). The fundamental purposes that NPM intended to fulfill, nonetheless, are still extremely relevant in the public agenda. The promotion of efficiency in public organization and action is more then ever fundamental in the establishment of a Smarter State fiscally sustainable. As a consequence, solutions adopted in the last ten years differed around the world. Some countries opted for maintaining or revising NPM model. Others adopted reforms with only implicit NPM underpinnings. Others decided to supplement NPM recipes with transparency and anticorruption therapies (Pollitt and Bouckaert 2011; Christensen and Lægreid 2002). In Korea, regardless of whether neoliberalism has declined or not, NPM has been said to represent a ‘“die hard” legacy’ (Hong 2013). This means that it continues to inspire reforms and survived challenges. The notable persistence of its legacy depends on the acknowledgment that financial emergencies, such as the 1997 foreign currency crisis and the more recent economic downturn, could repeat themselves at any time. As a consequence, government reform, through managerial recipes, represents a surviving toolkit to cope with actual and potential crises. Another key factor is citizens’ ever-increasing demand for better quality of public service, which requires continuous efforts at downsizing and restructuring government in the name of efficiency and accountability. The UK offered the clearest example of a reinvented NPM. Here, there was no retreat from the desire for better management. The private sector was still assumed as a term of reference to stimulate innovation in government and to defeat bureaucratic and ­stakeholders’ resistance. Differently from the past, however, this did not mean that the administration is to be managed like a business. As a consequence, a more transparent framework in which entrepreneurial activity is limited and channeled was established. In order to construct a more efficient state, the private market example invites breaking the monopolistic systems in the provision of public goods and services, thus facilitating the affirmation of dynamic competition between providers and the development of innovative models. The Efficiency and Reform Group (ERG), established in the office of the Prime Minister, was asked to operate in close collaboration with the Department of the Treasury and with other ministries for the purpose of introducing efficiency, saving money and reform in the interest of the taxpayers. In order to reduce the costs of the public machine, all existing public bodies were enlisted and rationalized through oper­ ations of liquidation, merger or internalization. A revised NPM approach was followed also in the reformation of local government, which in 2009 was cut from 244 authorities to nine unitary authorities, and in devolution, with the purpose of transferring the provision of goods and services to local governments and communities. The Localism Act of 2011 broadened the legal capacity of local bodies, opening the way for greater autonomy and capacity for innovation. A special government fund aimed to award projects territorial development, whether they were presented by local governments or by communities of citizens. At the same time, to keep local tax­ ation under control, the law provided the possibility to declare a popular referendum to block excessive tax increases. Local administrations’ transparency was increased through the imposition of the obligation to publish all the data on spending, remuneration and contracts. The US path to a reformed NPM is based on more effective strategic planning and enhanced accountability and transparency. To this purpose the Congress approved the Government Performance and Results Act (GPRA) Modernization Act of 2010, which

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360  Comparative administrative law updated the GPRA enacted in 1993. The new Act created a more defined performance framework by establishing a governance structure and by better connecting plans, programs, and performance information. Following the entry into force of the new Act, on June 13, 2011, President Obama issued the Executive Order 13576 with the purpose of delivering an efficient, effective, and accountable government. The policy aim was perfectly coherent with the distinctive NPM recipe to ‘cut waste, streamline Government operations, and reinforce the performance and management reform gains.’ The purpose was to curb uncontrolled growth in contract spending, terminating poorly performing information technology projects, deploying fraud detection tools to crack down on waste, focusing agency leaders on achieving ambitious improvements in high priority areas. Finally, to ‘deliver a smarter and leaner Government’, the Administration was required to reinforce and publicize the performance and management reform gains with the establishing of a Government Accountability and Transparency Board. Continental European countries, like France and Germany, were never leading edge NPM proponents. Up to a certain extent, they always refused market-based reforms. However, in the wake of the crisis, both countries decided to adopt significant reforms, which have clear, even if implicit, NPM underpinnings. In Germany, the constitutional reform of 2009 introduced a ceiling on public debt and established that every level of government must first take charge of its spending resulting from its own functions. In addition, it provided for a comparison of administrative performance at the various levels of government. Thus, an incentive was created to achieve savings in every phase of the administrative chain also through increments of efficiency. Germany therefore placed itself at the avant garde in fiscal policies and later tried to export this regulatory model into the other European countries through the Fiscal Compact provisions. The implicit assumption of this reform is that government budgets must be treated similarly to those of private enterprise and that state and local government should operate as decentered and fully accountable agencies. A functional and managerial approach also inspired the French reform of the territorial organization. The ‘millefeuille territorial’ constituted by 101 departments, 36,700 cities, 22 regions and 2,600 intercity groups, in fact, generated fragmentation in competences and dispersion of resources. To overcome this situation, the clause of general competence for regions and departments was eliminated. The regions were reduced from 22 to 13, taking on dimensions larger and with greater competences: among these, are the creation of a regional plan for economic development and innovation, the animation of competitive clusters, the management of ports and airports and of intercity transport policy. The departments, instead, became centers for social and territorial solidarity, by carrying out missions regarding assistance of persons in need, accommodation of minors and support of full and autonomous development of human individuality. The metropolitan cities, finally, acquired a new charter and were required to exercise specific functions in matters of economic development, innovation, distribution of energy and city policy. Similar reforms aiming to reduce the number and the levels of local governments were introduced in Greece, Italy, and, up to a certain extent, in Spain. Finally, some countries supplemented NPM day-by-day measures with enhanced transparency and fight against corruption. In December 2014, Spain approved a Law on Transparency, Access to Information and Good Governance. The Law has a three-fold purpose: to expand and strengthen transparency of public activities; to recognize and

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Looking for a smarter government in the age of uncertainty  361 safeguard the right to access to information; and to establish good governance obligations for public officials, including corresponding sanctions. It provides for compulsory quarterly publication of budgetary execution, allowing for irregularities to be identified and investigated, and establishes a Transparency and Good Government Committee to administer the law. In Italy, an anti-corruption law was adopted on November 6, 2012, with the purpose of ensuring a more balanced approach towards anti-corruption policies and providing for a strengthened preventive line and enhanced accountability within public administration. The law imposes an obligation on all public institutions to adopt and apply integrity plans; a widened scope of criminal law provisions on corruptionrelated offences; enhanced integrity rules for elected officials; transparency of public expenditure; and access to information. The wide preventive framework provided by this legislative framework, however, puts significant burden on the public administration and requires considerable efforts to ensure the necessary capacity for effective implementation.

5. DIGITAL GOVERNMENT AND TECHNOLOGICAL INNOVATION IN (AND THROUGH) THE PUBLIC SECTOR A distinctive challenge for governments is to exploit the opportunity opened up through technological innovation. Addressing this challenge requires a significant departure from downsizing recipes that predominated in the 1980s and in the 1990s – a potential shift from a ‘dead’ NPM to a ‘digital governance-era’ (Dunleavy et al 2006a). Large private enterprises provide a model, as such globally competitive firms have natural incentives to use technological innovation to increase efficiency. Small- and medium-size enterprises, on the contrary, are usually more conservative. Public administrations too, not being exposed to market competition, are not driven to experiment with technological change. On the contrary, they tend to persist in their traditional way of operating. This explains why policies aiming to promote e-government and technological innovation must be pushed through top-down guidance (Gil-Garcia, Helbig, and Ojo 2014). More generally, the state may play an active role in promoting innovation, debunking the myth of a lumbering, bureaucratic state as opposed to a dynamic, innovative private sector. It can correct market failures by investing directly in research, or use the tax system to encourage businesses to do so. Further, the ‘entrepreneurial state’ can even create the markets of the future by using its vast fiscal resources to make expensive and risky, but potentially transformative, investments (Mazzucato 2013). Relevant differences, however, do exist in the way in which countries tried to establish an effective digital government (Dunleavy et al 2006b; Reddick 2010). Korea is considered a pioneer and is ranked as a world leader in e-government by the United Nations global surveys (O’Donnell and Turner 2013). Korea offered almost the full range of services assessed in the UN Surveys through a ‘true single sign-in portal.’ Korea’s public and private sector investments in broadband, semiconductors, advanced mobile phone technology and in information and communication technologies provided the foundation for its success in the delivery of e-government services. The Ministry of Public Information and Security is responsible for coordination and systems-integration

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362  Comparative administrative law between various government departments in relation to information technology (IT), managing ­government-wide IT infrastructure and e-government projects, and facilitating citizen access to online registration forms. In the last ten years, European countries too tried to reach significant advances in e-government, as the cases of France and UK clearly show. Efforts, however, were focused mainly on the internal organization of government. Unlike Korea, the development of ultra broadband lines was mainly left to market forces. In France, a government digital system was established in order to increase the degree of interoperability of services, to rationalize the existent infrastructures, and render transparent the costs of administrative actions. In addition, new public electronic services were instituted, such as access to educational and health services, online tax payment, and participation in public bids by small- and medium-size business enterprises. A specific measure of electronic public services registers the degree of participation in and satisfaction of citizen-users on the use of these new services. In the UK, the Government Digital Service is intended to drive service delivery to digital across government and provide support, advice and technical expertise for departments as they develop new digital delivery models. For this purpose, the state was transformed into a huge electronic platform: ‘Government as a Platform.’ Thus a new vision for digital government was introduced; a common core infrastructure of shared digital systems, technology and processes on which it is easy to build brilliant, user-centric government services. Through the ‘Transformation Programme,’ the 25 most important services became digital by default. The software was furnished by a plurality of small and medium businesses, instead of by large operators, in order to avoid a technological dependence on subjects with market power. A more comprehensive attempt to enhance the establishment of a Digital Government and to place the public sector at the forefront of technological innovation was made in the US. On May 23, 2012, President Obama issued a memorandum entitled ‘Building a 21st Century Digital Government.’ On that occasion, the Administration launched a comprehensive Digital Government Strategy making data publicly available, secure, and high quality and coordinated across agencies platforms. In 2014, the United States Digital Service was established in order to provide consultation to federal agencies and to improve and simplify digital services, included access to federal websites. A wider effort to bring innovation in the public sector is at the basis of Presidential Innovation Fellows (PIF) program established in 2012. Its basic idea is to attract top innovators into government in order to bring the principles, values, and practices of the innovation economy into government. Talented technologists and innovators are asked to work together with top civil-servants to tackle some of the biggest challenges and high-profile initiatives aimed at saving lives, saving taxpayer money, fueling job creation, and building the culture of entrepreneurship and innovation within government, such as a recent initiative on high performance computing. Effective digitalization, however, requires a general reframing of the most important institutions of administrative law, such as the regulation of administrative procedures, not only organizational or managerial approaches. Japan was one of the first countries in the world to adopt in 2002 an Act on the Use of Information Technology in Administrative Procedures in order to allow the completion of administrative procedures through electronic media. More recent attempts to fully integrate the use of digital technologies in

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Looking for a smarter government in the age of uncertainty  363 the regulation of administrative procedures were made in some European countries, like France, Spain and Portugal.

6. THE LOST WORLD OF ADMINISTRATIVE LAW RE-DISCOVERED The rolling back of the state in the 1980 and 1990s suggested that, after a long-lasting ‘rise,’ administrative law was going to ‘fall’ (Posner 1996). Papers about the end of public law and the crisis of administrative law flourished in every jurisdiction. These conclusions, however, were strongly opposed by other scholars, who put in evidence the emergence of re-regulation processes and the establishment of regulatory institutions that were previously unknown. As a consequence, administrative law was transformed or reinvented, not eradicated.4 From this different point of view, some scholars started to explore the new provinces of administrative law in the privatized and deregulated areas (Taggart 1997). Even the nation-states’ loss of power due to globalization did not eliminate one of their most successful legal creatures. On the contrary, through international regulatory cooperation, a global administrative law began to emerge (Kingsbury et al. 2005; Stewart 2015; Cassese 2016). All these transformations, however, might invite a conclusion recently suggested with reference to the US case: that the traditional setting of administrative law based on the regulation of administrative procedure and judicial review represented an old and somehow lost world, now superseded by a new one, based on policy management, costbenefit analysis, and regulatory review (Farber and O’Connell 2014). The persuasiveness of this thesis in relation to the US legal system cannot be discussed here. What emerges from a comparative analysis, anyhow, is that the strategies of reinventing government after the crisis did lead also to the re-discovery of the traditional world of administrative law, even if with a different toolkit. As a matter of fact, there are many significant examples of reforms aiming to modernize government and to improve their relations with citizens and relevant stakeholders, which are based on fresh looking regulations of some fundamental pillars of administrative law, as administrative procedures and judicial review. The trend towards comprehensive statutory regulations of administrative law is extending in many countries. The Netherlands was one of the first countries around the world to adopt a General Administrative Law Act (GALA). The GALA is a piece of legislation that continues to evolve, a ‘modular Act,’ enacted in different tranches. The first two major tranches of the Act entered into force on January 1, 1994. These tranches laid a solid foundation of a regulatory framework for administrative authorities that issue orders and grant interested parties the right of appeal to the administrative court. In 1998, a third tranche was enacted, mainly focused on supervision over administrative authorities. In 2009, a fourth tranche, mainly on rules concerning enforcement and, more specifically, administrative fines, was enacted. In addition, minor and major legislative proposals designed to supplement the GALA were instituted quite regularly. This means   Even if sometimes misused or abused, see Mashaw 1995–1996.

4

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364  Comparative administrative law that GALA is an ongoing legislative process, which can be easily managed to achieve short- and medium-term policy goals. Italy adopted a similar procedure, if in a less explicit and well-designed way. In 25 years since it was first enacted in 1990, the General Law on Administrative Procedure was modified several times and its length more than doubled. In 2005, a new pillar, concerning the regulation of administrative acts and related power, was added. After the eruption of the 2008 crisis, the regulation concerning the issuance of administrative authorizations and other relevant decisions was modified repeatedly to improve the ease of doing business and foster economic growth. Over-regulation and legal instability, however, run the risk of undermining regulatory effectiveness. In Spain and Portugal, too, new very broad general laws or codes on administrative procedures were adopted in 2015. The Spanish Law contains 133 articles, which merge and update previous laws and regulations on administrative procedures, digital government and better regulation. The Law provides a complete and systematic regulation of the administrative decision-making process and of the legal means through which private parties can protect their rights and interests. Its first distinctive feature is the shift towards a fully electronic management of the relationships between public authorities and private parties. The second is the regulation of the law-making powers of public authorities, which obliges them to publish a law-making plan and to open a public consultation before the adoption of any regulatory initiative. The Portuguese Code is an organic text of 202 articles, which replaces the old Act approved in 1996. Its scope is extremely wide, covering, for example, the internal functioning and the deliberative process of administrative organs, different types of administrative procedures, the regime of administrative acts and reconsideration procedures. The Code combines traditional principles, such as legality, impartiality and equality, with a managerial approach, based on criteria of efficiency, cost-savings and rapidity. Several provisions aim to promote the effective use of electronic means. The Act incorporating the Code, in addition, requires the executive to adopt guidelines on good administrative practices that should orient the action of all public administrations. Finally, in France, for the first time, the Code of the Relations Between the Public and the Administration adopted in 2015 provided an organic and comprehensive regulation of administrative procedure and action. It is divided in five books: exchanges with the administration, unilateral acts of the administration, access to administrative documents, disputes with the administration. The provisions on overseas are gathered in a final fifth book. The Code, even if mainly operating within the existing statutory and judge made rules, clarifies the legal framework and simplifies the relations between public authorities, firms and individuals. The administrative decision-making process is made coherent with the new digital technologies. The unilateral power of public authorities to withdraw or nullify previous decisions is put under a strict time limit constraint, to protect the legitimate expectations of business and citizens. Notice-and-comment and consultation procedures are extended to planning and rule-making in every field of administrative action. The adoption of the Code represents a further erosion of the old primacy of judge-made law (even if it was drawn up by the Codification commission established within the Council of State). For the first time, the core of the relations between public authorities and citizens falls under an organic statutory regulation. This way, the codification of administrative procedures is intended to confer a renewed legitimacy to the regulatory state in a time

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Looking for a smarter government in the age of uncertainty  365 of reduced competitiveness of the French economy and increasing contestation against excessive administrative burdens over citizens and firms. (See Custos in this volume.) Another fundamental pillar of administrative law, which has become pivotal in public sector reforms, is judicial review. In the last ten years, it became clear that ensuring adequate and effective legal protection against governmental abuses also encourages private investment and thus fosters economic growth. The list of countries equipped with a general law or code of administrative process enlarged. Germany, in 1960, was one of the first ones. France followed in 2000. Italy joined the group in 2010, providing a concentrated jurisdiction and accelerated procedures when relevant economic disputes are at stake. A clear trend towards enlarged access to justice in order to encourage economic initiatives and foreign investments also emerged in East Asia. In Japan, the Administrative Case Litigation Act was amended in 2004 with the purpose of putting more effective remedies for citizens’ rights and interests in place. The Act has expanded the scope of injunctive remedies, time limits of review, provisions for third-party standing, and revised trial proceedings. The Supreme Court has also interpreted the Act to provide for greater scrutiny of administrative measures. (See Kadomatsu in this volume.) In China, to overcome some of the major limits of the existing legislation, on November 2014, for the first time since its enactment, the Administrative Procedure Law was amended. Amendments aim to overcome the main obstacles for people and business to sue authorities, after the difficulties experienced in filing an administrative lawsuit in practice, in having an administrative case heard and decided without undue influence, and in enforcing a court judgment. The Act broadens the scope of admissible cases to include ownership or the right to use natural resources, confiscation and expropriation, and restriction of competition; creates notice requirements for reviewing courts; expands the personal jurisdiction of administrative courts; creates a right of confrontation; and establishes fines for administrative non-compliance. At the same time, however, the crisis made evident that the administration of justice is a scarce resource and that the protection of administrative decisions from excessive or specious legal challenges before courts can be useful to foster economic growth. This explains the emergence of an opposed trend towards a restricted or more selective access to administrative justice, especially in some western countries. In the UK, the steep rise in applications for judicial review is at the origins of recent reforms aiming to circumscribe it through substantive and financial constraints. In particular, the Criminal Justice and Courts Act of 2015 empowers courts to deny review where the outcome for the defendant would not have been different if the conduct complained of had not occurred. Such measures, even if justified on efficiency grounds, reveal ‘the government’s irritation with the impediments that review could place on pursuit of its desired policy’ (Craig 2015). In Italy too, public finance laws greatly increased the costs of access to administrative courts. This happened even in relation to areas like public-contract-tendering procedures, where EU regulations require the establishment of effective means of judicial protection, in order to ensure the full respect of freedoms of circulation and competition.5

5   Because of that, a first instance administrative court submitted the case to the European Court of Justice for a preliminary ruling. In its judgment (European Court of Justice, 6 October

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7. CONCLUSIONS The comparative survey conducted herein reveals that, in the search for a smarter government, capable of doing more (or at least the same) with less, different methods and recipes were used around the world. In every jurisdiction, the leading actor of the reinventing government process was the executive. In the US, UK and France, Presidents and Prime Ministers were directly involved in the design and in the political marketing of the reforms, unlike what happened in other countries, like Spain and Italy. Public speeches, policy documents, and governmental websites were widely used to announce, explain and monitor the reforms. The most important of them, however, were enacted through statutes approved by parliaments. This is the case in particular for major constitutional, economical and social reforms. Nonetheless, in some countries, such as Spain and Italy, legislative powers concerning administrative reforms were delegated by parliaments to executives. In other countries, the executives exercised their constitutional prerogatives to adopt secondary legislative acts (like in France, to enact simplification measures); to issue executive orders to departments and agencies (like in the US, to promote regulatory and public management reforms); to establish, merge or abolish public authorities and bodies (like in the UK). The role of the executives was further strengthened through the establishment of special commissions, bodies and boards, whose main task was to coordinate and monitor the reforms and their implementation. In reinventing government, courts play a minor role. However, they can be called on to pass or stop the most significant reforms. This is what happened in the US, where the Supreme Court was required to assess the constitutionality of the Affordable Care Act and the legitimacy of its implementing decisions. A different story is that of France. Here, the Council of State advises the executive on every relevant piece of legislation and it is delegated to prepare the draft of the various codes of existing rules. In that position, the Council of State was the leading actor in the enactment of the Code of relations between the public and the administration. Concerning the content of the reforms, an overall departure from the most extreme neoliberal therapies dominating in the 1980s and 1990s emerges even in those jurisdictions, which had most enthusiastically embraced them. Privatization and deregulation were put at the margins of the political agenda, even if still practiced in specific cases. These were supplanted by a more sophisticated approach to regulation, based on public participation and accountability, retrospective review, and cognitive sciences. A significant revision of NPM took place too. Major attention was paid to setting priorities, measuring and publicizing outcomes, enhancing transparency and accountability. Local governments were concentrated in number and specialized in tasks. The establishment of a digital government and of effective electronic services accessible to all required an 2015, C-61/14), the Court recalled that, in the absence of EU rules governing the matter, it is for each Member State to lay down the detailed rules of administrative and judicial procedures governing actions for safeguarding rights, which individuals derive from EU law. Those detailed procedural rules must, however, be no less favorable than those governing similar domestic actions (principle of equivalence) and must not render practically impossible or excessively difficult the exercise of rights conferred by EU law (principle of effectiveness).

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Looking for a smarter government in the age of uncertainty  367 overall commitment to advance the public sector at the frontier of technological innovation. A relevant reformation of administrative law too was needed to cope with all these major transformations. The financial and economic crisis was no doubt the event that precipitated a new age of administrative reforms and determined the ultimate departure from the recipes dominating in the last two decades of the 20th century. Nonetheless, corrections and adjustments had already begun, following the pendulum swing which historically characterizes the ever-changing relationships between the state and the market. In this context, the praise for a smarter government runs the risk of remaining an ambiguous formula, simply revealing the absence of a set of clearly successful measures in the reforms’ toolkit. Taking seriously the quest for a smarter government, on the contrary, would require huge investments in careful policy-making, high bureaucratic capacity, continuous digital innovation, sophisticated administrative law rules and institutions. Effective change, in any case, is slow and uncertain. Governments and bureaucracies are complex machineries, which tend to perpetuate traditions and conducts. As a consequence, the impact of many reforms is simply interstitial. Only mid-term and stable policies can produce significant effects.

REFERENCES Auby, Jean-Bernard. 2010. ‘Contracting out and “public values”: a theoretical and comparative approach’ in Rose-Ackerman and Lindseth (eds) Comparative Administrative Law. Edward Elgar, 511–23. Barak-Erez, Daphne. 2010. ‘Three questions of privatization’ in Rose-Ackerman and Lindseth (eds) Comparative Administrative Law. Edward Elgar, 494–510. Bortolotti, Bernardo, and Mara Faccio. 2004. ‘Reluctant privatization.’ No. 130.2004. Nota di Lavoro, Fondazione Eni Enrico Mattei. Bortolotti, Bernardo, and Paolo Pinotti. 2008. ‘Delayed privatization.’ Public Choice 136(3–4): 331–51. Budds, Jessica, and Gordon McGranahan. 2003. ‘Are the debates on water privatization missing the point? Experiences from Africa, Asia and Latin America.’ Environment and Urbanization 15(2): 87–114. Cabinet Office. Modernising Government Secretariat, and Tony Blair. 1999. Modernising Government. HM Stationery Office. Cameron, David. 2015. My vision for a smarter state, September 11, 2015, public speech held in Leeds. Carolan, Eoin. 2013. ‘The legitimacy of public service reform: democracy, accountability and experimentalism in the Big Society.’ Public Law 2: 240–65. Cassese, Sabino (ed.) 2016. Research Handbook on Global Administrative Law. Edward Elgar Publishing. Cassese, Sabino. 2003. ‘The age of administrative reforms’ in J. Hayward and A. Menon, (eds), Governing Europe Oxford University Press, 128–38. Christensen, Tom, and Per Lægreid (eds) 2002. New Public Management: The Transformation of Ideas and Practice. Ashgate Publishing Ltd. Craig, Paul. 2015. UK, EU and Global Administrative Law. Foundations and Challenges. Cambridge University Press. Di Mascio, Fabrizio, and Alessandro Natalini. 2015. ‘Fiscal retrenchment in southern Europe: Changing patterns of public management in Greece, Italy, Portugal and Spain.’ Public Management Review 17(1): 129–48. Dunleavy, Patrick, et al. 2006a. ‘New public management is dead—long live digital-era governance.’ Journal of Public Administration Research and Theory 16(3): 467–94. Dunleavy, Patrick, et al. 2006b. Digital Era Governance: IT Corporations, the State, and e-Government. Oxford Univeristy Press. Farber, Daniel A., and Anne Joseph O’Connell. 2014. ‘The lost world of administrative law.’ Texas Law Review 92: 1137. Freeman, Jody. 2003. ‘Extending public law norms through privatization.’ Harvard Law Review 116(5): 1285–352. Gil-Garcia, J. Ramon, Natalie Helbig, and Adegboyega Ojo. 2014. ‘Being smart: Emerging technologies and innovation in the public sector.’ Government Information Quarterly 31: I1–I8.

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368  Comparative administrative law Gore, Al. 1993. The Gore Report on Reinventing Government: Creating a Government That Works Better and Costs Less. Times Books.. Hong, Joon-Hyung. 2013. ‘NPM, “Die hard” legacy? NPM reform and administrative law in Korea.’ Public Administration and Development, Special Issue: Knowledge-Building in Asian Public Admin Research, Education, and Practice: Current Trends & Future Challenges 33(4): 311–19. Hood, Christopher. 1995. ‘The “New Public Management” in the 1980s: variations on a theme.’ Accounting, Organizations and Society 20(2): 93–109. Kickert, Walter. 2012. ‘State responses to the fiscal crisis in Britain, Germany and the Netherlands.’ Public Management Review 14(3): 299–309. Kingsbury Benedict, Nico Krisch, and Richard B. Stewart. 2005. ‘The emergence of global administrative law.’ Law & Contemporary Problems 68(3–4): 15–61. Kuhlmann, Sabine, and Hellmut Wollmann. 2014. Introduction to Comparative Public Administration: Administrative Systems and Reforms in Europe. Edward Elgar Publishing. Levy, Roger. 2010. ‘New Public Management. End of an era?’ Public Policy and Administration 25(2): 234–40. Mahoney, Julia D. 2016. ‘Takings, legitimacy, and emergency action: lessons from the financial crisis of 2008.’ George Mason Law Review 23(2): 299–318. Mashaw, Jerry. 1995–1996. ‘Reinventing government and regulatory reform: studies in the neglect and abuse of administrative law.’ University of Pittsburgh Law Review 57: 405–22. Mazzucato Mariana, 2013. The Entrepreneurial State: Debunking Public vs. Private Sector Myths. Anthem Press. Metzger, Gillian E. 2003. ‘Privatization as delegation.’ Columbia Law Review 103: 1367–502. Micklethwait, John and Adrian Wooldridge. 2014. The Fourth Revolution. The Global Race to Reinvent the State. Penguin. Moshman, Rachael. 2005. ‘The constitutional right to water in Uruguay.’ Sustainable Development Law & Policy, Winter: 65. Napolitano, Giulio. 2010. ‘The role of the state in (and after) the financial crisis: new challenges for administrative law,’ in Rose-Ackerman and Lindseth (eds) Comparative Administrative Law, Edward Elgar Publishing, 569–91. Napolitano, Giulio. 2013. ‘“This time is different” for public law too: shifts of sovereignty and power during and after the “2008–? Crisis”.’ European Review of Public Law 25(1): 43–65. Noveck, Beth Simone. 2015. Smart Citizens, Smarter State: The Technologies of Expertise and the Future of Governing. Harvard University Press. O’Donnell, Michael, and Mark Turner. 2013. ‘Leading the world: Public sector reform and e-government in Korea.’ The Economic and Labour Relations Review 24(4): 533–48. Osborne, David, and Peter Plastrik. 1997. Banishing Bureaucracy: The Five Strategies for Reinventing Government. Addison-Wesley Publishing Co. Osborne, David, and Ted Gaebler. 1992. Reinventing Government: How the Entrepreneurial Spirit is Transforming Government. Adison Wesley Public Co.. Painter, Chris. 2013. ‘The UK Coalition government: Constructing public service reform narratives.’ Public Policy and Administration 28(1): 3–20. Peck, Jamie, Nik Theodore, and Neil Brenner. 2012. ‘Neoliberalism resurgent? Market rule after the great recession.’ South Atlantic Quarterly 111(2): 265–88. Pollitt, Christopher, and Geert Bouckaert. 2011. Public Management Reform: A Comparative Analysis – New Public Management, Governance, and the Neo-Weberian State. Oxford University Press. Pollitt, Christopher (ed.) 2013. Context: The Missing Link in Public Management? Edward Elgar Publishing. Pollitt, Christopher. 2010. ‘Cuts and reforms—Public services as we move into a new era.’ Society and Economy 32(1): 17–31. Posner, Richard A. 1996. ‘The rise and fall of administrative law.’ Chicago-Kent Law Review 72: 953–63. Posner, Richard A. 2009. A Failure of Capitalism. The Crisis of ’08 and the Descent into Depression. Harvard University Press. Posner, Richard A. 2010. The Crisis of Capitalist Democracy. Harvard University Press. Prosser Tony. 2011. ‘An opportunity to take a more fundamental look at the role of government in society: the spending review as regulation.’ Public Law, 596–616. Reddick, Christopher G. (ed.) 2010. Comparative E-government. Vol. 25. Springer Science & Business Media. Rose-Ackerman, Susan, and Peter Lindseth (eds) 2010. Comparative Administrative Law. Edward Elgar Publishing. Rose-Ackerman, Susan. 1986. ‘Reforming public bureaucracy through economic incentives?’ Journal of Law, Economics, & Organization 2(1): 131–61. Rose-Ackerman, Susan. 1993. Rethinking the Progressive Agenda. Simon and Schuster. Rubin, Edward, Jody Freeman, and Martha Minow. 2010. ‘The possibilities and limitations of privatization.’ Harvard Law Review 123(4): 890–935.

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Looking for a smarter government in the age of uncertainty  369 Sabel Chuck R. and William H. Simon. 2011. ‘Minimalism and experimentalism in the administrative state.’ Georgetown Law Journal 100(1): 53–93. Sandoval, Irma E. 2010. ‘Financial crisis and bailout: legal challenges and international lessons from Mexico, Korea, and the United States’ in Rose-Ackerman and Lindseth (eds) Comparative Administrative Law. Edward Elgar Publishing. Schmidt, Vivien A., and Mark Thatcher (eds) 2013. Resilient Liberalism in Europe’s Political Economy. Cambridge University Press. Schmidt Vivien A., and Cornelia Woll. 2013. ‘The state: The bête noire of neo-liberalism or its greatest conquest?’ in Schmidt and Thatcher, Resilient Liberalism in Europe’s Political Economy, 112–41. Schneider, Volker, and Frank M. Häge. 2008. ‘Europeanization and the retreat of the state.’ Journal of European Public Policy 15(1): 1–19. Stewart, Richard B. 2015. ‘The normative dimensions and performance of global administrative law.’ International Journal of Constitutional Law 13(2): 499–506. Stewart, Richard B. 2016. State Regulatory Capacity and Administrative Law and Governance Under Globalization, Paper presented at the conference Administrative Law from the Inside Out: A Conference on Themes in the Work of Jerry Mashaw, Yale Law School October 2–3, 2015. Strange, Susan. 1997. The Retreat of the State. The Diffusion of Power in the World Economy. Cambridge, Cambridge University Press. Sunstein, Cass R. 2014. Simpler: The Future of Government. Simon and Schuster. Swann, Dennis. 1988. The Retreat of the State: Deregulation and Privatisation in the UK and US. Harvester Wheatsheaf. Swann, Dennis. 1991. The Retreat of the State. University of Michigan Press. Taggart, Michael (ed.) 1997. The Province of Administrative Law. Hart Publishing. Taggart, Michael. 1999. ‘Reinvented government, traffic lights and the convergence of public and private law. Review of Harlow and Rawlings: Law and Administration.’ Public Law: 124–38. Treasury, H.M. 2009. ‘Putting the frontline first: smarter government.’ Cm 7753: 22–5. Zagha, Roberto, and Gobind T. Nankani. 2005. Economic Growth in the 1990s: Learning from a Decade of Reform. World Bank, Washington.

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22.  Participation and expertise: judicial attitudes in comparative perspective Catherine Donnelly

Judicial review of administrative action requires courts to confront the tension between the values of public participation and expertise in administrative decision-making. This chapter examines these tensions from a comparative perspective, using the United States (US), the European Union (EU), and the United Kingdom (UK) as case studies. Administrative decision-making is of course justified in many different ways (Frug 1984). The Weberian understanding of ‘a hierarchical, professional and politically neutral public administration’ with indirect democratic legitimacy (Weber 1978 [1922], 956–1005; Bugaric 2004, 483) probably has the earliest origins. Notions of participation or ‘open public administration’ (Bugaric 2004), as well as expertise, have also been advanced as bases for administrative legitimacy. Participation and transparency, it is claimed, advance direct democratic legitimacy and in certain circumstances, deliberative decision-making processes (Hunold 2001), while expertise implies that administrative decision-making is objective and rational, immune from political and special interest influences (Majone 1996; Majone 2000). Each rationale has found favor with different commentators at different times and the question for consideration here is how the courts manage these competing claims to legitimacy. Structurally, this chapter will be straightforward: each jurisdiction—the US, EU, and UK—will be considered in turn. These jurisdictions provide interesting comparative material because the background context in each arguably frames the interaction between participation and expertise in very different ways, a process that in turn influences how courts have managed the tension between the two. Attitudes to participation and expertise have also had an impact on the way in which the courts approach process review of administrative decision-making and substantive review of administrative decisions, a topic this chapter will consider as well. Given limits of space, this chapter cannot engage in a comprehensive analysis of the tension between participation and expertise or the judicial response thereto. However, a number of very generalized and high-level observations may be made. First, this chapter suggests that courts tend to rigorously uphold any participatory obligations imposed by the legislature; however, they often show little interest in imposing such obligations themselves. Second, courts in the US and the EU have tended to be drawn to legitimacy claims which do not necessarily mirror those of the pre-existing jurisdictional framework. US courts operate in a statutory framework that—viewed comparatively at least—provides for robust pluralist participation in administrative decision-making; yet they (again viewed comparatively) seem very attracted to expertise-based decision-making. Meanwhile, EU courts operate in what many consider to be an opaque, elite, neo-corporatist paradigm, yet they often treat claims for expertise-driven decision-making with circumspection. 370 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 370

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Judicial attitudes in comparative perspective  371 Third, interestingly, although there are signals of change, the UK courts seem to regard neither participation nor expertise as providing strong legitimization for administrative decision-making and continue to operate primarily within a Weberian understanding of administration as hierarchical, professional, and politically neutral, and as merely implementing legislative policy. Fourth, and following from this, the different jurisdictions offer interesting comparative insights along a spectrum of intensity of judicial scrutiny of administrative decisionmaking. At one end of the spectrum, the US model provides a particularly useful example of what might be described as ‘expertise-forcing judicial review,’ which has been shown to have influenced administrative decision-making (Fisher, Pascual and Wagner 2015; see also Anderson 2014, 425; Meazell 2011).1 At the other end of the spectrum, consult­ ation duties have largely arisen as a product of the evolution of the doctrine of legitimate expectations, rather than due to their own perceived merit. As such, the UK has not yet fully embraced the potential for judicial review to assist in pursuing either deliberative participation or expertise-led analysis.

1.  THE UNITED STATES 1.1  Participation and Expertise in Context As compared to the EU or UK, the background context for administrative decisionmaking in the US is most squarely premised on pluralist conceptions of participatory legitimacy (Craig 1990). Federal administrative law provides a number of examples (Craig 1990, 118–224) but for present purposes the most important is the informal rulemaking procedure (notice and comment) under the Administrative Procedure Act of 1946 (APA).2 While ‘formal’ rulemaking requires trial-type proceedings and determinations based solely on the record of the proceedings,3 the informal process requires publication of the proposed rule or its substance in the Federal Register; an opportunity for public participation through submission of written comments, with or without oral ­presentation; and publication of the final rule, incorporating a concise statement of its basis and purpose, 30 days before its effective date.4 There are also a number of hybrid procedures, involving variations on notice and comment, operating pursuant to specific regulatory programs,5 but the informal rulemaking procedure remains the default regime. Notice and comment reflects, one observer has suggested, ‘an explicit embracing’ of administrative decision-making as a ‘deliberative-constitutive’ process, in which answers to complex socio-political disputes are best found through participatory processes, rather than through a search for objective, scientific data (Fisher 2007, 33, 95). 1   Other studies have been less positive, pointing to the delays that can be produced due to concerns about judicial review challenges, for example Mashaw 1994. 2   5 U.S.C. § 553. 3   5 U.S.C. §§ 556, 557. 4   5 U.S.C. § 553. 5   See, e.g., Occupational Safety and Health Act 29 U.S.C. § 655(a); Federal Water Pollution Control Act, 33 U.S.C. § 1317(a)(2); Clean Air Act 42 U.S.C. § 7607(d)(5).

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372  Comparative administrative law The nature of notice and comment rulemaking, however, has evolved over time. Originally conceived as an aid to agencies in gathering information, it became significantly more participatory over the late 1960s and 1970s onwards. This resulted from the establishment of a range of new regulatory agencies—such as the Environmental Protection Agency (‘EPA’) and the Occupational Safety and Health Administration—to protect the public from environmental and health risks (Fisher 2007, 98). The legislation establishing these agencies prioritized notice and comment rulemaking over formal rulemaking, albeit that the specific procedures were often hybridized (Fisher 2007, 99). This increased emphasis on public participation in administrative decision-making was linked to distrust of autonomous administrative expertise to achieve outcomes in the public interest, as opposed to the interests of powerful organized groups (Stewart 1975). In turn, however, there later emerged a backlash against the expansion of transparency and participation rights, which coincided with increasing calls for respecting the virtues of technocratic expertise. Specifically in the context of risk-regulation, for example, it is argued that the public cannot prioritize risk rationally (Sunstein 2002; Breyer 1993, 60–63). The debate, however, between participation and expertise has persisted. Certain commentators have pointed to empirical evidence that notice and comment can produce deliberative and informed regulatory outcomes (Cuéllar 2005) while others have argued in favor of greater politicization of administrative decision-making (Watts 2009). Meanwhile, others have argued that, notice and comment merely serves the function of compiling a record for judicial review, not securing public input (Elliott 1992, 1492). Regardless of the particulars of this debate, one thing is clear, at least from the comparative perspective of the EU and the UK: by comparison with these jurisdictions, the American debate occurs within a framework for administrative decision-making that appears to be strikingly participatory, even if it is possible to locate certain features that place greater emphasis on fostering administrative expertise. 1.2  Participation and Expertise in the Courts 1.2.1  Process review US courts have generally acknowledged notice and comment as having a twofold purpose, namely to ensure ‘meaningful public participation in the rule-making process’6 and to enable ‘the agency promulgating the rule to educate itself.’7 Ever since Vermont Yankee, courts in the US have tended not to supplement legislatively-mandated procedures8—or at least they do not admit to doing so (Metzger 2012)—and consequently, courts will not impose requirements of participation on administrative decision-making which have not been imposed by legislation. However, rightly, courts have policed compliance with preimposed procedural requirements rigorously. The courts often find the timing of notice to be important, since ‘[t]he opportunity to participate is not meaningful unless it occurs reasonably close to the time in which the Secretary makes a decision.’9 Moreover, US   Idaho Farm Bureau Fed’n v. Babbitt, 58 F. 3d 1392, 1404 (9th Cir. 1995).   Texaco, Inc. v. Federal Power Commission, 412 F. 2d 740, 744 (3d Cir. 1969). 8   Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council 435 U.S. 519 (1978). 9   58 F. 3d at 1404. 6 7

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Judicial attitudes in comparative perspective  373 courts also require the agency to divulge adequate information to make participation meaningful, to demonstrate the factual basis for a rule, and to disclose the scientific basis of the proposed rule.10 1.2.2  Substantive review In terms of substantive review of the outcome of rulemaking, the courts in the US apply a number of standards, some derived directly from the APA (notably ‘arbitrary and ­capricious’ for informal rulemaking, and ‘substantial evidence’ for formal rulemaking).11 They have also developed certain other standards, including most famously so-called ‘hard look’ review, to scrutinize the quality of administrative decision-making.12 As is well known, ‘hard look’ review emerged in the 1970s from competing understandings of the proper scope of judicial review among judges in the DC Circuit (Fisher 2007, 97, 101–7). For Judge Leventhal, an agency was required to show that it had not acted on the basis of ‘inadequate data,’13 and that it had identified the crucial facts and taken into account the different expert opinions; what mattered was ‘the reasonableness and reliability of the Administrator’s methodology,’14 By contrast, for Judge Bazelon, also on the DC Circuit, what mattered was that ‘[c]omplex questions should be resolved in the crucible of debate through the clash of informed but opposing scientific and technological viewpoints,’15 and scientific uncertainty meant that administrators had to make ­‘judgment calls,’ and possibly even act ‘in spite of uncertainty’ (Bazelon 1981). The Supreme Court effectively endorsed Judge Leventhal’s ‘hard look’ approach in the State Farm decision,16 holding that ‘[t]he agency must explain the evidence which is available, and must offer a “rational connection between the facts found and the choice made.”’17 A similarly expertise-driven focus had been evident in the earlier Benzene decision dealing with the Occupational Safety and Health Act (‘the OSH Act’), one of the hybrid rulemaking schemes mentioned above, in which the court interpreted the ­‘substantial evidence’ test to require decision-making ‘supported by a body of reputable scientific thought.’18 Since the State Farm decision, US courts generally require that ‘agencies should explain their decisions in technocratic, statutory, or scientifically driven terms, not political terms’ (Watts 2009, 6). This demand for expertise-based decision-making has even been extended recently to what has been described as ‘expertise-forcing’ on the part of the judiciary (Freeman and Vermeule 2007, 52). In Massachusetts v. EPA, the Supreme Court reviewed the EPA’s denial of a rulemaking petition that asked the EPA to regulate certain emissions   United States v. Nova Scotia Food Prods. Corp., 568 F. 2d 240, 251 (2d Cir. 1977).   5 U.S.C. § 706. 12   In certain of the hybrid schemes, however, a procedure modeled on notice and comment requires ‘substantial evidence’: 29 U.S.C. §655 (f) (OSHA); 15 U.S.C. §2058 (CPSC) 15 U.S.C. §2618 (EPA). 13   Portland Cement Ass’n v. Ruckelshaus, 486 F. 2d 375 (D.C. Cir. 1973). 14   International Harvester v. Ruckelshaus 439 F. 2d 615 (D.C. Cir. 1973) 643. 15   Id. at 652. 16   Motor Vehicle Mfrs. Ass’n of the U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 34, 50 (1983). 17   463 U.S. at 51; see also at 42. See also Judulang v. Holder 132 S.Ct. 476 (2011). 18   Industrial Union Dept AFL-CIO v. American Petroleum Institute, 448 U.S. 607, 656 (1980). 10 11

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374  Comparative administrative law from new motor vehicles that could contribute to global warming.19 In a split 5-4 decision, the Supreme Court found that the EPA had failed to provide a ‘reasoned justification for declining to form a scientific judgment.’20 Rejecting the EPA’s reliance on scientific uncertainty as a justification for not regulating, the Supreme Court stressed that, ‘[i]f the scientific uncertainty is so profound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases contribute to global warming, EPA must say so.’21 The impact of this decision was, in effect, to require the EPA to make a scientific determination of the issue (Freeman and Vermeule 2007). This obligation has not even been alleviated in the face of stark scientific uncertainty. In Stalcup v. Peabody Coal Co.,22 five equally-qualified doctors had offered opinions on whether an individual had pneumoconiosis, and an administrative judge had opted for the majority view of the five. The Seventh Circuit rejected this ‘mechanical nose count,’ and held that because a ‘scientific dispute must be resolved on scientific grounds’ the administrative law judge ‘must have a medical reason for preferring one physician’s conclusion over another’s.’23 Despite occasional indications that the focus on technocratic, expertise-led decisionmaking may be waning—as for example in the Supreme Court judgment in the Fox Television case24 (Watts 2009, 10–11; Short 2012; although contrast Armigo 2010)—there does not appear to be any enthusiasm for a retreat from expertise-led decision-making on the part of the courts (Elwood et al. 2014; Downer 2014). Moreover, an interesting observation—made by Fisher, Pascual and Wagner (2015, 1714)—is that the ‘expertise forcing’ of the courts has actually enhanced the rigor of the analysis undertaken by regulatory agencies, which analysis has in turn been incorporated into judicial review. In a comprehensive study of judicial review of decisions of the EPA on National Ambient Air Quality Standards (NAAQS), Fisher, Pascual and Wagner have suggested that a ‘constructive partnership’ has developed between the EPA and the courts, with the EPA adopting more rigorous analytical metrics in its own decision-making, which the courts have then adopted for the purpose of review (Fisher et al. 2015, 1716– 21). For example, in National Association of Manufacturers v. Environmental Protection Agency,25 the court was satisfied by the fact that the EPA had ‘considered a broad array of scientific sources, as well as the views of EPA staff and the Clean Air Scientific Advisory Committee’—acknowledging the depth of the EPA’s own analysis of expert sources—and therefore concluded that the petitioners had not identified ‘any way in which the EPA jumped the rails of reasonableness.’26 In summary, faced with what is, at least from a comparative perspective, a heavily participatory decision-making framework, US courts have been generally very keen to emphasize the significance of expertise in legitimizing administrative decision-making.

  549 U.S. 497 (2007).   549 U.S. at 534. 21  Id. 22   477 F. 3d 482 (7th Cir. 2007). 23   Id. at 484 (emphasis added). 24   F.C.C. v. Fox Television Stations, Inc. 129 S.Ct. 1800 (2009). 25   750 F.3d 921 (D.C. Cir. 2014). 26   Id. at 924. See also Centre for Biological Diversity v. Environmental Protection Agency 749 F.3d 1079 (D.C. Cir. 2014). 19 20

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Judicial attitudes in comparative perspective  375

2.  EUROPEAN UNION 2.1  Participation and Expertise in Context Turning to the EU, a quite complex picture of the relationship between participation and expertise emerges, derived from the highly-fragmented nature of EU administration. The Commission has heralded participation in decision-making as one of the principles of European governance (Commission Communication 2001, 10), building on demands in the European treaties that decisions be ‘taken as openly as possible and as closely as possible to the citizen.’27 However, the role of consultation in administrative decisionmaking in the EU is multi-faceted, not least due to the complex institutional arrangements through which administration is conducted in the EU, both ‘horizontally’ and ‘vertically.’ Horizontally, at EU level, while the Commission might be regarded as the closest parallel to an executive in UK and US thinking, governmental power is in fact distributed between the Council, Commission and Parliament in accordance, not with the classic notion of separation of powers, but with what one commentator has called its ­‘substitute’ (Jacqué 2004): the principle of ‘institutional balance.’28 Increasingly also, Union administrative action is undertaken by a complex array of Union agencies, each operating pursuant to their own specific legislative framework and procedures (Craig 2012, Ch. 6). However, much of the implementation and administration of EU law and policy is not conducted by the EU itself, but through ‘shared management,’ in which both the Commission and national administrations need to discharge their respective tasks in order to implement Union policy successfully (Committee of Independent Experts 1999; Craig 2012; Hofmann and Türk 2006, 90). The mechanisms for participation in administrative decision-making reflect these administrative complexities, operating both ­‘vertically’ and ‘horizontally.’ The primary mechanism over the years for consulting on the ‘vertical’ concerns of Member State administrations in EU decision-making has been the so-called Comitology process, the name given to the elaborate system of committees through which the Member States monitor law-making power delegated by the Council to the Commission. Since the Lisbon Treaty, Article 291 TFEU has confined the role of Comitology committees to the adoption of delegated implementing acts (Corona 2014)—namely, executive dele­ gation rather than legislative delegation—and these committees operate pursuant to Regulation 182/2011.29 Comitology has facilitated both participation and expertise; it has enabled speed and the incorporation of scientific and technical considerations into Union law-making, while also ensuring that Member States have remained involved in the Commission’s exercise of delegated normative power (Hofmann and Türk 2006, 77). Whether the members of Comitology committees actually articulate Member State views   Article 1, Treaty on European Union (TEU).   See e.g., Case C-120/06 P Fabbrica italiana accumulatori motocarri Montecchio SpA (FIAMM) and Fabbrica italiana accumulatori motocarri Montecchio Technologies LLC [2008] E.C.R. I-06513, para. 142; Case 10/56 Meroni v. High Authority [1957–58] E.C.R. 157, 173. 29   Regulation 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers. 27 28

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376  Comparative administrative law or become ‘Europeanised’ has been the subject of intense debate (Joerges and Neyer 1997; Egeberg et al. 2006); but in theory, these committees provide for a form of Member State participation in EU decision-making. Horizontally, at EU level, the Commission’s engagement with civil society and expert groups also promotes participation. In part, this occurs through treaty-mandated ad­visory bodies—such as the Economic and Social Committee (Bignami 2006) and the Committee of the Regions—which the Commission consults in the ‘social dialogue’ process that applies in those social policy areas where the EU’s competences are generally limited.30 Article 154 TFEU (formerly Article 138 EC) imposes duties to consult ­management and labor organizations about social policy, although the Treaty does not indicate which organizations should be consulted, and, in practice, the Commission has confined access to those organizations which are organized at European level, integral to Member State social structures, and representative of all the Member States as far as possible (Commission Communication 1993, para. 24; Commission Communication 1998). Participation of other groups and organizations has tended to be informal and unstructured (Obradovic and Alonso 2006). In 2002, the Commission published a Communication setting out standards for consultation, and emphasized that the organ­ izations with which it would consult would have to demonstrate the qualities of independence and transparency (Commission Communication 2002, 11–12). Interestingly, although the Commission suggested that the consultation process would grant the legislature greater scope for scrutinizing the Commission’s activities (Commission Communication 2002, 5)—for example, by making available documents summarizing the outcome of the consultation process and how it took account of the consultation responses (Commission Communication 2002, 19–22)—it stressed that it had no desire to create any legally enforceable obligations. The Commission did not wish to create the possibility of legal challenges based simply on inadequate consultation (Commission Communication 2002, 10). This provides a very sharp contrast with the situation described above in the US, where the consultation record is essential precisely for the purpose of facilitating judicial review. The Commission engages in ongoing consultation with expert groups, and has even itself expressed concern in its White Paper on European Governance as to the lack of clarity regarding ‘who is actually deciding – experts or those with political authority’ (Commission White Paper 2001, 19). Meanwhile, participation and consultation in the processes of EU agencies are dependent on the foundational legislative frameworks of the individual agencies, with Member States being granted significant decisional autonomy over some agencies (Craig 2012, 127),31 and agency procedures involving different levels of participation.32

  See, e.g., Article 13(4), TEU.   See, e.g., European Securities and Markets Authority Regulation (EU) 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority) [2010] OJ L331/84 (ESMA). 32   See, e.g., ESMA, which has obligations of public consultation on draft agency rules (Regulation 1095/2010, Article 10(1)). See also the version of notice and comment rulemaking followed by the European Aviation Safety Authority (Regulation 216/2008 on common rules in the field of civil avi­ ation and establishing a European Aviation Safety Agency [2008] OJ L79/1, Article 52). 30 31

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Judicial attitudes in comparative perspective  377 Clearly, therefore, the model of participation adopted by the EU has a different conceptual basis from that in the US: it is closer to a neo-corporatist model (Falkner 1998; Smismans 2007), which exhibits concern about unregulated access to administrative decision-making (Bignami 2006). Participation in administrative decision-making in the EU tends to be a product of deeper underpinning institutional arrangements, and manifests itself in a highly fragmented manner. 2.2  Participation and Expertise in the Courts 2.2.1  Process review Turning to the attitudes of the EU courts, judicial responses have varied depending on the particular type of participation at issue. Similar to the US courts, EU courts have been very slow to impose a duty to consult where such a duty is not otherwise required by positive law.33 Also like the US courts, the EU courts have required relatively strict adherence to any pre-imposed participatory obligations,34 although they have tempered this approach by requiring that litigants show that the procedural violation would have made a difference to the outcome.35 Perhaps given background ‘vertical’ concerns around participation of Member States in EU administrative decision-making, the Court of Justice of the European Union (‘the CJEU’) has been broadly supportive of the Comitology process—despite its lack of an explicit Treaty basis.36 In the social dialogue context, in the UEAPME case, the EU’s lower court, the General Court (then CFI), was very mindful of the role of this dialogue in promoting participation. It held that the Commission had an obligation to consider the representativeness of the parties to an agreement proposed for implementation via a Council decision, and that it was for the Council to check that the Commission had done so, on the basis that this was required by the ‘principle of democracy on which the Union is founded.’37 With respect to the role of expertise in decision-making procedures, the EU courts have been active, even to the point of scrutinizing the qualifications of proposed experts to ensure the actual existence of expertise.38 The General Court, in particular, has also sought to draw the distinction between political influence and expertise, holding for example that a political committee cannot be said to supply ‘scientific advice based on the principles of excellence, transparency and independence.’39 33   See, e.g., Case C-104/97 P Atlanta AG v. Commission [1999] E.C.R. I-6983, para. 38; Case C-258/02 P Bactria Injustriehygiene-Service Verwaltungs GmbH v. Commission [2003] E.C.R. I-15105, para. 43. 34   See, e.g., Case 2/54 Italy v. High Authority [1954-1956] E.C.R. 37, paras 7 and 9; C-378/00 Commission v. European Parliament [2003] E.C.R. 937. 35   Case C-465/02 Germany v. Commission [2005] E.C.R. 9115, para. 37. 36   Case 25/70 Einfuhr- und Vorratsstelle fur Getreide und Futtermittel v. Koster et Berodt & Co kg [1970] E.C.R. 1161, paras 9 and 10. 37   Case T-135/96 Union Européenne de l’Artisanat et des Petites et Moyennes Entreprises (UEAPME) v. Council [1998] E.C.R. 2335, para. 89. 38   Case C-269/90 Technische Universtät München v. Hauptzollamt München –Mitte [1991] E.C.R. I-5469, para. 22. 39   Case T-70/99 Alpharma Inc v. Council [2002] E.C.R. II-3495, para. 234.

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378  Comparative administrative law However, the EU courts have generally not engaged in the sort of ‘expertise-forcing’ activities that have characterized certain decisions of the US Supreme Court, or at least they have not done so as aggressively. In the Angelopharm case,40 the CJEU adopted what it subsequently characterized as a ‘purposive’ approach, finding a duty to consult a scientific committee where such a duty might be inferred from the legislation in question (the Cosmetics Directive).41 The Court noted that the Directive provided that rules governing cosmetic products should be founded on scientific and technical assessments based on the latest international research,42 such that without consultation, the ban was neither ‘fully informed’ nor did it satisfy the Directive’s requirements.43 However, when considering Angelopharm in the later Pfizer case, the General Court confined its application to those circumstances in which a procedure is unequivocal about whether consultation of experts is required.44 Here, the General Court refused to criticize the EU institutions for failing to wait for a formal scientific report on Denmark before making a regulatory decision. Most importantly however, in a statement marking a divergence of attitude from the US courts, the CJEU added that while the expert committee at issue in Pfizer had ‘scientific legitimacy,’ this ‘was not a sufficient basis for the exercise of public authority.’45 For the CJEU, prior consultation sufficed, and as one commentator noted, the CJEU was satisfied that ‘guarantees of scientific objectivity’ were in place without additional involvement of experts (Corkin 2008). 2.2.2  Substantive review In their substantive review, the EU courts will only intervene in complex decision-making where it has been ‘vitiated by a manifest error or misuse of powers,’ or where the relevant institution has ‘manifestly exceeded the limits of its discretion.’46 Manifest error will however require that the EU courts examine whether the institution has ‘examined, carefully and impartially, all the relevant facts of the individual case which support the conclusions reached.’47 Where scientific expertise in the context of risk assessment in particular is at issue, four observations are worth making. First, EU courts only appear to expect a relatively low demonstration of scientific verification. For example, in the Pfizer case—which is often cited as proof of a greater appreciation of the expertise in administrative decision-making than is normally the case by the EU courts (Fisher 2007)— the General Court accepted that a risk assessment could not be required to provide the Union institutions with ‘conclusive scientific evidence of   Case C-212/91 Angelopharm GmbH v. Freie Hansestadt Hamburg [1994] E.C.R. I-171.   Council Directive 76/768/EEC of 27 July 1976 on the approximation of the laws of the Member States relating to cosmetic products [1976] OJ L262/169. 42   Id. at Article 11. 43   [1994] E.C.R. I-171, paras 31–34. 44   Case T-13/99 Pfizer Animal Health v. Council [2002] E.C.R. II-3305, para. 262; Alpharma [2002] E.C.R. II-3495, para. 207. 45   [2002] E.C.R. II-3305, para. 201. 46   See, e.g., Case C-331/88 R. v. Ministry of Agriculture, Fisheries and Food, Ex p. Federation Européene de la Santé Animale (FEDESA) [1990] E.C.R. I-4023, para. 8. 47   Case T-483/11 Sepro Europe Ltd v. Commission, para. 40; Case C-269/90 Hauptzollamt München-Mitte v. Technische Universität München [1991] E.C.R. I-5469, para.14. 40 41

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Judicial attitudes in comparative perspective  379 the reality of the risk,’48 but added that the risk must be ‘adequately backed up by the scientific data available at the time when the measure [is] taken,’49 such that a regulatory measure could not be based solely on a ‘purely hypothetical approach to the risk.’50 The Court also indicated that the role of expert advisory committees is ‘restricted’ to answering the questions asked by the competent institution, and providing a: reasoned analysis of the relevant facts of the case in the light of current knowledge about the subject, in order to provide the institution with the factual knowledge which will enable it to take an informed decision.51

Second, and linked to this first observation, the EU courts do not require empir­ ical evidence to support risk concerns, and will accept a foundation in scientific theory (Anderson 2014). Third, when faced ‘with divergent appraisals,’ the EU institution is not required to provide a scientific reason (unlike for example the holding in the Supreme Court’s Massachusetts decision).52 Thus, where there are ‘divergent appraisals,’ traders are not ‘entitled to expect that a prohibition on administering the substances in question to animals could be based on scientific data alone.’53 The CJEU has also refused to find manifest error in circumstances in which a ban on hormonal products was motivated by a concern to allay consumer anxieties (rather than by scientific proof that those anxieties were justified).54 Fourth—and underpinning the three previous observations—the EU courts regard risk management as involving political choices, and not just scientific analysis.55 Overall, faced with a neo-corporatist model of participation, the EU courts often try to emphasize that the EU’s decision-making process provides a mechanism for participation. Moreover, while the courts clearly value the role of expertise, they do not necessarily regard it as paramount and demonstrate what has been described as an ‘ambivalence toward science’ (Anderson 2014, 431); space is left for policy-based administrative discretion.

3.  UNITED KINGDOM 3.1  Participation and Expertise in Context The basis of administration in the UK has historically been heavily dependent on a generalist, rather than specialist, civil service, constituted as a ‘permanent deliberative   Pfizer [2002] E.C.R. II-3305, para. 142.  Id., para. 144; Case C-39/03 P Commission v. Artegodan [2003] E.C.R. I-4485, para. 32. 50   Pfizer id., para.143. 51   Id., para. 197. For application of the Pfizer approach, see Anderson 2014. 52   FEDESA [1990] E.C.R. I-4023, para. 9; see also Case C-180/96 UK v. Commission [1998] E.C.R. I-2265, para. 99. 53   FEDESA id., para. 10. 54   Id., paras 9, 12, 15, 16. See also Case C-343/09 Afton Chemical Ltd v. Secretary of State for Transport, Opinion, 6 May 2010, paras 28–29, 75. 55   Case C-77/09 Gowan Comércio Internacional e Serviços Lda v. Ministero della Salute, 22 December 2010, para. 82. 48 49

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380  Comparative administrative law i­nstitution’ to address ‘complex problems’ (Fisher 2007, 68). Meanwhile, UK administrative law is often described as embodying a ‘pluralist tradition’ (Harlow and Rawlings 1997; Arthurs 1979) because it is derived from many different sources: the ‘political ­constitution’ (Tomkins 2003), convention, policy, statute, and common law. Reflecting this tradition, duties of public consultation often arise as a matter of governmental policy or by ‘­convention’ (Wade and Forsyth 2012) and in particular statutory contexts, rather than as a matter of judicially-enforceable law. For example, the Cabinet Office Code of Practice on Written Consultation56—establishing standards rather than imposing obligations of ­consultation—does not have legal force, but should generally be regarded as binding on UK government departments and their agencies, unless Ministers conclude that exceptional circumstances require a departure from it. The influences of international and EU law are increasingly apparent, with justiciable duties of consultation derived from supranational sources—such as the Aarhus Convention57 in the context of environmental decision-making—arising with ever greater frequency before UK courts. All in all, however, UK policy and legislation impose participatory obligations in an ad hoc manner, even if they are ever-more common. 3.2  Participation and Expertise in the Courts 3.2.1  Process review UK courts generally do not impose participatory obligations on administrative decisionmakers outside the context of adjudicatory decisions. Moreover, UK courts tend to view the imposition of such obligations as only within the judicial remit if the statutory framework clearly calls for them (Woolf et al. 2013). There is, in other words, no free-standing common law duty to consult.58 For example, there is no duty to consult either where a minister issues orders or directions59 or policy is formulated in the administrative sphere (Ganz 1987). In addition, courts have traditionally only imposed a duty to consult to the extent that it is required by the statute,60 even though, in other procedural contexts, they appear willing to supplement the requirements of the statutory scheme. Similarly, where a statutory provision confers a degree of flexibility as to the conduct of consultation— for instance, framing the obligation as being to ‘take such steps as [the decision-makers] consider sufficient’—‘the court should not place [decision makers] in a rigid straightjacket beyond that which the statute necessitates.’61 Courts have however imposed a duty to consult where a legitimate expectation has 56   July 2008, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/10​ 0807/file47158.pdf. 57   The Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, 25 June, 1998. 58   R. (on the application of Hillingdon LBC, Leeds City Council, Liverpool City Council, Norfolk City Council) v. Lord Chancellor, Secretary of State for Communities and Local Government [2008] EWHC 2683; [2009] C.P. Rep. 13, 38. 59   Bates v. Lord Hailsham of Marylebone [1972] 1 W.L.R. 1373. 60   Hillingdon [2008] EWHC 2683, at [38]–[39]; R. (on the application of Flatley) v. Hywel Dda University Local Health Board [2014] EWHC 2258 (Admin). 61   R. (on the application of Breckland DC v. The Boundary Committee [2009] EWCA Civ 239, at [43].

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Judicial attitudes in comparative perspective  381 arisen that consultation would take place.62 A legitimate expectation that a decisionmaker will consult arises in two situations.63 In the ‘paradigm case’ of procedural legitim­ ate expectation, the decision-maker has provided an unequivocal assurance, whether by means of an express promise or an established practice, to consult those affected or potentially affected and consequently, ordinarily, she must consult.64 In the ‘secondary case’ of procedural legitimate expectation, the decision-maker has given an assurance that an existing policy would be preserved for a specific person or group who would be substantially affected by the change and again, ordinarily, she must consult before effecting change.65 Furthermore, in more recent cases, courts have also suggested broader potential for a duty to consult, observing that a duty to consult will arise not only where there is a statutory duty and legitimate expectation, but also where a failure to consult would lead to ‘conspicuous unfairness.’66 This concept is ill defined but appears to have the potential to  significantly broaden the decisions subject to consultation duties. For instance, a duty to consult was found to arise with respect to withdrawal of a benefit previously afforded to the public.67 Interestingly, UK courts do not impose a requirement for consultation in these cases because of a concern to advance deliberation and democratic participation in administrative decision-making. Rather the focus of the courts has been on protecting the legitimate expectation, which is judicially enforceable because good administration ‘by which public bodies ought to deal straightforwardly and consistently with the public’68 generally requires that where a public authority has given a ‘plain assurance,’ the courts will hold them to that assurance.69 Thus, the concern of the UK courts is with ‘good ­administration,’ but not in the sense of participatory administration; rather it is in the sense of preventing abuse of power arising from an authority reneging without adequate justification from lawful representations and practices.70 Hence, the enhancement of participation has really been incidental to the development of the, at times, ambiguous legitimate expectation doctrine (Bell 2016). In fact, UK courts have often exhibited skepticism about the impact of participation on decision-making. Some decisions suggest concerns over the potential scope of such a duty and the difficulty of drawing a line in terms of relevant consultees,71 thereby rejecting the model of open participation found in the APA. (Indeed, UK judges have posed a question which would be entirely alien to the US paradigm, namely, ‘Are there interests which ought 62  See R. (on the application of Moseley) v. Haringey LBC [2014] UKSC 56; [2014] 1 W.L.R. 3947 [35]. 63   Bhatt Murphy [2008] EWCA Civ 755 at [27]. 64   Id. at [29]. 65   Id. at [39]. 66   R. (on the application of Plantagenet Alliance Ltd) v. Secretary of State for Justice [2014] EWHC 1662 (QB) at [84], [86] and [96]. 67   R. (on the application of LH) v. Shropshire Council [2014] EWCA Civ 404. 68   R. (on the application of Nadarajah) v. Secretary of State for the Home Department [2005] EWCA Civ 1363 [68]; Bhatt Murphy [2008] EWCA Civ 755, at [30]. 69   Bhatt Murphy [2008] EWCA Civ 755, at [28]; Coughlan [2001] Q.B. 213, at [67]. 70   Coughlan [2001] Q.B. 213, at [69]. 71   Hillingdon [2008] EWHC 2683, at [42].

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382  Comparative administrative law not to be consulted?’72) UK courts are also hesitant to impose duties to consult out of ‘separation of powers’ concerns flowing from ‘the entitlement of executive government to formulate and reformulate policy, albeit subject to such constraints as the law places upon the process and the product.’73 A system based on widespread consultation is regarded by the UK courts as potentially leading to a ‘consequent industry of legal challenges [that] would generate in its turn defensive forms of public administration.’74 That said, where the statutory scheme has imposed an obligation of consultation, the courts have not hesitated in upholding that duty rigorously and demanding evidence of a deliberative process. In addition, regardless of whether there is a legal obligation to conduct consultation, once the public body in fact undertakes consultation, it is obliged to conduct the process properly.75 The fundamental requirements of the duty of consult­ ation have been summarized by Lord Woolf: To be proper, consultation must be undertaken at a time when proposals are still at a formative stage; it must include sufficient reasons for particular proposals to allow those consulted to give intelligent consideration and an intelligent response; adequate time must be given for this purpose; and the product of consultation must be conscientiously taken into account when the ultimate decision is taken.76

3.2.2  Substantive review In terms of substantive review, UK courts have long regarded expertise as a justification for deferring to administrators;77 however, courts also define the term ‘expertise’ extremely broadly. They have, for example, exhibited reluctance to intervene in the conclusions of ‘a specialist tribunal,’78 and they have stressed that ‘[i]t is not the function of the court to enter the scientific debate.’79 Moreover, expert evidence may be rejected without evidence to contradict it where the matter is within the professional experience of the decision-maker.80 Unlike the US courts, the UK courts do not demand expertise-led decision-making, at least, not in the sense the US courts sometimes appear to do. Phrases such as ‘risk,’ ‘dangerousness’ and ‘safety’ are not regarded as factual concepts capable of hard-edged proof.81 Of course, the requirement to take into account all relevant factors in decision-making includes taking into account the advice of scientific experts; neverthe-

72   R. (on the application of BAPIO Action Ltd.) v. Secretary of State for the Home Department, [2007] EWCA Civ 1139; [2008] A.C.D. 7, at [44] (Sedley L.J.) (not discussed in the same depth in the HL). 73   BAPIO [2007] EWCA Civ 1139, at [43]. 74   Id., at [44]. 75   Coughlan [2001] Q.B. 213, at [108]; Nzolameso v. Westminster City Council [2015] UKSC 22; [2015] 2 All E.R. 942. 76   Coughlan, at [108]. 77   International Transport Roth GmbH v. Secretary of State for the Home Department [2002] EWCA Civ 158; [2003] Q.B. 728, at [87] (Laws L.J.). 78   See, e.g., R. v. Parole Board, ex parte Watson [1996] 1 W.L.R. 906, 917. 79   R. (on the application of Assisted Reproduction and Gynaecology Centre) v. Human Fertisiliation and Embryology Authority [2002] EWCA Civ 20; [2003] 1 F.C.R. 266 at [15]. 80   Ainley v. Secretary of State for the Environment [1987] J.P.L. 33. 81   R. v. Board of Trustees for the Science Museum [1993] I.C.R. 876, 882, followed in R. v. Chargot Ltd. (trading as Contract Services) [2008] UKHL 73; [2009] 1 W.L.R. 1, at [20], [21].

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Judicial attitudes in comparative perspective  383 less, if there is disagreement between the experts, UK courts do not feel it is necessary to draw a Minister’s attention to the fact that the dissenting expert is also the leading expert on the issue.82 There have certainly been indications recently that judicial review in the UK is increasingly seeking a stronger rational basis for decision-making: review for error of fact arises in certain circumstances.83 A recent interesting example is found in the case of R (on the application of Mott) v. Environment Agency, where the imposition of conditions upon a licence to fish was held irrational where the decision-maker had failed to consider whether the evidence upon which it based its decision was credible and capable of supporting the conclusions drawn from it (although the facts in this case were somewhat extreme).84 Moreover, it is generally accepted that while English law has not yet adopted proportionality review beyond the context of human rights, in substance, ‘it has stumbled towards a concept which is in significant respects similar,’ namely, variable intensity rationality review.85 Overall though, the UK courts appear to be unconvinced about the merits of participation in administrative decision-making, and they do not seem particularly attracted to the idea of specialist expertise-driven decision-making when reviewing legitimate administrative decision-making.

4. CONCLUSION This very short survey has highlighted both similarities and divergences in judicial attitudes to the tensions between participation and expertise in the three jurisdictions under review. Without pretending to offer a comprehensive analysis of the tension between participation and expertise in the US, EU, and UK, the brief overview of this chapter does permit a number of tentative observations. Across jurisdictions, courts uphold pre-imposed participatory requirements, but show little enthusiasm for imposing these requirements themselves. Faced with a strong participatory legislative framework, US courts often demand expertise-led administrative decision-making. EU courts, by contrast, faced with what many regard as an elitist neo-corporatist framework, are keen to stress the participatory elements of EU decision-making in which expertise is a very important though not a predominant requirement. In this regard, it might be tentatively suggested that these courts strive to fill legitimacy lacunae that they perceive in the underpinning legislative framework, reflecting what has been described as the ‘courts’ most fundamental objective in administrative law cases . . . to reconcile the exercise of bureaucratic power with constitution or rule of law values’ (Anderson 2014, 425). Meanwhile, in the UK, while participation is increasing in practice, expertise is assumed 82   R. (on the application of National Association of Health Stores) v. Department of Health [2005] EWCA Civ 154. 83   E v. Secretary of State for the Home Department [2004] Q.B. 1044. 84   [2015] EWHC 314 (Admin). 85   Pham v. Secretary of State for the Home Department (Open Society Justice Initiative intervening) [2015] UKSC 19; [2015] 1 W.L.R. 1591, para.105. See also Kennedy v. Charity Commission (Secretary of State for Justice intervening) [2014] UKSC 20; [2015] A.C. 455, para. 54.

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384  Comparative administrative law on the part of—rather than demanded from—administrators, and courts appear to regard neither participation nor expertise (in the sense understood by US and EU courts) as paramount. The enhanced participation that has arisen has almost arisen incidentally, by virtue of the evolution of the legitimate expectations doctrine, and in this regard, the courts have perhaps failed to embrace the more ambitious potential of judicial review to enhance administrative decision-making, through either deliberative participation or expertise-led analysis or both, albeit that there is certainly evidence that this position is evolving, as set out above. However, at present, it appears that the UK courts have yet to grapple fully with the values of participation and expertise, and in due course, may have cause to seek guidance in the approaches of their EU and US counterparts.

BIBLIOGRAPHY Anderson, C. (2014), ‘Contrasting Models of EU Administration in Judicial Review of Risk Regulation,’ Common Market Law Review 51(2), 425–55. Armigo, E. (2010), ‘Politics, Rulemaking, and Judicial Review: A Response to Professor Watts,’ Administrative Law Review 62(2), 573–82. Arthurs, H.W. (1979), ‘Rethinking Administrative Law: A Slightly Dicey Business,’ Osgoode Hall Law Journal 17, 1–45. Bazelon, D.L. (1981), ‘Science and Uncertainty: A Jurist’s View,’ Harvard Environmental Law Review 5, 209–15. Bell, J. (2016), ‘The Doctrine of Legitimate Expectations: Power-constraining or Right-conferring Legal Standard?’ Public Law 437–55. Bignami, F. (2006), ‘Rethinking Interest Representation in the European Union,’ Oxford Journal of Legal Studies 26, 439–47. Breyer, Stephen (1993), Breaking the Vicious Circle: Toward Effective Risk Regulation, Cambridge, MA: Harvard University Press. Bugaric, B. (2004), ‘Openness and Transparency in Public Administration: Challenges for Public Law,’ Wisconsin International Law Journal 22, 483–521. Commission of the European Union (1993), Commission Communication concerning the Application of the Agreement on Social Policy Presented by the Commission to the Council and to the European Parliament, COM (1993) 600 final. Commission of the European Union (1998), Commission Communication adapting and Promoting the Social Dialogue at Community Level, COM (1998) 322 final. Commission of the European Union (2001), European Governance – A White Paper, COM (2001) 428 final. Commission of the European Union (2002), Commission Communication towards a reinforced culture of consultation and dialogue – General principles and minimum standards for consultation of interested parties by the Commission, COM(2002) 704 final. Committee of Independent Experts (1999), Second Report on Reform of the Commission: Analysis of Current Practice and Proposals for Tackling Mismanagement, Irregularities and Fraud, Vol I, http://www.europarl. europa.eu/experts/pdf/rep2-1en.pdf, accessed 09 October 2016. Corona, D. (2014), ‘The Adoption of Secondary Legislation through Comitology in the EU: Some Reflections on the Regulation (EU) 182/2011 in Comparison with the Pre-Lisbon Reform,’ Theory and Practice of Legislation 2, 85–107. Corkin, J. (2008), ‘Science, Legitimacy and the Law: Regulating Risk Regulation Judiciously in the European Community,’ European Law Review 33, 359–84. Craig, Paul (1990), Public Law and Democracy in the United Kingdom and the United States of America, Oxford: Oxford University Press. Craig, Paul (2012), EU Administrative Law, 2nd ed, Oxford: Oxford University Press. Cuéllar, M.-F. (2005), ‘Rethinking Regulatory Democracy,’ Administrative Law Review 57, 411–99. Downer, Matthew P. (2014) ‘Tentative Interpretations: The Abracadabra of Administrative Rulemaking and the End of Alaska Hunters,’ Vanderbilt Law Review 67, 875. Egeberg, Morton, Guenther F. Schaefer and Jarle Trondal (2006), ‘EU Committee Governance between Intergovernmental and Union Administration’ in Egeberg, Morton (ed.) Multilevel Union Administration: The Transformation of Executive Politics in Europe, Palgrave Macmillan, 66–85. Elliott, E.D. (1992), ‘Re-Inventing Rulemaking,’ Duke Law Journal 41, 1490–96.

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Judicial attitudes in comparative perspective  385 Elwood, John P., Jeffrey C Marwell and Eric A. White (2012), ‘FCC Fox and that Other F-Word,’ Cato Supreme Court Review, 281–305. Falkner, Gerda (1998), E Social Policy in the 1990’s: Towards a Corporatist Policy Community, London: Routledge. Fisher, Elizabeth (2007), Risk Regulation and Administrative Constitutionalism, Oxford: Hart Publishing. Fisher, E., P. Pascual and W. Wagner (2015), ‘Rethinking Judicial Review of Expert Agencies,’ Texas Law Review 93, 1681–721. Freeman, J. and A. Vermeule (2007), ‘Massachusetts v. EPA: From Politics to Expertise,’ Supreme Court Review 2007, 51–110. Frug, G.E. (1984), ‘The Ideology of Bureaucracy in American Law,’ Harvard Law Review 97, 1276–388. Ganz, G. (1987), Quasi-Legislation: Recent Developments in Secondary Legislation, London: Sweet and Maxwell. Hammond, E. (2011), ‘Deference and Dialogue in Administrative Law,’ Columbia Law Review 8, 1722. Harlow, Carol and Richard Rawlings (1997), Law and Administration, 2nd ed, London: Butterworths. Hofmann, Herwig C.H. and Alexander H. Türk (2006), ‘Policy Implementation’ in Herwig C.H. Hofmann and Alexander H. Türk (eds), EU Administrative Governance, Cheltenham UK and Northampton, MA: Edward Elgar, pp. 74–114. Hunold, C. (2001), ‘Pluralism, and Democracy: Toward a Deliberative Theory of Bureaucratic Accountability,’ Governance 14, 151–67. Jacqué, J.-P. (2004), ‘The Principle of Institutional Balance,’ Common Market Law Review 41, 383–91. Joerges, C. and J. Neyer (1997), ‘From Intergovernmental Bargaining to Deliberative Political Processes: The Constitutionalisation of Comitology,’ European Law Journal 3, 273–99. Kreher, A. (1997), ‘Agencies in the European Community—A Step Towards Administrative Integration in Europe,’ Journal of European Public Policy 4, 225–45. Larsson, Torbjörn, and Jarle Trondal (2006), ‘Agenda setting in the European Commission: how the European Commission structure and influence the EU agenda’ in Hofmann, Herwig C.H. and Türk, Alexander H. (eds), EU Administrative Governance, Cheltenham, UK and Northampton, MA: Edward Elgar. Majone, Giandomenico (1996), Regulating Europe, London: Routledge. Majone, Giandomenico (2000), ‘The Credibility Crisis of Community Regulation,’ Journal of Common Market Studies 38, 273–302. Mashaw, J.L. (1994), ‘Improving the Environment of Agency Rulemaking: An Essay on Management, Games, and Accountability’ Law and Contemporary Problems 57, 185–257. Meazell, E.H. (2011), ‘Super Deference, the Science Obsession, and Judicial Review as Translation of Agency Science,’ Michigan Law Review 109, 733–84. Metzger, G.E. (2012), ‘Embracing Administrative Common Law,’ George Washington Law Review 80, 1293–370. Obradovic, Daniela and Jose Alonso (2006), ‘Good Governance Requirements Concerning the Participation of Interest Groups in EU Consultations,’ Common Market Law Review 43, 1049–85. Short, Jodi L. (2012), ‘The Political Turn in American Administrative Law: Power, Rationality and Reasons,’ Duke Law Journal 61, 1811–81. Smismans, Stijn (2007), ‘New Governance—The Solution for Active European Citizenship, or the End of Citizenship?’ Columbia Journal of European Law 13, 595–622. Stewart, R.B. (1975), ‘The Reformation of American Administrative Law,’ Harvard Law Review 88, 1667–813. Sunstein, C.R. (2002), Risk and Reason: Safety, Law and the Environment, Cambridge: Cambridge University Press. Tomkins, Adam (2003), Public Law, Oxford: Clarendon Press. Wade, Sir William and Forsyth, Christopher F. (2012), Administrative Law, 11th ed, Oxford: Oxford University Press. Watts, K.A. (2009), ‘Proposing a Place for Politics in Arbitrary and Capricious Review,’ Yale Law Journal 119, 2–85. Weber, Max (1978 [1922]), Economy and Society: An outline of Interpretive Sociology, Guenther Roth and Claus Wittich (eds), Ephraim Fischoff et al. (trans), Berkeley: University of California Press. Woolf, Lord, Jeffrey Jowell, Andrew Le Sueur, Catherine Donnelly and Ivan Hare (2013), De Smith’s Judicial Review, 7th ed, London: Sweet and Maxwell.

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PART IV ADMINISTRATIVE LITIGATION AND ADMINISTRATIVE LAW

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23.  Judicial review of questions of law: a comparative perspective Paul Craig

All systems of administrative law resolve similar issues. They elaborate tests for review of law, fact and discretion. Comparative law enables us to analyze diverse approaches to the same issue, while being mindful of legal/cultural reasons for those differences. Comparative discourse facilitates consideration of whether doctrinal variations across legal systems are relatively minor, so that the regimes do the same thing in slightly ­different ways, or whether doctrinal variants reflect deeper normative divergence. With that question in mind, this chapter focuses on judicial review of questions of law in the UK, USA, Canada and the EU. The topic is important and is fertile for comparative analysis. The analysis reveals the divergences between the legal systems, and sets out the four principal judicial strategies used. They are judicial substitution of judgment over jurisdictional legal issues; substitution of judgment by the reviewing court on all issues of law; substitution of judgment on certain legal issues and rationality review on others, where the distinguishing criterion is legislative clarity in defining the disputed term; and, finally, substitution of judgment and rationality review where the criterion for the divide is a broader range of functional considerations. Exigencies of space preclude detailed treatment of the kind found in domestic literature. However, the comparative analysis, drawing on this literature can inform debate over judicial review of law and shed light on the normative differences between the systems, as well as the efficacy of the test for review in each regime.

1.  UNITED KINGDOM 1.1  The Early Jurisprudence: Limits to Substitution of Judgment The United Kingdom courts have exercised judicial review over issues of law for at least three hundred years (Henderson 1963; Rubinstein 1965; Craig 2015, 2016). The dominant approach until the latter part of the twentieth century was the collateral fact doctrine, which was also known as the preliminary or jurisdictional fact doctrine. It was, notwithstanding its nomenclature, used to determine reviewability of questions of law as well as fact. The essence of the approach was as follows. There were certain preliminary questions that a tribunal or agency had to decide before it could proceed to the merits, such as whether it was properly constituted and whether the case was of a kind referred to in the statute. The tribunal made the initial determination, but its decision was not conclusive. If the court believed that the determination was legally erroneous then the tribunal’s 389 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 389

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390  Comparative administrative law ­conclusion was a nullity.1 If, however, the issue was classified as non-jurisdictional then the legal interpretation was for the administrative authority, unless there was an error of law on the face of the record. The key issue, which was never satisfactorily resolved for three centuries, concerned the legal issues that would be held to be jurisdictional/preliminary/collateral. The rationale for this difficulty is not hard to divine. All statutes granting power to the initial decisionmaker are predicated on certain conditions. The statute will state that if X1, X2, X3 etc. exists, then the tribunal or agency may or shall do Y: if an employee is injured in the course of employment then compensation may or shall be given. This statute contains three ‘if X’ conditions that involve legal issues concerning the meaning of employee, injury, and course of employment. More complex statutes contain a longer list of such conditions. The collateral/preliminary/jurisdictional fact doctrine was premised on the assumption that certain X conditions would be regarded as jurisdictional, with the consequence that the court would substitute judgment on the disputed term, while other X conditions would be regarded as non-jurisdictional and non-reviewable, unless the legal error was on the face of the record. The problem was that the constituent legal elements of all X factors conditioned jurisdiction. The courts repeatedly applied the test, but with scant explanation as to why a legal factor was jurisdictional/collateral in one case, but not another (Gordon 1931, 557–87.). The most sophisticated judicial attempt to solve the conundrum was unconvincing. Thus Diplock LJ2 distinguished between two situations. The first was where the tribunal’s misconstruction of the statute related to the kind of case into which it was meant to inquire. This error would go to jurisdiction and the reviewing court would substitute judgment concerning the legal term. The second situation was where the tribunal misconstrued the statutory description of the situation that the tribunal had to determine. This would, at most, be an error of law within jurisdiction, and would only be reviewable if it was on the face of the record. It was, however, impossible to draw this line with any certainty, because the definition of ‘kind’ or ‘type’ was inevitably comprised of statutory descriptions of the ‘situation’ the tribunal had to determine. The former represented the sum, the latter, the parts. Thus any summary of the kind of case into which the tribunal was intended to inquire required consideration of the situations the tribunal had to determine, consisting primarily of the statutory terms in the legislation. The distinction between kind or type on the one hand, and truth or detail or situation on the other, proved illusory (Craig 2016). There was no predictability ex ante before the court’s decision, and little ex post facto rationality to see why cases were decided differently. 1.2  The Early Jurisprudence: Tensions within the Case Law The difficulties inherent in the collateral fact doctrine were compounded because the courts sometimes applied a more limited test of review. Thus while most cases applied

  Bunbury v Fuller (1853) 9 Ex 111, 140.   Anisminic Ltd v Foreign Compensation Commission [1968] 2 QB 862, 887–905. cf. Lord Diplock’s view in Re Racal Communications Ltd [1981] AC 374. 1 2

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Judicial review of questions of law: a comparative perspective  391 this doctrine, some decisions adopted the commencement theory of jurisdiction, whereby jurisdiction was said to depend not on the truth or falsehood of the charge, but upon its nature, and was determinable at the commencement not at the conclusion of the inquiry (Craig 2016).3 Attempts at reconciliation were said to turn on differences in the legislative instrument. Thus in R v Commissioners for Special Purposes of Income Tax4 Lord Esher MR distinguished between two types of tribunal. There were tribunals which had jurisdiction if certain conditions existed but not otherwise; it was not for the inferior tribunal to rule conclusively on their existence. There could, however, be a tribunal with jurisdiction to determine whether the preliminary conditions existed; here it would be for the inferior tribunal to decide upon all the conditions. This reconciliation was, however, one of form rather than substance. It was impossible by juxtaposing the relevant legislation to determine why a case fell in one category rather than the other. All statutes say if X1, X2, X3 etc., exists, you may or shall do Y. The answer as to who should determine the meaning of X was dependent upon the theory of jurisdiction. The two groups of cases reflected different answers to that question. Lord Esher’s analysis simply reiterated ex post facto that divergence, but did not provide an ex ante tool to determine which group a case should fall into. A statute might assign the relative meaning of ‘if X’, between courts and tribunals differently in diverse areas, but this could not be determined by asking whether the statute required certain conditions to exist before a decision was reached, since statutes always did this. 1.3  The Modern Jurisprudence: Substitution of Judgment for Error of Law The modern jurisprudence dates from the House of Lords’ decision in Anisminic.5 It did not formally consign the collateral fact doctrine to history, but nonetheless broadened judicial review. It held that the courts could intervene where the tribunal should not have entered upon the inquiry, and also where having correctly begun the inquiry the tribunal misconstrued the statute so that it failed to deal with the question submitted to it, failed to take account of relevant considerations, or asked the wrong question. These criteria gave the courts far-reaching tools for judicial intervention. The potential of Anisminic became evident in Page.6 Lord Browne-Wilkinson held that Anisminic rendered obsolete the distinction between jurisdictional and non-­jurisdictional errors of law. Thenceforward, it was to be assumed ‘that Parliament had only conferred the decision making power on the basis that it was to be exercised on the correct legal basis: a misdirection in law in making the decision therefore rendered the decision ultra vires’.7 In general therefore, ‘any error of law made by an administrative tribunal or in­ferior court in reaching its decision can be quashed for error of law’.8 The constitutional foundation was said to be the ultra vires doctrine: the law applicable to a decision made   R v Bolton (1841) 1 QB 66, 72–4.   (1888) 21 QBD 313. 5   Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. 6   R v Hull University Visitor, ex parte Page [1993] AC 682. 7  Ibid., 701. 8   Ibid .,702. 3 4

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392  Comparative administrative law by a tribunal, etc., was the general law of the land, and hence it would act ultra vires if its decision was erroneous under the general law.9 It was, however, only relevant errors of law which would lead to nullity. The error of law had to affect the challenged decision, and differing presumptions existed for administrative bodies and for inferior courts (Endicott 1968). 1.4  The Modern Jurisprudence Qualified: Limits to Substitution of Judgment The general proposition that all errors of law are reviewable and that the reviewing court will substitute its judgment has been qualified. South Yorkshire Transport Ltd10 held that the reviewing court will substitute judgment on a disputed legal term, even where it is open to a range of possible meanings. However where the legal meaning chosen by the court was itself open to a spectrum of possible meanings, it would only intervene if the decision reviewed was irrational. The Supreme Court in Cart11 established a more significant limit to the test in Page for tribunals governed by the Tribunals, Courts and Enforcement Act 2007, which created a two-tier regime of adjudication distinct from the ordinary courts for many areas of administrative justice. The Supreme Court held that there must be some judicial review of such tribunal decisions, since otherwise significant errors of law could be perpetuated. It was, nonetheless, mindful of the status/expertise of the tribunals. This was reflected in the ‘restrained’ test as to when the courts would review legal issues decided by the Upper Tribunal: the claimant must show that the case raised some important point of principle or practice, or that there was some other compelling reason for the ordinary court to undertake judicial review. Page has also been affected by the Supreme Court’s decision in Jones.12 Case law prior to Anisminic provided little guidance as to the law/fact distinction, because the collateral fact doctrine applied to both. The decision in Page that all errors of law are jurisdictional meant that the distinction became more significant. There can be analytical disagreement as to whether a question should be one of law or fact,13 and as to the conclusions that follow from these labels. Thus, as Lord Hoffmann stated, ‘there are questions of fact; and there are questions of law as to which lawyers have decided that it would be inexpedient for an appellate tribunal to have to form an independent judgment’.14 This approach informed Jones. The Supreme Court held that where a specialized statutory scheme had been entrusted to the new tribunal system, it was for the Upper Tribunal to develop guidance concerning the central legal terms, so as to reduce the risk of inconsistent results by different First-tier panels. Lord Carnwath emphasized that the distinction between law and fact could be affected by policy and expediency, and that relevant

 Ibid.   R v Monopolies and Mergers Commission, ex p South Yorkshire Transport Ltd [1993] 1 WLR 23; R (on the application of BBC) v Information Tribunal [2007] 1 WLR 2583. 11   R (Cart) v Upper Tribunal [2011] UKSC 28; Eba v Advocate General for Scotland [2011] UKSC 29. 12   R (Jones) v First-tier Tribunal [2013] UKSC 19. 13   Moyna v Secretary of State for Work and Pensions [2003] 1 WLR 1929. 14   Moyna, Ibid., [44]; Lawson v Serco [2006] ICR 250, [34].  9 10

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Judicial review of questions of law: a comparative perspective  393 factors included the relative expertise of the tribunal and court. He was, moreover, willing to give interpretive weight to a tribunal’s conclusion on an issue of law.15 It remains to be seen how much interpretive weight the courts are willing to give, and what test of review is used in such instances.16 1.5  The Modern Jurisprudence: Normative Assumptions Few will shed tears over the demise of the jurisdictional fact doctrine. It is nonetheless important to consider why the courts persisted with it for so long. The implicit message in the modern case law is that the earlier jurisprudence failed to realise that the distinction between jurisdictional and non-jurisdictional legal error was unnecessary/illogical. This comforting picture of modern superiority over dated formalism is misleading. The courts adopted the jurisdictional fact doctrine or the commencement theory in part because they believed that these best incorporated a balance between judicial control and tribunal autonomy (Craig 1995). The courts did not believe that they should substitute judgment on every legal issue, nor did they feel comfortable deciding the precise meaning of all statutory conditions. They also realized that some judicial control was required. The jurisdictional fact doctrine and the commencement theory were the tools for preserving control, while giving some leeway to tribunal autonomy. These tests were defective, but we should not forget their underlying rationale.17 The approach whereby the reviewing court substitutes judgment on all issues of law has been defended academically (Gould 1970), but has also been challenged (Beatson 1984; Williams 2007; Daly 2011; Aronson 2015; Craig 2016). There is no a priori reason why the courts’ view on the legal meaning of a statutory term should always be preferred to that of the agency. It is not demanded by constitutional theory, nor is it supported by judicial practice. For 300 years the collateral fact doctrine was premised on the existence of nonjurisdictional errors of law that were only reviewed if there was an error on the face of the record. The modern approach in Page is based on the presumption that the courts’ interpretation of phrases such as ‘employee’, or ‘resources’ is necessarily to be preferred to that of the agency, and that substitution of judgment is the only way to control agency interpretations. Neither assumption is well founded. The courts’ interpretation may not necessarily be better than the agency’s, and control may be maintained through a rationality test rather than substitution of judgment. This has been recognized more recently by the Supreme Court in Cart, Jones and subsequent jurisprudence. The ultra vires principle provided the conceptual justification in Page for the proposition that all legal issues are subject to review and substitution of judgment. However Sir John Laws has cogently argued that this was a ‘fig-leaf’ to conceal the reality of

15   Jones [2013] UKSC 19, [65]; N v Advocate General for Scotland [2014] UKSC 30, [26]–[28]; Pendragon plc v Revenue and Customs Commissioners [2015] UKSC 37, [49]–[51]; AM v Secretary of State for Work and Pensions [2015] UKSC 47, [45]. 16   Revenue and Customs Commissioners v Atlantic Electronics Ltd [2013] EWCA Civ 651; Criminal Injuries Compensation Authority v First-tier Tribunal (Social Entitlement Chamber) [2014] EWCA Civ 1554; ZP (South Africa) v Secretary of State for the Home Department, 2 July 2015. 17   For a different view of the UK case law, see the structural argument in Cane 2016, Ch. 6, and the response in P. Craig, ‘Structuralism and Administrative Law: Reflections’, forthcoming.

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394  Comparative administrative law judicial intervention (Laws 1992). There was moreover a duality latent in the meaning of the ultra vires principle in Page (Craig 1998). On the one hand, it connoted the idea of presumed legislative intent, in the sense that Parliament intended that all errors of law should be open to challenge. On the other hand, it was equated with the general law of the land, including the common law. It was no longer based exclusively on legislative intent, and simply became the vehicle through which the common law courts controlled the administration.

2.  UNITED STATES OF AMERICA 2.1  Chevron Chevron18 is the modern foundation in the US for error of law, even though it was not considered especially novel at the time (Merrill 2006). It has nonetheless been cited over 7,000 times and has generated very considerable scholarship.19 The case established a two-part test for judicial review.20 When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question in issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.

The conceptual foundation for the two-part test provided by Justice Stevens was cast primarily in terms of delegation.21 If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious or manifestly contrary to the statute. Sometimes the legislative delegation to the agency is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.

Justice Stevens also made reference to agency expertise and accountability in addition to delegation (Shapiro and Fisher 2013). Thus ‘considerable weight’ should be given to agency interpretation when a decision involved reconciliation of conflicting policies, where the competing interests had not been fully resolved by Congress, and where the agency had particular expertise in the matters within its remit.22     20   21   22   18 19

Chevron USA Inc v NRDC 467 US 837 (1984). For valuable overviews: Sunstein (1990); Merrill and Hickman (2001). Chevron, n 18, 842–3. Ibid., 843–4. Ibid., 844, 865–6.

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Judicial review of questions of law: a comparative perspective  395 Scholars who later became justices of the Supreme Court rationalized Chevron in terms of Congressional intent, that is, courts deferred to agencies because of instruction from Congress. They recognized that the intent was largely fictional, based on what a hypothetical reasonable legislator might have wanted (Breyer 1986; Scalia 1989), but felt that Chevron provided a rule of law against which Congress could legislate (Scalia 1989). Chevron has appeal from a comparative law perspective. It recognizes that issues may be characterized as ‘law’ for the purposes of judicial review, but that this does not always demand substitution of judgment by the reviewing court. The recognition of agency interpretive autonomy over statutory terms, subject to control through rationality review, is an attractive feature of US law, irrespective of whether one accords primacy to delegation, expertise or political legitimacy as the rationale for the two-part test. Chevron has, however, proven problematic, as the subsequent discussion reveals. 2.2  The Relation Between Parts 1 and 2: Intentionalism v Textualism The relationship between the two parts of Chevron is central,23 since the court is the decider under part one and the overseer under part two (Strauss 2008). This relationship is determined primarily by part one of the test, because if Congress is deemed to have spoken to the meaning of the term that is determinative. There has, however, been dis­ agreement concerning the way to decide if Congress has addressed the precise meaning of the term at issue. Those who subscribe to intentionalism build on Justice Stevens’ brief footnote in Chevron, where he said that if a court employing traditional tools of statutory construction ascertained that Congress had an intention on the precise question at issue then that was the law and must be given effect.24 He viewed the ‘traditional tools of statutory construction’ broadly, taking account of general legislative history, the history of the particular legislation before the court, and its textual wording. This approach to Chevron step one was opposed by textualists, who contended that it should be limited to construction of the legislative text, to the exclusion of matters such as legislative history, and broader policy debates. Thus whereas intentionalists focus on resolvability through consideration of a broad range of factors to decide whether Congress has spoken to the question, textualists seek to confine step one to clarity, as determined by the wording of the legislative text (Scalia 1989). The tension between the contending views is exemplified in the following cases. Cardozo-Fonseca25 was concerned with whether the burden of proof standards in two statutory provisions were in substance the same, as the government contended, or whether they were different. Justice Stevens resolved the case under Chevron step one, and concluded that the tests were different. He reached this conclusion by taking account of the respective legislative texts and legislative history. Justice Scalia concurred, based on the wording of the statutes, but disagreed with Justice Stevens’ approach to step one.

23   For debate as to whether Chevron is best conceived in terms of a two-part or one-part test, see Stephenson and Vermeule 2009, and Bamberger and Strauss 2009. 24   Chevron, n 18, fn 9. 25   Immigration and Naturalization Service v Cardozo-Fonseca 480 US 421 (1986).

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396  Comparative administrative law This approach would, said Justice Scalia, lead to substitution of judgment whenever trad­ itional tools of statutory construction enabled the court to give some meaning to the disputed term, but this would make ‘deference a doctrine of desperation, authorizing courts to defer only if they would otherwise be unable to construe the enactment at issue’.26 He concluded that ‘this is not an interpretation but an evisceration of Chevron’.27 The approach in Cardozo-Fonseca can be contrasted with Rust.28 The case was concerned with whether legislation prohibiting use of federal grants for programmes where abortion was a method of family planning prevented counselling of pregnant women as to their options, including abortion. Chief Justice Rehnquist took a narrow view of Chevron step one, concluding briefly that the statute did not speak to the issues of counselling or referral. He concluded that the agency’s interpretation was permissible under step two. Justice Stevens dissented. He reached this conclusion on the basis of Chevron step one, taking into account the wording of the statutory provision, the statute as a whole, and the importance of free speech within US society. The battle between intentionalists and textualists continued into the new millennium. The preponderant view is that textualism is in the ascendancy (Pierce 1995; Jellum 2007), although one study found that legislative history was commonly used (Eskridge and Baer 2008). The interpretation accorded to Chevron step one shapes the relationship between courts and the executive. The greater the judicial role within step one, the less opportunity there will be for agency interpretation within step two. Conversely the less the judicial role within step one, the greater the opportunity for agency interpretation at step two. The implications of textualism are not, however, self-evident. There has been academic concern that textualism would cede too much interpretative authority to agencies (Popkin 1993). There has, however, also been concern voiced that textualism undermines agency autonomy, because the court will regularly conclude that the meaning is clear from the text itself and thus resolve the case at step one, even where linguistic precision does not exist (Pierce 1995). Justice Scalia, a textualist, often decided cases at step one, where others might have doubted whether the requisite linguistic precision existed (Scalia 1989). There are in reality paradoxes and tensions within both the intentionalist and text­ ualist approaches to Chevron step one. The tensions in intentionalism can be exemplified by Brown and Williamson Tobacco.29 The issue was whether the Food and Drug Administration (FDA) could denominate nicotine as a drug and regulate it. The majority opinion, delivered by Justice O’Connor, ruled against the FDA and adopted a broad view of Chevron step one. Thus in determining whether Congress had spoken to the question the court should consider the particular statutory provision within the overall statutory regime. The court should also consider: the fit between the statute under review and other related statutes; the history of tobacco-specific legislation in previous decades; prior agency practice that had denied regulatory authority over tobacco; and the likelihood that Congress would have delegated such an issue to the agency. Justice Breyer spoke for the dissent, which also decided the case on Chevron step one. The factors taken into   Ibid., 454.  Ibid. 28   Rust v Sullivan 500 US 173 (1991). 29   FDA v Brown and Williamson Tobacco Corporation 529 US 120 (2000). Compare Massachusetts v EPA 549 US 497 (2007). 26 27

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Judicial review of questions of law: a comparative perspective  397 account were not significantly different from those used by the majority. They included the statutory language, its purpose, legislative history, related statutes, and the import of prior agency denial of authority over tobacco. The premise of Chevron is that where there is no unambiguously expressed legislative intent on the precise question, the case should be resolved at step two. The majority and dissent both believed Congress had unequivocally addressed the question, but they reached sharply divergent conclusions as to the answer. There is no judicial recognition that given their divergent views of the same materials Congress might not have had an unequivocal view of the issue, so that the case should have been decided at step two. This reveals a deeper tension. Insofar as intentionalism leads the judiciary to consider a broad range of factors to decide whether Congress addressed the meaning of the term, there is greater potential for disagreement as to what those factors indicate. Judicial resolvability is not therefore indicative of Congressional clarity. There are also tensions inherent in textualism, because the very meaning of the textualist approach can vary. Thus although its proponents deprecate resort to legislative history, narrow textualist approaches seek to divine the precise meaning of the term from the linguistic/dictionary definition, while broader textualist approaches consider also the language and design of the overall statute. There are also tensions in textualism because statutory language will often be open to varying interpretations, depending upon a view of the legislative purpose and other precepts that colour statutory interpretation (Pierce 1995).30 These tensions are exemplified by Sullivan.31 The case concerned construction of the Secretary of Health powers’ under social security legislation that entitled him to make ‘proper adjustment or recovery’ where a beneficiary had received ‘more or less than the correct amount of payment’. The Secretary of Health adopted ‘netting’ regulations, whereby over and under payments in subsequent months were treated cumulatively. The claimants argued that this method of calculation was inconsistent with legislative provisions mandating that waivers of overpayment could, on certain conditions, be made. Justice Scalia wrote the majority opinion. He took a narrow textualist/­dictionary approach to the statutory terms, concluded that the legislative text did not speak unequivo­cally to the precise question, and held that the netting technique was reasonable pursuant to Chevron step two. Justice Stevens, speaking for the dissent, disagreed. He considered the provisions concerning waiver of overpayment in the context of the overall statutory purpose, and concluded that the netting regulations would defeat that purpose.32 2.3  Step Zero: Additional Complexity The new millennium witnessed further complexity, through a step zero that has to be satisfied before Chevron deference can be engaged (Sunstein 2006). In Mead33 the Court held that Chevron deference was not applicable to a tariff classification ruling by the Customs Service, because there was no indication that Congress

    32   33   30 31

See, e.g., Environmental Defense v Duke Energy Corp. 549 US 561 (2007). Sullivan v Everhart 494 US 83 (1990). Ibid., 107. US v Mead Corporation 533 US 218 (2001).

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398  Comparative administrative law intended it to have the force of law, although it might be entitled to respect according to its persuasive weight.34 An agency determination qualified for Chevron deference only when Congress delegated authority to the agency to make rules carrying the force of law, which could be shown by power to engage in formal adjudication, or notice and comment rulemaking, or by some other indication of comparable congressional intent. Justice Scalia dissented, arguing that whereas there had been a presumption of agency authority to resolve ambiguity in their governing statutes, there was now no such presumption, which the agency had to overcome by showing some affirmative legislative intent to the contrary. The new doctrine was, said Justice Scalia, unsound in principle because there was no necessary connection between the formality of the procedure and the power of the agency administering it to resolve questions of law authoritatively, and because it created an artificial incentive to engage in rulemaking. It was also unsustainable in practice, because the inclusion by the majority of ‘some other indication of compar­ able congressional intent’ so as to trigger Chevron deference would engender confusion in lower courts. Mead must be seen in the light of Barnhart.35 The plaintiff contested a Social Security Administration regulation that a claimant for disability benefits did not suffer ­‘impairment’ if the problem was not expected to last at least 12 months. The agency adopted the 12-month rule after notice-and-comment, but the agency had initially taken this view through less formal means. The Court held that the less formal measures did not preclude Chevron deference. Mead was construed as saying that Chevron deference would depend on ‘the interpretive method used and the nature of the question at issue’.36 Justice Breyer, giving the opinion of the Court, concluded that:37 In this case, the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time all indicate that Chevron provides the appropriate legal lens through which to view the legality of the Agency interpretation here at issue.

Step zero created practical problems for lower courts, which struggled to decide whether Chevron deference is warranted, more especially given the interpretation accorded to Mead in Barnhart (Bressman 2005; Sunstein 2006). The outcome will, moreover, often be the same irrespective of whether it is reached through Chevron deference, or through judicial assessment tempered by according due weight to the agency under Skidmore (Sunstein 2006). These concerns have been voiced within the Supreme Court.38 There is the further problem that the Supreme Court has used versions of deference in addition to those in Chevron and Skidmore (Eskridge and Baer 2008). There are also difficulties with step zero in terms of principle, insofar as Mead states that Chevron deference only applies to agency determinations with the force of law. The historical meaning of ‘force of law’ has been superseded in recent years (Sunstein 2006;   Pursuant to the ruling in Skidmore v Swift & Co 323 US 134 (1944).   Barnhart v Walton 535 US 212 (2002). See also Gonzales v Oregon 546 US 243 (2006). 36  Ibid., 222. 37  Ibid. 38   Department of Environmental Conservation v EPA 540 US 461, 517–518 (2004). 34 35

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Judicial review of questions of law: a comparative perspective  399 Merrill and Watts 2002). Formal agency adjudication and notice and comment rulemaking are now regarded as the primary exemplars of this test, the best explanation being that they ensure some measure of formal agency deliberation, transparency and participation. This is nonetheless problematic. The criteria for formal adjudication are narrow,39 with the consequence that an agency might feel compelled to use rulemaking. Moreover the interpretation of Mead in Barnhart marked a shift to functional criteria, cast in terms of agency expertise, the interstitial nature of the legal inquiry, etc., and away from the form through which the agency decision was made. 2.4 Rejection of the Jurisdictional/Non-Jurisdictional Divide: Avoidance of Yet Further Complexity The difficulties faced by US courts would have been further compounded if City of Arlington40 had gone the other way. The issue was whether Chevron should be held in­applicable to jurisdictional issues, which would be decided by the court itself, with no deference to agency interpretation. This was the view favoured by the dissent. The majority held that when a court reviewed an agency’s interpretation of a statute that it administered, the question was always whether the agency was within the bounds of its statutory authority. There was no dis­tinction between jurisdictional and non-jurisdictional issues. The salient question was always whether the agency had gone beyond what Congress permitted it to do, and there was no principled basis for demarcating an arbitrary subset of ‘jurisdictional’ questions from the Chevron framework. Three hundred years of UK legal history attests to the difficulty of dividing jurisdictional and non-jurisdictional issues. The view favoured by the dissent would have further exacerbated difficulties faced by lower courts as they sought to apply what would have been a new step minus one, then step zero and finally the two-part Chevron test itself.

3. CANADA The Canadian Supreme Court has ‘ebbed’ and ‘flowed’ on the test for review of error of law (L’Heureux-Dube 1997; Brown and Evans 1998, Chs. 14–15; Mullan 2003). There were remnants of reasoning in terms of jurisdictional error, but the general approach was to use varying intensities of review: correctness, reasonableness simpliciter, and patent unreasonableness. The Supreme Court in Pushpanathan41 identified factors that would be taken into account when deciding on their applicability, including: the existence or not of a privative clause; the relative expertise of the decision-maker; the purpose of the le­gislation; the contested provision; and whether the problem involved law, fact or elements of both. The Canadian approach was, therefore, ‘functional and pragmatic’. Insofar as the term jurisdictional was used it was as a label for a provision that a court   Dominion Energy Brayton Point, LLC, v EPA 443 F 3d 12 (2006).   City of Arlington, Texas v FCC 569 US ­__ (2013). 41   Pushpanathan v Canada (Minister of Citizenship and Immigration) [1998] 1 SCR 982; Dr Q v College of Physicians and Surgeons of British Columbia [2003] 1 SCR 226; Voice Construction Ltd v Construction & General Workers Union [2004] 1 SCR 609. 39 40

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400  Comparative administrative law determined must be answered correctly, in accord with the preceding approach (Huscroft 2006). The precise balance of the functional and pragmatic criteria could, however, be problematic (Mullan 2003; Keyes 2006). The leading decision is now Dunsmuir (Mullan 2008).42 It reduced the tests for review to correctness and reasonableness, abolished the distinction between reasonableness simpliciter and patent unreasonableness, and renamed the test the ‘standard of review analysis’ rather than the ‘pragmatic and functional analysis’. The correctness test connoted judicial substitution of judgment. Rationality review embraced process, how the decision was reached, its transparency and intelligibility; and substance, whether it was within the range of reasonable outcomes. Deference, construed as respect for the primary decision-maker, informed the rationality test on fact and law. The correctness test was applicable to ‘true’ jurisdictional issues, whether the tribunal had authority to make the inquiry; and questions of law that were of central importance for the legal system and outside the agency’s area of expertise, such as issues of constitutional interpretation, or the jurisdictional divide between two agencies. Rationality review would be appropriate where there was a privative clause; the tribunal had expertise over a discrete administrative regime; the review was of fact or discretion; or there was an issue of law that did not warrant correctness review, because the factual and legal issues were closely intertwined, and/or where the agency was interpreting its own statute. The Dunsmuir decision is to be broadly welcomed, but there are nonetheless issues that are unresolved (Daly 2011), as is apparent from the separate judgment by Justice Binnie (Mullan 2008). The resurrection of jurisdictional error is likely to create problems. The impact of statutory rights of appeal on the Dunsmuir approach to standards of review is moreover unclear. The majority’s decision is framed in relation to administrative tribunals, and hence its application to other forms of administrative decision-making will evolve over time. Last but not least, the decision is equivocal as to whether there might still be differentiation within the rationality standard, dependent upon the more particular degree of deference that the court believes is appropriate in the instant case.

4.  EUROPEAN UNION EU law provides an interesting contrast to US and Canadian law. There has been almost no analysis of the meaning of law, nor has there been discussion of the test when the courts undertake such review. This is so even though there is much judicial review, and issues of law frequently require resolution. The initial decision-maker, normally the Commission, will be accorded authority on certain conditions, derived from a Treaty article or EU legislation. A claimant will contend that the Commission has erred in the interpretation of these conditions. There are thousands of such cases in EU law. The EU courts’ general approach is to substitute judgment on questions of law. They lay down the meaning of the disputed term, and if the Commission interpretation is at variance with this, it will be annulled. The general 42

  Dunsmuir v New Brunswick [2008] 1 SCR 190.

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Judicial review of questions of law: a comparative perspective  401 assumption is that the meaning of a term in the Treaty or EU legislation is a question of law for these purposes (Craig 2012, Ch. 15). The EU courts have sometimes tempered the force of this proposition. They have on occasion characterized language in a Treaty article or in Union legislation as involving discretion rather than pure questions of law. They have also on occasion characterized the issue as the factual application of a legal concept to an individual case. They will then focus on the evidentiary basis for the Commission’s finding and will accord it some discretion when determining whether the facts justify the application of the legal concept. However, review of both fact and discretion has become more intensive over time (Craig 2012, Ch. 15). It might be argued that the EU approach is not fundamentally different from that in the other systems discussed. Thus although the EU courts’ default position is substitution of judgment for error of law, this is qualified by classifying an issue as fact or discretion when the courts wish to accord greater autonomy to the initial decision-maker. This remains different from the position in the US and Canada, but the variation is less significant than might appear. There is some force in this view, but it does not tell the whole story. The reality is that reclassification is not very common, and there are differing normative assumptions that render the contrast between the legal systems more marked. The very great majority of EU Member States are based on civil law not common law. For those of a civil law persuasion it is axiomatic that courts decide issues of law. The conceptual premise of US, Canadian law, and to a lesser extent UK law, that some interpretive autonomy over legal issues should be accorded to agencies, whether on grounds of delegation, expertise or accountability, would in general not be accepted by those in the civil law tradition. The rationale for this position is eclectic. It might be based on interpretation of the country’s constitution, which entrusts resolution of legal issues to courts. It might be thought to be axiomatic that courts decide all questions of law. Courts might be unwilling to accept that administrators could be better placed to interpret legal issues than courts. Positivist conceptions of law may incline judges against the conclusion that there can be diverse, reasonable interpretations of the same legal term. There may well be countries where for historical reasons less trust is placed in the executive. There may be institutional considerations, as in the case of the French Conseil d’Etat, where the judges spend time within the administration and are, therefore, less likely to be swayed by arguments of relative expertise. It is therefore unsurprising that the CJEU, composed of a judge from each Member State, has taken the same position. They come with their civil law training, which inclines them to conclude that the CJEU should substitute its judgment on issues of law. Even if a particular judge were to find the US or Canadian approach attractive, there would be constraints against its adoption, since the CJEU gives a single ruling, and hence the judge would be unlikely to persuade others to adopt such an approach. Equally important is the fact that CJEU judgments are binding on all national courts. Thus even if the judge could persuade his fellow judges of the merits of the US or Canadian approach, he would rightly be cautious about issuing a CJEU judgment that would be regarded by national courts as at variance with civil law tradition.

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402  Comparative administrative law

5. CONCLUSION 5.1  One Test or Two: Contending Arguments It might be argued that the EU approach is to be preferred, either because courts should, as a matter of principle, substitute judgment on all issues of law, and/or because of the difficulties evident in US, Canadian and UK jurisprudence. The contrasting premise is that judicial control over issues of law does not always demand substitution of judgment, and that some interpretive autonomy should sometimes be afforded, subject to rationality review. There have been difficulties in deciding upon the criteria to determine the divide between substitution of judgment and rationality review, but this does not undermine the soundness of the premise itself. In certain respects the EU approach renders life ‘easier’ because there is only one test, substitution of judgment, which is applicable to all issues of law analytically defined. This is, however, to say no more than that the presence of only one arbiter on the meaning of such issues produces greater certainty than a division of responsibility. This ‘certainty’, however, comes at a price. The agency would be reduced to a mere fact-finder, no weight would be accorded to its opinion on the legal interpretation of the statutory terms, the courts would be embroiled in the minutiae of all legal issues and the law/fact/discretion distinction would be manipulated as an escape device when the court wished to accord greater latitude to the agency. Certainty concerning the legal test for review should, moreover, not be confused with certainty of outcome, since it can be difficult to predict whether the reviewing court will find that the agency’s interpretation was correct. 5.2  Two Tests: the Criteria for the Divide Legal systems that use two tests have used different criteria to determine when courts should substitute judgment and when some interpretive autonomy should be accorded to the decision-maker. The Canadian approach is still pragmatic and functional, notwithstanding the dis­ avowal of this label in Dunsmuir. The line between substitution of judgment and rationality review is demarcated through consideration of the range of factors set out above. These are sensible considerations, with the caveat that the jurisdictional factor should be dropped. UK law provides 300 years of history to show that it is impossible to demarcate between ‘true’ or ‘narrow’ jurisdictional inquiries as to whether the agency had authority to make the inquiry and other statutory conditions in the enabling legislation. The distinction is unsustainable in theory (Craig 2016, Ch. 16), nor is it justified in normative terms (Craig 2016, Ch. 16; Sunstein 2006). The principal thrust of the US approach in Chevron has, by way of contrast, been on legislative clarity as to the disputed term. This is the criterion for substitution of judgment within step one, the rationale for proceeding to step two being express or implied delegation to the agency to decide on the meaning of ambiguous terms, subject to judicial control through rationality review. This is so notwithstanding the differences between intentionalists and textualists, and notwithstanding the fact that expertise and accountability also featured in the Chevron reasoning. There is an interesting contrast with the pre-Chevron case law, where the court some-

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Judicial review of questions of law: a comparative perspective  403 times substituted judgment, and sometimes used rationality review. Commentators preChevron rationalized the jurisprudence by adverting to factors that might be influencing the judicial choice as to the test for review. The list included the nature of the disputed statutory term, the statutory language, purpose and context, agency expertise, and the cogency of the agency’s explanation for its interpretation (Davis 1972, Ch. 30; Jaffe 1965, Ch. 14). These explanations, therefore, included statutory clarity, but also broader functional considerations. There are some hints of a revival of this approach within US law, most markedly in the judgments of Justice Breyer in Barnhart,43 and Long Island Care at Home,44 which echo his earlier academic writing (Breyer 1986). It might be argued that this broader functional approach would engender greater uncertainty concerning the appropriate test for review, but certainty has not been a conspicuous feature of the US jurisprudence. Indeed the most detailed empirical study of Supreme Court decisions concluded that the existing deference regime was complex in theory and unpredictable in practice; the Court applied a plethora of doctrines concerning deference in addition to Chevron; individual Supreme Court Justices differed over the inter-relation of these different deference doctrines; and that in over 50 per cent of cases studied the Supreme Court applied no deference doctrine at all, reaching the decision through independent judgment, (Eskridge and Baer 2008). The same authors proposed criteria to decide when deference ought to be afforded to agencies that are close to, although not identical with, the approach adopted in Canada.45 There will inevitably be differences of view as to the criteria that should determine the divide between substitution of judgment and rationality review. The Chevron focus on legislative clarity as to the disputed term has, however, been problematic, and it is not self-evident that this should be the primary or sole criterion. The reality is that other factors underlie the Court’s rulings, as attested by the fact that agency success rates are positively correlated to agency expertise, statutory subject matter, and consistency in agency interpret­ation over time (Eskridge and Baer 2008). A better approach would be one that ceases to make the legal criterion for the two-part test turn so predominantly on the search for le­gislative clarity to the exclusion of other functional considerations. This would accord with past academic discourse, and it might better capture the reality of judicial decision-making.

REFERENCES Aronson, M. (2015), ‘Should We Have a Variable Error of Law Standard?’ in Hanna Wilberg and Mark Elliott (eds), The Scope and Intensity of Substantive Review, Traversing Taggart’s Rainbow, Oxford: Hart, Ch. 10. Bamberger, K.A. and P.L. Strauss (2009), ‘Chevron’s Two Steps,’ Virginia Law Review 95, 611–26. Beatson, J. (1984), ‘The Scope of Judicial Review for Error of Law,’ Oxford Journal of Legal Studies 4, 22–45. Bressman, L.S. (2005), ‘How Mead Has Muddled Judicial Review of Agency Action’, Vanderbilt Law Review 58, 1443–94.

  Barnhart, n 35.   Long Island Care at Home, Ltd v Coke 551 US 158, 165 (2007). 45   Whether the agency interpretation is made pursuant to a Congressional delegation of lawmaking authority; whether the agency is applying special expertise and using its understanding of the facts to carry out Congressional purposes; and whether the agency interpretation is consistent with larger public norms, including constitutional values. 43 44

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404  Comparative administrative law Breyer, S. (1986), ‘Judicial Review of Questions of Law and Policy’, Administrative Law Review 38, 363–98. Brown, Donald J.M. and Hon. J.M. Evans (1998), Judicial Review of Administrative Action in Canada, Toronto: Canvasback Publishing. Cane, P. (2016), Controlling Administrative Power, An Historical Comparison, Cambridge: Cambridge University Press. Craig, P. (1995), ‘Jurisdiction, Judicial Control and Agency Autonomy,’ in Ian Loveland (ed.), A Special Relationship, American Influences on Public Law in the UK, Oxford: Oxford University Press, Ch. 7. Craig, P. (1998), ‘Ultra Vires and the Foundations of Judicial Review’, Cambridge Law Journal 57(01), 63–90. Craig, P. (2012), EU Administrative Law, 2nd ed., Oxford: Oxford University Press. Craig, P. (2015), UK, EU and Global Administrative Law: Foundations and Challenges, Cambridge: Cambridge University Press. Craig, P. (2015), ‘The Struggle for Deference in Canada’, in Hanna Wilberg and Mark Elliott (eds), The Scope and Intensity of Substantive Review, Traversing Taggart’s Rainbow, Oxford: Hart, 2015, Ch. 12. Craig, P. (2016), Administrative Law, London: Sweet & Maxwell. Daly, P. (2011), ‘Deference on Questions of Law,’ Modern Law Review 74(5), 694–720. Davis, K.C. (1972), Administrative Law Text, 3rd ed., St Paul, Minn: West. Endicott, T. (1998), ‘Questions of Law,’ Law Quarterly Review 114, 292–321. Eskridge, W.N., Jr. and L.E. Baer. (2008), ‘The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan,’ Georgetown Law Journal 96, 1083–226. Gould, B. (1970), ‘Anisminic and Jurisdictional Review,’ Public Law 358–77. Gordon, D. (1931), ‘The Observance of Law as a Condition of Jurisdiction,’ Law Quarterly Review 47, 386; 557. Henderson, E.G. (1963), Foundations of English Administrative Law: Certiorari and Mandamus in the Seventeenth Century, Cambridge, MA: Harvard University Press. Huscroft, G. (2006), ‘Judicial Review from CUPE to CUPE: Less is not Always More’, in Grant Huscroft and Michael Taggart (eds), Inside and Outside Canadian Administrative Law, Essays in Honour of David Mullan, Toronto: University of Toronto Press, 296–326. Jaffe, Louis L. (1965), Judicial Control of Administrative Action, Boston: Little Brown. Jellum, L. (2007), ‘Chevron’s Demise:  A Survey of Chevron from Infancy to Senescence’, Administrative Law Review 59, 725–82. Keyes, J. (2006), ‘Judicial Review and the Interpretation of Legislation: Who Gets the Last Word?,’ Canadian Journal of Administrative Law and Practice 19, 119–50. Laws, Sir John (1992), ‘Illegality: The Problem of Jurisdiction’, in Michael Supperstone and James Goudie (eds), Judicial Review, London: Butterworths, Ch. 4. L’Heureux-Dube, Madame Justice (1997), ‘The “Ebb” and “Flow” of Administrative Law on the “General Question of Law”,’ in Michael Taggart (ed.), The Province of Administrative Law, Oxford: Hart Publishing, Ch. 14. Merrill, T.W. (2006), ‘The Story of Chevron: The Making of an Accidental Landmark’, in Peter L. Strauss (ed.), Administrative Law Stories, New York: Foundation Press, 398–429. Merrill, T.W. and K.E. Hickman (2001), ‘Chevron’s Domain,’ Georgetown Law Journal 89, 833–923. Merrill, T.W. and K.T. Watts. (2002), ‘Agency Rules with the Force of Law: The Original Convention,’ Harvard Law Review 116, 467–592. Mullan, D. (2003), ‘Establishing the Standard of Review: The Struggle for Complexity?,’ Canadian Journal of Administrative Law and Practice 17, 59–96. Mullan, D. (2008), ‘Dunsmuir v. New Brunswick, standard of review and procedural fairness for public servants: let’s try again!,’ Canadian Journal of Administrative Law and Practice 21, 117–50. Pierce, R.J., Jr. (1995), ‘The Supreme Court’s New Hypertextualism: An Invitation to Cacophony and Incoherence in the Administrative State,’ Columbia Law Review 95, 749–81. Popkin, W.D. (1993), ‘Law-Making Responsibility and Statutory Interpretation,’ Indiana Law Journal 68, 865–90. Rubinstein, A. (1965), Jurisdiction and Illegality: A Study in Public Law, Oxford: Clarendon Press. Scalia, A. (1989), ‘Judicial Deference to Administrative Interpretations of Law,’ Duke Law Journal (3), 511–21. Shapiro, S. and E. Fisher (2013), ‘Chevron and the Legitimacy of “Expert” Administration,’ William and Mary Bill of Rights Journal 22, 465–96. Stephenson, M.C. and A. Vermeule (2009), ‘Chevron has only One Step,’ Virginia Law Review 95, 597–610. Strauss, P.L. (2008), ‘Overseers or “The Deciders”—The Courts in Administrative Law,’ University of Chicago Law Review 75, 815–30. Sunstein, C.R. (1990), ‘Law and Administration after Chevron,’ Columbia Law Review 90, 2071–120. Sunstein, C.R. (2006) ‘Chevron Step Zero,’ Virginia Law Review 92, 187–249. Williams, R. (2007), ‘When is an Error not an Error? Reform of Jurisdictional Review of Error of Law and Fact,’ Public Law 793–812.

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24.  Proportionality review in administrative law Jud Mathews

1. INTRODUCTION At the most basic level, the principle of proportionality captures the common-sense proposition that, when the government acts, the means it chooses should be well-adapted to achieve the ends it is pursuing. The proportionality principle is an admonition, as German administrative law scholar Fritz Fleiner famously wrote many decades ago, that ‘the police should not shoot at sparrows with cannons’ (Fleiner 1928, 404). Courts instantiate the principle through a form of review that typically passes a challenged legal measure through a prescribed sequence of increasingly stringent legal tests, in order to determine whether the measure in fact impinges disproportionately on the rights or interests of a party. The global spread of proportionality is one of the worst-kept secrets in comparative law. As proportionality has become a fixture in numerous national and international legal regimes over the past few decades (Stone Sweet and Mathews 2008), it has also attracted a substantial amount of scholarly attention, and more than a little criticism.1 But the lion’s share of attention has focused on the use of proportionality in the realm of constitutional law, as a technique for adjudicating constitutional rights claims. Scholars have also given substantial consideration to the use of proportionality in regimes of public international law and international investment law (Baade et al. 2016; Bücheler 2015). Less has been said about proportionality’s role within administrative law. Despite this lack of scholarly attention, proportionality has in fact also come to play a significant role in the administrative law of a large and diverse set of jurisdictions as a control on administrative discretion, even when constitutional rights are not in play. If the use of proportionality review in administrative law is widespread, it is also characterized by significant national differences. This chapter aims to survey that diversity, and to help make sense of it, by organizing it and offering hypotheses about some of the sources of the variation that we observe. I draw on examples from several jurisdictions, but I do not claim that this account is remotely comprehensive or definitive.2 The use of

1   Major books devoted to proportionality that have appeared within the last five years alone include titles by Barak (2012), Bomhoff (2013), Cohen-Eliya and Porat (2013), Huscroft et al. (2016), and Klatt and Meister (2012). Critical treatments of the use of proportionality include Webber (2010) and Tsakyrakis (2009). 2   It is also worth noting that this chapter focuses exclusively on proportionality as a form of judicial control over administrative action. There are avenues besides courts for bringing the proportionality principle to bear. For instance, in China, the powerful State Council issued guidelines in 2004 that in essence instructed administrative bodies to exercise discretion proportionately (Huang and Law 2014, 25). For that matter, while the presidential rulemaking review conducted in the United States under the auspices of the Office of Management and Budget does not impose a

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406  Comparative administrative law proportionality review in administrative law is a topic that deserves more thorough and systematic study.3 Further empirical work would permit, among other things, testing of the hypotheses tentatively offered in this chapter. Proportionality in administrative law is something of a moving target, as changes are ongoing in many legal systems. Still, I suggest that we can understand the differences in how proportionality is used in the administrative law of different jurisdictions in terms of three principal axes of variation. With respect to any jurisdiction, we can ask: 1. how extensive the use of proportionality is (for instance, is proportionality applied haphazardly, or only in a few settings, or is it a general head of review that applies in principle to all administrative actions?); 2. how intensive the application of proportionality is (for instance, does proportionality entail serious judicial scrutiny, or substantial deference, or does it amount in practice to a low-intensity reasonableness review?); and 3. how discursive proportionality review is within the jurisdiction (for instance, do courts treat proportionality as a framework for reasoned justification, through which they explain their way to a conclusion in light of the relevant factors, or is the conclusion that a measure is proportional presented as an ipse dixit?). Ultimately, I argue, we can resolve some of the cross-national variety that we see into intelligible patterns, at which point some underlying regularities in how proportionality is used begin to emerge. To be sure, the diversity is very real: not only in formal doctrinal structures, but even in what actors in different legal systems mean when they refer to ­‘proportionality’ or ‘balancing’ (Bomhoff 2013, 13–21). But it is nonetheless possible to think of proportionality as a master concept of public law, and to see the differences in how it is instantiated—within different legal systems, in constitutional versus administrative law, and in different contexts within administrative law—as adaptations to systemand context-specific differences. The next section discusses the steps of proportionality review, and its historical origins. The section following describes the three major axes of variation. The last section assesses differences in how proportionality is applied, both across and within legal systems, and in conclusion considers proportionality’s place in public law.

2.  PROPORTIONALITY REVIEW: ELEMENTS AND ORIGINS 2.1  The Elements of Proportionality Review What I will call the standard model of proportionality review consists of three or four steps, depending on who is doing the counting. Courts inquire successively into the: (1)

proportionality test, its mandate to agencies to demonstrate that their measures are cost-justified is broadly similar in spirit. 3   For a recent and very useful volume concerning proportionality in administrative law in a number of (principally European) jurisdictions, see Waard (2016).

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Proportionality review in administrative law  407 legitimacy; (2) suitability; (3) necessity; and (4) proportionality stricto sensu—in the strict sense—of a challenged measure. (In many jurisdictions, the first step is regarded as a threshold inquiry, rather than a part of the analysis proper.) Suppose, for instance, that the Minister of Transportation issues regulations banning most heavy trucks from highways during daytime weekend hours. A full-dress review of the measure’s proportionality might look something like the following. First, as a preliminary matter, the court would ask whether the challenged measure serves a legitimate purpose: that is to say, a purpose it is permissible for the authority in question to pursue. This is a low bar to pass—it is a serious and rare infirmity for a government measure to have no legitimate purpose—and few measures are struck down at this stage. The Ministry should be able to justify the measure as a means to pursue ends for which it is responsible: reducing road congestion and improving public safety, for instance. Next, the court asks whether the challenged measure is a ‘suitable’ means to the achievement of its purpose. This, too, is a fairly relaxed inquiry, similar in spirit to the rational basis review conducted by American courts. To qualify as suitable, a measure need not be the best possible or most appropriate. It need only make some contribution to the legitim­ ate purpose already identified. If the Ministry can credibly claim that the ban reduces congesting and improves safety, it will pass this test. From this point on, proportionality review becomes progressively more d ­ emanding— although in practice, just how demanding can vary quite a bit. The next question is whether the measure is necessary to achieve its stated goal. This necessity inquiry is often operationalized as a least-restrictive-means test: in other words, could the government’s purpose also be achieved by alternative measures that infringe less on the freedom or interests of others? If the answer is yes, the government’s action is a disproportionate measure, and hence impermissible. Whether our putative driving ban would survive this stage of review depends heavily on how the court conducts it. Least-restrictive-means testing is, in principle, quite an intensive form of judicial scrutiny. But as discussed further below, courts in different jurisdictions have been known to modulate the stringency of the inquiry, for instance by adjusting how much deference they give to government judgments about the effects and availability of policy alternatives. If a measure survives the necessity test, it proceeds to the final phase of the inquiry, a balancing analysis, also known as ‘proportionality in the strict sense.’ Now the court weighs the benefits of the challenged measure (which has already been found to be appropriately tailored to the end it serves) against its costs, in terms of infringements of protected rights or interests. Only if its benefits exceed the burden it imposes does the challenged measure survive. Obviously, in this final stage of the analysis, courts cannot avoid making policy assessments and value judgments. 2.2  Origins of Proportionality Review The core idea of proportionality is, of course, a very old one. In his concurrence in BenAtiyah v. Minister of Education, Culture & Sports,4 Israel’s Supreme Court President   HCJ 3477/95 [1995] IsrSC49 (5) 1, 9.

4

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408  Comparative administrative law Aharon Barak found a version of the concept in twelfth-century philosopher Moses Maimonides’ instruction to use stronger medicines only if weaker medicines fail. He has identified still older antecedents in his scholarly work (Barak 2012). And courts have applied at least some version of a proportionality test for a long time as well. Paul Craig has recently unearthed a trove of sixteenth and seventeenth century English cases in which courts apply a ‘proportionability’ standard in a number of contexts (Craig 2017). But the modern, multistep proportionality framework is an innovation of Germany’s Federal Constitutional Court, which has used it to adjudicate constitutional rights claims for more than half a century. The Constitutional Court adapted the concept from German administrative law, where proportionality has played a role in judicial control of administrative action since the late nineteenth century. It is worth taking a very brief trip through proportionality’s origins in German legal thought and judicial practice, because the original justifications offered for proportionality as a fundamental legal principle still resonate today, or so I will suggest later. The proportionality principle emerged when late eighteenth century legal thinkers derived rules to govern the use of police power in light of first principles of political phil­ osophy. By the late 1700s, cameralism—the German science of public ­administration— had largely accepted the social contractarian premise that state power rests on an implicit bargain between subjects and sovereign, whereby the former submit to the rule of the latter so that the sovereign can advance their common welfare. But if this bargain is the source of the state’s authority to act, it also sets the outer bounds of the state’s authority: the state is justified in acting only to the extent that its action promotes the public welfare. As applied to police law, in the words of jurist Günther Heinrich von Berg, ‘the police law may abridge the natural freedom of the subject, but only insofar as its lawful goal requires’ (quoted in Würtenberger 1999, 63). Though the principle of proportionality was recognized by the end of the eighteenth century, proportionality review would not develop until nearly a century later, after administrative acts became subject to review by courts. The key development here was the establishment in Prussia of the Supreme Administrative Court (Oberverwaltungsgericht) in 1875. Within a few years, the court had fashioned the proportionality principle into a meaningful constraint over administrative discretion, both by circumscribing the legitim­ ate ends of the police power, and also by scrutinizing the means chosen in pursuit of those ends. Two examples will suffice by way of illustrating the early proportionality case law of the Supreme Administrative Court. In an 1886 case, the court ruled that the police could not require, on public safety grounds, a landowner to remove a post erected at the edge of his property. Rather, all that was necessary to protect the public was requiring the landowner to light the post after dark. As the court explained, ‘[t]he protection from accidents . . . is indeed the task of the police; this task and the authority finds its limit, however, in that the chosen measures may not extend farther than they must to meet the goal of eliminating the danger.’ That same year, the court ruled that it was disproportionate, and hence, impermissible for the police to close down a shop in response to the shopowner’s distribution of brandy without a license. The operation of the shop was itself not unlawful; only the distribution of brandy was. And so closing the shop was a more drastic step than the police needed to take to meet the legitimate goal of enforcing the license requirement. Other administrative courts within Germany soon began following Prussia’s lead, strik-

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Proportionality review in administrative law  409 ing down police measures on proportionality grounds (Stern 1993, 168). Although the subjects of imperial Germany did not enjoy the protection of entrenched constitutional rights, proportionality did make a significant contribution to individual freedom and the rule of law, by regularizing and constraining the use of state power.

3.  AXES OF VARIATION Today, a form of proportionality review plays at least some role in the administrative law of many legal systems, but the differences across jurisdictions are significant. I suggest that administrative law systems vary along three principal dimensions with respect to their use of proportionality review. 3.1  Extensiveness of Use Administrative law systems differ in terms of how extensively they employ proportionality review. In some systems, proportionality is regarded as a constitutional or general principle of law that applies, in principle, to the whole corpus of law. In others, proportionality applies only to certain areas within administrative law, or crops up unpredictably. And of course, some administrative law systems do not recognize proportionality as a governing legal standard at all. The European Union and Germany stand at one end of the spectrum, as jurisdictions in which the proportionality principle counts as fundamental law. In the EU, proportionality numbers among the general principles of EU law, and applies to EU measures as well as to member state measures alleged to infringe freedoms guaranteed in EU Treaties (Tridimas 2006, 137–8). Similarly, in Germany, proportionality counts as a fundamental constitutional principle, derived from the rule of law, which applies to all acts of the state that implicate the subjective rights of individuals in any way (Jarass and Pieroth 2012, 529, 530).5 More recently, South Korea’s Constitutional Court has identified proportionality as a basic standard of review (Huang and Law 2014, 13). Significantly, even in jurisdictions where proportionality applies in principle to all acts of the state, it does not follow that proportionality dominates the decisional law of administrative tribunals, providing the rule of decision in most cases. The array of rules and requirements to which the administration must conform in a typical jurisdiction tends to generate a correspondingly wide set of grounds on which to challenge administrative actions. Moreover, proportionality generally only comes into play where the administration is authorized to exercise discretion, and legal systems may recognize grounds for the substantive review of administrative choices in addition to proportionality. Germany illustrates the point. Judicial review may be available of both regulations (Rechtsverordnungen) and concrete administrative acts (Verwaltungsakte—enforcement

5   Indeed, this statement does not go quite far enough. Because provisions of the private law are also subject to constitutional control, proportionality can also be used to mediate between competing individual rights in private party disputes. What is more, proportionality also applies to some conflicts over the competencies of different organs of the state.

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410  Comparative administrative law actions, for instance), but legal challenges to the latter predominate in German administrative law (Rose-Ackerman 1995, 60). German administrative law has well-developed doctrines in place to govern the use of different forms of discretion by the administration (Marsch and Tünsmeyer 2016, 19–21). Some administrative choices that could be challenged as disproportionate grounds would also qualify as a misuse of discretion (Ermessensfehlgebrauch) and so could be invalidated on that basis (Maurer 2011, 149– 50).6 There are different views among scholars as to how the proportionality principle relates conceptually to the doctrines governing the use of discretion (Alexy 1986). But in administrative litigation, it seems that proportionality often ends up functioning as a last line of offense, to be litigated after other lines of attack against a measure fail, and when they are unavailable. In other jurisdictions, the use of proportionality has been formally confined to one or a few areas within administrative law. In England, for instance, the venerable and deferential Wednesbury standard continues to govern most administrative decisions (see Psygkas in this volume). Proportionality, however, applies to matters decided under EU law or the Human Rights Act of 1998, which enacted as domestic law rights from the European Convention on Human Rights (Davies and Williams 2016, 73). In Canada, proportionality informs the reasonableness review of administrative action insofar as it implicates rights guaranteed under Canada’s Charter of Rights and Values.7 And even though judicial review of administrative discretion is extremely limited in China, proportionality has made some scattered appearances there as well, including in a decision of the Supreme People’s Court,8 and significantly, in several lower court cases selected for publication in the anthology of Guiding Cases, which is edited by the Administrative Tribunal of Supreme People’s Court (Wang 2013, 14–17). In some jurisdictions, including Taiwan and South Korea, proportionality has been taken up unevenly by different high courts (Huang and Law 2014, 13, 21). The adoption of proportionality in a jurisdiction, even to a limited extent, sometimes seems to trigger an expansion of proportionality’s use, or at least calls for such an expansion. Its adoption in the constitutional context may pave the way for its use in administrative law (or vice versa). In the years since the adoption of the Human Rights Act in the UK, a number of scholars there have called for the adoption of proportionality as a general head of review (Craig 2013, 28 n. 84), and proportionality has in fact made some inroads in administrative case law (Davies and Williams 2016, 80).9 With respect to Canada, scholars have advanced different arguments to the effect that courts should more tightly integrate administrative law doctrines and constitutional law principles, including proportionality (Walters 2015; Carter 2004). In recent years, proportionality has experi-

6   For a detailed consideration of the nature of errors of discretion, and their relation to the principle of proportionality, see Alexy (1986). 7   Doré v. Barreau du Québec, [2012] 1 SCR 395. 8   Huifeng Industry Development Co., Ltd. v. Harbin City Planning Bureau, Judicial Decision No. 20 of Supreme People’s Court (1999). The case concerned a local planning bureau’s order that required partial demolition of a building that obstructed a historic site. The Court sustained a lower court’s ruling that the order was excessive and invalid insofar as it required more demolition than necessary to eliminate the obstruction. 9  See Paonette v. Attorney General of Trinidad and Tobago (2010) UKPC 32 (2012) 1 AC 1, (38).

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Proportionality review in administrative law  411 enced increased recognition in a number of Asian jurisdictions, including Taiwan, Korea, and Japan as well as China, and may come to play a still more prominent role in those jurisdictions in years to come (Huang and Law 2014). France is a jurisdiction where proportionality has come to be widely used in a number of areas of administrative law over a period of years (Sanchez 2016, 43–4). Police measures that infringe on basic freedoms have long been subject to a form of proportionality review administered by France’s Conseil d’Etat, the highest administrative tribunal. For instance, in the celebrated Benjamin case from 1933, the Conseil d’Etat struck down a police measure banning a conference organized by a controversial political figure, on the grounds that less restrictive measures would have also preserved the peace.10 Starting in the 1970s, the Conseil d’Etat began assessing urban planning decisions under the doctrine of le bilan (the balance sheet), which amounts to a proportionality balancing analysis: the court compares the advantages and disadvantages of a given plan to determine whether it is permissible (Brown and Bell 1998, 263). Proportionality also figures importantly in the review of administrative penalties in France.11 The Conseil d’Etat also appears to be becoming more self-conscious is its use of the proportionality concept in recent years: comparing the years 2001–05 and 2010–15, references to ‘proportionnalité’ in the decisions of the Conseil d’Etat jumped roughly five-fold, while the volume of decisions overall declined by more than a third. And notably, France’s Constitutional Council began explicitly conducting proportionality review on legislation in 2008.12 3.2  Intensity of Application Applied at full strength, proportionality review sets a very demanding standard. As mentioned above, its real teeth are to be found in the penultimate and final steps of the test’s canonical formulation, which subjects the challenged measure to least-restrictivemeans testing and a form of benefit-cost analysis, respectively. In practice though, there is substantial variation, across jurisdictions and across contexts, in how intensively proportionality is applied. Writing with reference to the Human Rights Act, Cora Chan has inventoried a number of techniques UK courts have employed to soften the stringency of proportionality review. These include: skipping stages of the analysis or merging it into an omnibus ‘fair balance’ or ‘reasonableness’ review; granting some measure of deference to the primary decision-maker’s judgment, with regard to either the availability of less-infringing alternatives or the proportionality of the measure more broadly; and limiting review to cases of ‘manifest disproportionality’ (Chan 2013, 9). These techniques appear in other jurisdictions as well, alongside some others, such as shifting to a measure’s challenger the burden of demonstrating the availability of less onerous alternatives (De Búrca 1993, 111–12). In some jurisdictions, proportionality is rarely if ever applied in a very demanding form. In China, for example, Jing Wang reports that courts in China are reluctant to review 10   Benjamin, CE, May 19, 1933, Rec. Lebon 541. More recently, the Conseil d’Etat upheld a mayor’s cancellation, on grounds of maintaining public order, of a performance by Dieudonné, a comedian known for his anti-Semitic statements. Dieudonné, CE, Jan. 9, 2014. 11   Vinolay, CE, July 26, 1978. 12   See decision no. 2008-562 DC, Feb. 21, 2008.

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412  Comparative administrative law discretionary decisions with substantial stringency, even in the rare instances where they are in a position to invoke proportionality at all (Wang 2013, 18–19). Elsewhere, courts appear to oscillate between more and less intensive versions of proportionality with little predictability. Describing the use of proportionality by Taiwan’s Constitutional Court, Cheng-yi Huang and David Law write that, ‘the test remains underdeveloped and inconsistent in application’ (Huang and Law 2014, 20). In systems where proportionality review is well established, however, courts tend to vary the scrutiny of review with the context of the case in a more-or-less predictable fashion. The EU offers a good example. The degree of scrutiny that the Court of First Instance and the European Court of Justice apply varies across the range of cases the courts hear, in light of the relative competences of courts and legislatures and the importance of the issues the courts are charged to protect (Craig 2006, 657). Judicial scrutiny is at a low ebb when the courts review discretionary choices that require political, social, and economic judgments and trade-offs.13 In such cases, the courts generally overturn only those direct­ ives or regulations found to be ‘manifestly disproportionate.’ The courts tend to be less deferential, for instance, when reviewing burdens and penalties, which often pose substantial hardships for the individual challengers and do not usually implicate the design of broader regulatory programs (Craig 2006, 681).14 A claim that a measure violates an EU right triggers high-intensity review (Craig and De Búrca 2011, 546). Predicting the degree of scrutiny may become more difficult to the extent that a case features factors that augur both for stepped-up and stepped-down scrutiny—say, a broadly discretionary policy choice that allegedly violates a right (Craig and De Búrca 2011, 546). Varying the level of scrutiny with the characteristics of the case is a way the proportionality framework can be made to respect a number of values relevant to the administrative process or policy goals. For instance, in Japan, courts apply a notably deferential version of proportionality-style review to administrative decisions not to act (Chikushi 2013). This directional deference—more pronounced towards agency inaction than action— reflects a sensitivity to the administration’s inherent advantage, relative to courts, in setting regulatory and enforcement priorities. EU courts make room for the precautionary principle in proportionality review insofar as it touches on the regulation of risk, by reviewing aggressive measures to reduce risks of serious harm with a fairly light touch (Craig 2006, 662). 3.3  Discursiveness of Analysis Jurisdictions also differ in the extent to which courts use proportionality review to structure an in-depth discourse on the challenged measure. Proportionality offers a framework that courts can use to engage in detail and at length with the merits and faults of a measure, as put before the court by the contending parties. In working their way through the proportionality subtests, courts can build a reasoned justification for their rulings,

13  C-491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11461. 14   For more on the circumstances associated with greater or lesser deference, see Tridimas (1999).

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Proportionality review in administrative law  413 acknowledging the competing interests on either side and explaining why, ultimately, one side prevails (Stone Sweet and Mathews 2008, 89). But proportionality review is not always and everywhere employed so discursively. At the other extreme, courts can make bare assertions that measures are proportionate, or reward measures that survive some other kind of review with that label (Lin 2013, 14, 18–20). There may be a connection between the intensity and discursiveness of a court’s proportionality review. As described above, courts can moderate the intensity of review by shedding stages of the analysis or compressing them into a less invasive ‘reasonableness’ review. But lowering the intensity of proportionality review does not necessarily entail sacrificing a deliberative, detailed evaluation of the competing claims or a well-justified conclusion. As Paul Craig notes, even when they review measures under the fairly deferential ‘manifest disproportionality’ approach, the Courts of the EU nonetheless engage in thorough, reasoned evaluation of the measures before them (Craig 2006, 670). What would be surprising, on the other hand, would be for a court to reject a measure as disproportionate, without justifying that outcome by amply demonstrating the course of reasoning that led it to that conclusion—including, for instance, by pointing to less infringing alternatives the government could have chosen. Existing national norms of judicial practice will certainly shape how courts present their proportionality analysis, but proportionality itself may have some impact on judicial culture. France is an interesting case in point. Rulings from France’s high courts tend to be short and syllogistic, presenting their conclusions as the inevitable results of inexorable operations of deductive logic (Lasser 2005, 34). Structurally, the decisions consist of a series of ‘Whereas’ clauses, terminating in an announcement of the court’s judgment. It is not that French courts do not engage in wide-ranging deliberations about the cases that they hear. They do, but these are typically conducted in ancillary documents that do not form a part of their published decisions (Lasser 2005, 47–60). The analysis in the decision itself may be skeletal in the extreme. France’s Constitutional Council, for instance, often concludes in a single sentence that a challenged measure is necessary, adequate, and proportionate (Sanchez 2016, 44).15 Still, the French administrative courts have shown that they can engage in a form of proportionality review even within the confines of the syllogistic formula. They can do so by shoehorning the case-specific circumstances that guide their evaluation of a challenged measure’s fit into that formula. In an unpublished decision from early 2016, for instance, the Conseil d’Etat reviewed a challenge, on proportionality and other grounds, to a police order ordering the eviction of all those camped on public lands in a suburb of Paris within 48 hours.16 The Conseil disposed of the proportionality challenge in a long ‘Whereas’ clause, the longest of the decision by far, that noted the dramatic recent increase in the encampments’ population, uncontroverted police reports noting unsafe and unsanitary conditions in the camps, and the city’s provision of emergency housing for the camp’s residents before concluding that there was no ‘manifest breach of the conditions of necessity and proportionality.’ Germany makes for an interesting comparison with France. German administrative

  Decision no. 2012-647 DC, Feb. 28, 2012.   CE, no. 390441, Jan. 7, 2016.

15 16

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414  Comparative administrative law court decisions can be exercises in sustained justification, with detailed consideration given to the relevant law and facts before the court. Accordingly, it is not surprising to find fairly in-depth proportionality analyses in German administrative case law.17 But notably, the courts do not engage in detailed analysis in all cases where they pass on the proportionality of a challenged measure. In circumstances where proportionality is not one of the major issues or the case, or the question is not a close one, German courts can also dispense with proportionality arguments quite briskly.18 There may be some jurisdictions in which a conclusion that a measure is proportionate is sometimes little more than a naked assertion not fortified by further reasons. Writing about Taiwan, for instance, and specifically with reference to environmental litigation, Chun-Yuan Lin has characterized proportionality as a ‘meaninglessly mentioned ­principle’ (2013, 13). Wherever courts conduct proportionality review, they of course do so against a backdrop of system-specific norms about the form of judicial decisions. But it is notable that, even given these differences, courts in different jurisdictions find the latitude to expand or contract the discursiveness of proportionality analysis, as they deem the circumstances of a case to demand.

4. ASSESSMENT 4.1 Patterns Broadly surveying the use of proportionality review in administrative law across jurisdictions, the first impression is one of a great diversity of approaches, across a number of dimensions: in terms of when, how, and how stringently the review is conducted. To be sure, there are some pronounced national differences. And of course, there are many systems that do not recognize proportionality as a head of review at all (even if, in some cases, they have doctrines that approximate proportionality review in some respects (Mathews 2016)). But a closer look reveals that there are substantial variations within legal systems as to how proportionality review is conducted in different circumstances. And at least some of the variation, within and across systems, begins to resolve itself into some broad patterns. In the space remaining, I will describe some of the patterns, and conclude with some comments about what this suggests about the role of proportionality in public law more generally. 4.1.1 Extensiveness Systems vary with respect to how extensively they employ proportionality review. In some jurisdictions, proportionality is wheeled out for use in a discrete set of contexts only, whereas in others, proportionality is recognized as a constitutional principle or general principle of law. But even in systems where proportionality in principle applies across the

17 18

  See, for instance, Bundesverwaltungsgericht, 8 C 13.09, Nov. 11, 2010.   See, for instance, Bundesverwaltungsgericht, 6 C 10.09, Apr. 15, 2009.

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Proportionality review in administrative law  415 board, in practice it does not dominate administrative litigation, since other normative controls over administrative power are also in place. Regardless of the formal status of proportionality principle, there are some ‘usual suspects’: legal contexts in which proportionality frequently turns up, wherever else it might appear. These include the review of administrative penalties, and administrative actions that implicate rights or other sensitive individual interests. It makes sense that these would be areas of law where the use of proportionality is prominent. These are areas in which the stakes of government overreaching are especially palpable because individuals are directly and adversely affected in salient ways. Under these circumstances, the appeal of a formula for review that blocks inappropriately farreaching measures is intuitive and powerful. The use of proportionality has expanded outward over time, both across legal systems, and within legal systems. There are both strategic and normative logics to p ­ roportionality’s spread (Stone Sweet and Mathews 2008). For judges, proportionality review offers a useful and flexible set of tools for managing difficult dispute-resolution environments. The proportionality framework offers a court an opportunity to acknowledge the validity of the competing interests on either side of a dispute and to justify its own decision with reference to the particular circumstances of the case. What is more, proportionality is subject to a kind of hydraulic normative logic. Once courts declare that some administrative uses of discretion should be reviewed from proportionality, declining to extend proportionality review to other discretionary choices is tantamount to conceding that disproportionate actions are permissible some of the time. Courts may find it difficult to justify that result (although the task may be easier to the extent courts can rely on wellestablished doctrines curtailing the scope of review). At the same time, national differences of several kinds stand in the way of anything like a convergence with respect to the scope of proportionality’s application. Administrative law doctrines that are already in place will shape how proportionality is received in a legal system. More broadly still, structural features in administrative law systems determine what kinds of administrative decisions are in principle subject to judicial review, and may exclude important classes of decisions.19 Both formal and functional differences in the scope of judicial review and the role of courts vis-à-vis the administration can condition how extensively proportionality is used. Systems with strong norms against substituting judgments may be especially resistant to the use of anything like proportionality to review policy-sensitive judgments thought to lie within the administration’s expertise. And courts that lack meaningful independence may be in a poor position to review the proportionality of high-stakes, politically salient choices. It would be surprising, for instance, to find courts in China exerting meaningful proportionality review over eminent domain decisions, as we see in France, given the limited independence that Chinese courts enjoy as a practical matter.20

19   For instance, Article 13(2) of China’s draft Administrative Litigation Law makes challenges to regulations inadmissible. 20   While eminent domain decisions in China are subject to review for rationality as well as for legality, as a practical matter this review is very limited. Thanks to Yuejun He of Ningbo University for this point.

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416  Comparative administrative law 4.1.2 Intensity Some patterns also emerge with respect to the intensity of proportionality review. To be sure, there is a considerable amount of residual variability as well, with the stringency of review varying for idiosyncratic reasons in some contexts. But in systems where proportionality is well established, we see courts calibrating the intensity of review to the circumstances of the litigation, according to more-or-less explicit and intelligible formulas. Courts tend to be more deferential to the decision-maker’s choice of measure to the extent that those choices implicate policy judgments, or administrative expertise, or the management of risk. Courts are more likely to apply proportionality full strength to the extent that the measures under review threaten harm to individual rights or other favored interests. In fact, it may be that having some rubric for varying the intensity of review is necessary if proportionality is to become a prominent feature in a jurisdiction’s administrative law. Applied most strictly, proportionality review leaves no room for deference to the judgments of primary decision-makers. But this most demanding form of review will be a non-starter in contexts in which those judgments are deemed to deserve at least some weight. On the other hand, varying the intensity of review on a purely ad hoc basis opens courts to charges of unpredictability and arbitrariness. It therefore makes sense that systems in which proportionality is prominent typically devise some framework to regularize how the intensity of review varies. The amount of attention given to the problem of controlling the variable intensity of review within a legal system may be one indicator that the system is reaching the saturation point with respect to proportionality. 4.1.3 Discursiveness There also appear some underlying regularities to variations in the discursiveness of proportionality review. Proportionality can function as a justification structure courts can use to justify their rulings through systematic, reasoned appraisal of the challenged measures. The norms of judicial decision-writing may be more or less congenial to this use of proportionality in different systems, and the importance of reason-giving may vary as well. The extent to which courts use proportionality review as an opportunity to ventilate, in their written decisions, the appropriateness of a challenged measure will obviously differ depending on these system-specific features. But two further points are worth noting. First, even in systems where stripped-down, syllogistic decisions are the norm, courts can still find room for a proportionality analysis that shows off how the court carefully tested the challenged measure’s fit. And second, courts across systems can expand and contract proportionality review like an accordion, depending on how much justification the court deems its conclusion to require. 4.2  Proportionality’s Place in Public Law This brief survey demonstrates that proportionality review is readily adaptable to a host of different circumstances. Courts can dispense with elements of the standard model and conduct review more or less stringently, while still retaining the core idea of an appropriate relationship between means and ends. But if proportionality’s protean character is one of the secrets of its success, it is not

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Proportionality review in administrative law  417 the only one. The widespread adoption of proportionality review within administrative law systems also reflects the normative attractiveness of the proportionality ideal as a benchmark for judging state behavior. As described above, Prussian police law scholars articulated a legitimating logic for proportionality that reduces to two key propositions: first, that what legitimates the use of public power is the pursuit of public purposes, and second, its corollary, that exercises of public power should extend no further than those purposes require. These propositions continue to resonate, including in modern liberal democracies, and can justify the use of proportionality to test government measures that constrain private liberties. While the adjudication of constitutional rights claims and the review of administrative discretion typically occur within separate doctrinal boxes, this rationale for proportionality applies in principle to both. And in systems where the use of proportionality is well developed, the distinction between proportionality as a principle of constitutional law and as a principle of administrative law can erode. The paradigmatic example is Germany, where the constitutional proportionality principle has essentially absorbed the ­proportionality principle anchored in police law. When proportionality makes frequent appearances in both constitutional and administrative contexts, it begins to look more like a general organizing framework for the review of government measures. On this view, constitutional rights claims are distinctive in that they are the basis for challenge to a wider range of government actions (for instance, to legislative as well as administrative action) and because they trigger particularly searching review. But this constitutional form of review might be regarded as a special manifestation of a more general government obligation to act proportionately. Courts and other institutions face decisions that will determine whether and to what extent their legal systems embrace proportionality as a sort of master concept of public law. These questions are already arising. For instance, in Canada, the issue of ­proportionality’s scope and how it bears on the relation between constitutional law and administrative law has arisen in a number of cases in recent years, which have divided its Supreme Court (Walters 2015).21 Rejecting some calls for a broader rapprochement between constitutional law and administrative law, the Court has most recently adopted the position that proportionality does not apply as such to reviews of administrative discretion, but does inform the administrative law reasonableness analysis, insofar as administrative measures implicate the values of Canada’s Charter of Rights and Freedoms.22 The Supreme Court of Canada’s decisions serve as a reminder that the place of proportionality in public law remains contested in many systems. While some functional and normative logics augur in favor of generalizing proportionality into a kind of all-purpose criterion of legal legitimacy, a broad set of countervailing factors generate significant and enduring cross-national variations in when and how proportionality review is actually conducted.

21   Key cases include Doré, supra n. 7; Multani v. Commission scolaire Marguerite-Bourgeoys, [2006] 1 SCR 256, Suresh v. Canada, [2002] 1 SCR 3; and Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817. Essays on the Baker case are collected in a volume tellingly titled The Unity of Public Law (Dyzenhaus 2004). 22   Doré, ibid.

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418  Comparative administrative law

REFERENCES Alexy, R. (1986), ‘Ermessensfehler,’ JuristenZeitung 41(15/16), 701–16. Baade, B., S. Ehricht, M. Fink, R. Frau, M. Möldner, I. Risini, and T. Stirner (eds) (2016), Verhältnismäßigkeit im Völkerrecht, Tübingen: Mohr Siebeck. Barak, A. (2012), Proportionality: Constitutional Rights and their Limitations, Cambridge: Cambridge University Press. Bomhoff, J. (2013), Balancing Constitutional Rights: The Origins and Meanings of Postwar Legal Discourse, Cambridge: Cambridge University Press. Brown, L.N., and J.S. Bell (1998), French Administrative Law, Oxford: Oxford University Press. Bücheler, G. (2015), Proportionality in Investor-State Arbitration, Oxford: Oxford University Press. Carter, G. (2004), ‘The Baker Effect: A New Interface Between the Canadian Charter of Rights and Freedoms and Administrative Law—The Case of Discretion,’ in D. Dyzenhaus (ed.), The Unity of Public Law, Oxford: Hart Publishing, pp. 61–86. Chan, C. (2013), ‘Proportionality and Invariable Baseline Intensity of Review,’ Legal Studies 33(1), 1–21. Chikushi, K. (2013), ‘Prohibition of Underregulation: The Proportionality Analysis in Inaction Cases in Japan,’ Institutum Iurisprudentiae, Academia Sinica, Workshop on Comparative Administrative Law in Asia. Cohen-Eliya, M., and I. Porat (2013), Proportionality and Constitutional Culture, Cambridge: Cambridge University Press. Craig, P. (2006), EU Administrative Law, Oxford: Oxford University Press. Craig, P. (2013), ‘The Nature of Reasonableness Review,’ Current Legal Problems 66(1), 1–37. Craig, P. (2017), ‘Proportionality and Judicial Review: A UK Historical Perspective,’ in Stefan Vogenauer (ed.), General Principles of Law: European and Comparative Perspectives, Oxford: Hart Publishing. Craig, P., and G. De Búrca (2011), EU Law: Text, Cases, and Materials, New York: Oxford University Press. Davies, A.C.L., and J.R. Williams (2016), ‘Proportionality in English Law,’ in S. Ranchordás and B.W.N. de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, Abingdon, UK and New York: Routledge, pp. 73–108. De Búrca, G. (1993), ‘The Principle of Proportionality and its Application in EC Law,’ Yearbook of European Law 13(1), 105–50. Dyzenhaus, D. (2004), The Unity of Public Law, Oxford: Hart Publishing. Fleiner, F. (1928), Institutionen des deutschen Verwaltungsrechts, Tübingen: Mohr. Huang, C.-Y., and D.S. Law (2014), ‘Proportionality Review of Administrative Action in Japan, Korea, Taiwan, and China,’ in F. Bignami and D. Zaring (eds), Research Handbook in Comparative Law and Regulation, Cheltenham, UK and Northampton, MA: Edward Elgar. Huscroft, G., B.W. Miller, and G. Webber (eds) (2016), Proportionality and the Rule of Law: Rights, Justification, Reasoning, Cambridge: Cambridge University Press. Jarass, H.D., and B. Pieroth (2012), Grundgesetz für die Bundesrepublik Deutschland, Munich: C.H. Beck. Klatt, M., and M. Meister (2012), The Constitutional Structure of Proportionality, Oxford: Oxford University Press. Lasser, M. de S.-O.-l’E (2005), Judicial Deliberations: A Comparative Analysis of Judicial Transparency and Legitimacy, New York: Oxford University Press. Lin, C.-Y. (2013), ‘An Unprincipled Principle? The Principle of Proportionality in Environmental Law in Taiwan and EU,’ Institutum Iurisprudentiae, Academia Sinica, Workshop on Comparative Administrative Law in Asia. Marsch, N., and V. Tünsmeyer (2016), ‘The Principle of Proportionality in German Administrative Law,’ in S. Ranchordás and B.W.N. de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, 13–42, Abington: Routledge. Mathews, J. (2016), ‘Searching for Proportionality in American Administrative Law,’ in S. Ranchordás and B.W.N. de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, Abingdon, UK: Routledge, pp. 160–90. Maurer, H. (2011), Allgemeines Verwaltungsrecht, Munich: C.H. Beck. Rose-Ackerman, S. (1995), Controlling Environmental Policy: The Limits of Public Law in Germany and the United States, New Haven: Yale University Press. Sanchez, Yoan (2016), ‘Proportionality in French Administrative Law,’ in S. Ranchordás and B.W.N. de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, 43–72, Abingdon, UK: Routledge. Stern, K. (1993) ‘Zur Entstehung und Ableitung des Übermaßverbots,’ in P. Badura and R. Scholz (eds), Wege und Verfahren des Verfassungslebens: Festschrift für Peter Lerche zum 65, Munich: C.H. Beck, pp. 165–75. Stone Sweet, A. and J. Mathews (2008), ‘Proportionality Balancing and Global Constitutionalism,’ Columbia Journal of Transnational Law 47(1), 73–165.

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Proportionality review in administrative law  419 Tridimas, T. (1999), ‘Proportionality in Community Law: Searching for the Appropriate Standard of Scrutiny,’ in E. Ellis (ed.), The Principle of Proportionality in the Laws of Europe, Oxford: Hart Publishing, pp. 65–84. Tridimas, T. (2006), The General Principles of EU Law, Oxford: Oxford University Press. Tsakyrakis, S. (2009), ‘Proportionality: An Assault on Human Rights,’ International Journal of Constitutional Law 7, 468–93. Waard, B.W.N. (2016), ‘Proportionality in Dutch Administrative Law,’ in S. Ranchordás and B.W.N. de Waard (eds), The Judge and the Proportionate Use of Discretion: A Comparative Study, Abingdon, UK: Routledge, pp. 109–41. Walters, M.D. (2015), ‘Respecting Deference as Respect: Rights, Reasonableness and Proportionality in Canadian Administrative Law,’ in H. Wilberg and M. Elliott (eds), The Scope and Intensity of Substantive Review: Traversing Taggart’s Rainbow, Oxford: Hart Publishing, pp. 395–422. Wang, J. (2013), ‘Proportionality’s Blooming and Development in China,’ Institutum Iurisprudentiae, Academia Sinica, Workshop on Comparative Administrative Law in Asia. Webber, G.C.N. (2010), ‘Proportionality, Balancing, and the Cult of Constitutional Rights Scholarship,’ Canadian Journal of Law and Jurisprudence 23(01), 179–202. Würtenberger, T. (1999), ‘Der Schutz vom Eigentum und Freiheit im ausgehenden 18. Jahrhundert,’ in W. Gose and T. Würtenberger (eds), Zur Ideen und Rezeptionsgeschichte des Preussisches Allgemeinen Landrechts, Stuttgart-Bad Connstatt: Frommann.

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25.  Voidness and voidability of unilateral administrative acts in the Western tradition Gabriel Bocksang Hola

The comparative analysis of administrative invalidity provides a remarkable example of the complexities of juridical relationships in the Western tradition. Although the understanding of the concept of nullity and its related formulae seems to be almost intuitive, it is rather demanding technically, both in fact and in law. And this is true even in relation to such important issues as the declaration that an act is invalid, or the protection of effects derived from invalid acts. However, this chapter focuses on a more fundamental problem that exists either expli­ citly or implicitly in various normative systems. The word ‘invalidity’ seems to refer to different things – essentially two different things, voidness and voidability. This conceptual distinction appears to be the primary, most abstract element that one must confront in developing a common theory of invalidity in the Western tradition. Accordingly, this chapter examines this issue from a comparative perspective, and briefly describes how it has been (or could be) addressed specifically in the field of administrative law. Five preliminary conceptual remarks should be stressed before continuing. First, invalidity is understood here as the exclusion of a rule from a certain normative system. Second, only original invalidity will be examined in this chapter; consequential types, such as abrogation, are beyond the scope of this discussion. Third, this chapter takes account of Anglo-American, European, and Latin American areas of legal thought, in order to synthesize the various ways the voidness-voidability dichotomy has been addressed. Fourth, these two basic concepts are not always univocally named in the different countries, and therefore this chapter will have to cope with this difficulty. And fifth, this chapter will focus on unilateral administrative acts; as a consequence, the application of the voidness-voidability duality to administrative contracts is not examined. In concrete terms, this article proceeds according to the following argument. The voidness-voidability dichotomy responds to the two essential ways of understanding ori­ ginal invalidity (Section 1) that appear from the historical roots of legal practice (Section 2). Therefore, these ways of understanding are variously articulated or differentiated in administrative law in the Western world (Section 3), reflecting different preferences as to the function of invalidity (Section 4).

1.  THE CONCEPTS OF VOIDNESS AND VOIDABILITY 1.1  Voidness as an Actual Invalidity If invalidity is defined as the exclusion of a rule from a certain normative system, its strongest possible manifestation is an actual exclusion. That means that the rule is at best 420 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 420

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Voidness and voidability of unilateral administrative acts  421 apparently, but not really, a rule in law. As such, it operates ipso iure – it is law itself that prevents its integration. Such a character is sometimes explicitly recognized by legislation. This is the sense of c. 149, paragraph 3, of the Codex Iuris Canonici, when it prescribes that ‘provision of an office made as a result of simony is invalid by the law itself.’ While the English official translation is technically ambiguous, the Latin is as clear as it could be for pointing out a true voidness: ‘provisio officii simoniace facta ipso iure irrita est’. Voidness operates ab initio. This means that the supposed act was never formed in law, so it was null since the very moment in which the agent (e.g., an administrative agency) intended to form it. This is not incompatible with the possibility of declaring voidness through a judicial decision – or even an administrative one. Such a declaration will just solve a potential legal controversy, and – in general – will not impede the enforcement or execution of the unlawful act. Some authors and jurists explain this possibility through a presumption, the presumption of validity (e.g., in England: Beatson et al. 2011, 85–90; in Italy: Romano 1937, 265; in Chile: Silva Cimma 1995, 124). But we adhere to the position that no presumption is needed (in Spain, González Navarro 1997, 445), as the mere executive force of administrative action is sufficient to explain how an administrative decision can be unilaterally enforced. Nevertheless, the ab initio character of voidness is not challenged in theory or in practice. Voidness is characterized by imprescriptibility, that is, the absence of a time limit for quashing the act. Many continental European and Latin American administrative regimes reflect this feature, which derives from an important rule coming from Roman law: ‘that which is void from the beginning cannot become valid with the passage of time’.1 Therefore, the action to quash should remain forever available to interested parties. Nowadays, this is the position of the German Nichtigkeit, the French inexistence juridique, the Chilean nulidad de derecho público and the Portuguese nulidade. Is a ius resistendi – a right to resist – granted against void acts? It is true that ‘a general principle of legal relativity’ can be acknowledged, by which, among other consequences, people tend to treat administrative acts as valid, independently of whether they actually are (Wade 1967–8, 512). Nonetheless, it is not uncommon to find legal examples of such permissible resistance. Of course, this is a very delicate issue and solutions vary. In France, for example, a civil servant can legitimately resist if the order given by his su­perior is ‘manifestly illegal’ (Code Pénal, article 122-4), and the Conseil d’Etat has, since the nineteenth century, sporadically protected resistance performed by individuals.2 In Canon Law, it is expressly ordered that ‘the executor of an administrative act to whom is entrusted merely the task of execution cannot refuse the execution of this act unless it clearly appears that the act itself is null’.3 In Italy, it has been understood that, while active resistance should never be accepted, a passive resistance might be possible in the case of voidness (Zanobini 1958, 299). In Germany, it has been considered that a void act can be ignored by all persons and authorities (Singh 2001, 82).

  D. 50.17.29: Quod initio vitiosum est, non potest tractu temporis convalescere.   See, e.g., CE, Drillet de Lannigou, 27 May 1863, Rec. 470. 3   Codex Iuris Canonici, c. 41. 1 2

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422  Comparative administrative law 1.2  Voidability as a Potential Invalidity In voidable acts, the exclusion from the normative system is not actual, but potential. They do actually belong to the normative system, but can be eliminated from it ex post facto because of containing defects regarded as relevant to the law, but not so relevant as to consider these acts as automatically excluded. As a potential invalidity, the main feature of voidability is that the action to quash the act should expire after a certain time, as for example in the Portuguese Administrative Procedure Act (APA) (article 163, paragraph 3) and in English law, in spite of the qualification of the invalid act as ‘void’ (Craig 2012, 743). It is also possible that voidable acts can be ‘healed’ through ratification or validation by administrative agencies (e. g., Argentine APA, article 19). Once the time period to challenge the act has passed, or after ratification or validation, annulment will be impossible and the effects of the act can no longer be altered on the grounds of invalidity. Because voidability is merely a potential invalidity, this has led some systems to qualify a voidable act as a valid act. The most prominent example is article 7 of the Federal Mexican APA, which states that an act declared voidable ‘will be seen as valid’ (‘se considerará válido’). This solution seems technically dubious: normally, the declaration related to a voidable act should be an annulment by which the previously existing act will be overturned. Mexican law, on the other hand, seems to sacrifice legality by transforming this declaration into a sort of an automatic and implicit ratification of the irregular act, which, once ‘declared voidable’, will benefit from a treatment similar to that applicable to a valid act. It seems that the Mexican case noted above is not representative of legal theory in the Western world. The usual solution is that, whenever a voidable act is annulled, it is excluded from the realm of validity in the legal system. From that moment, and following an official statement, the annulled act will (normally) not be able to produce any new legal effects. However, if no annulment is attempted after the time limit, the norm will become totally valid for that system.

2. THE HISTORICAL ROOTS OF VOIDNESS AND VOIDABILITY 2.1  The Origins in Roman Law This dichotomy between voidness and voidability, as representing the two main possible species – actual and potential – of original invalidity, is not a recent construction. Its roots can be traced back to Roman law. However, the quest to find a systematic treatment of invalidity in Roman law would not be viable, because the abstract concept of actus juridicus is a modern creation. Nevertheless, the main elements of our present theory of invalidity can be found in a nonsystematic way among Roman sources (Guzmán Brito 1996, 730). The fundamental type of invalidity recognized by Roman law pointed to the fact that an illegal act or contract did not exist, through formulae like nullum actum est or nullius momenti est, although other words designated the same idea (Kaser 1980, 60). In fact,

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Voidness and voidability of unilateral administrative acts  423 nullus, derived from the construction non ullus, means nothingness, the proper sense of nullity or voidness. If the act or contract existed, although no voidness could be logically applied, praetorian law established the possibility of quashing it ex post through mech­ anisms as restitutio in integrum or denegatio actionis (Biondi 1965, 218). These multiple concepts represented manifestations of a second type of invalidity, a layer superposed to the more radical voidness. In modern law, but not in Roman law, these situations would be integrated under a common genus of voidability. These two provinces of invalidity manifested themselves in both public and private law. In public law, for example, a decision by a Roman public authority could either be considered (a) valid, (b) null or (c) valid until another act retired the former one (Mommsen 1871, 442). An eventual third realm, the acts described as inutiles, did not establish a new type of invalidity, but rather described situations of the two aforementioned hypotheses, or even cases of simple inefficacity, unrelated to invalidity, such as a clause repeating the content of a previous one. In such a case, the act was not considered as invalid but simply inapt for modifying legal reality (Samper Polo 2003, 398). 2.2  The Developments of Medieval and Modern Law There is no doubt that both types of invalidity survived the fall of the Western Roman Empire. They can be found in crucial civil medieval legislation as the Lex Romana Visigothorum (506) and the Siete Partidas (1265). By the same token, Justinian’s Corpus Iuris Civilis had a strong influence on canon law, which also reflected these two juridical concepts, for example in the Decretales (1234) and the Liber Sextus (1298). Nonetheless, in Medieval Law, the conceptual axis of invalidity began to shift from voidness to voidability, which was particularly visible in procedural law (Bocksang Hola 2013b). Although modern law preserved the main frame of these mechanisms, they were sometimes heavily influenced by political and legal circumstances. In continental law, the case of French law was particularly dramatic, as it tried – not altogether successfully – to disconnect itself from the classical tradition in two main ways. The first was the introduction of an official ex post document, the lettres de rescision, as a requisite for considering certain void acts as void. Such a document could be understandable for annulling a voidable act but was illogical when applied on a void act, as this act was already and ipso iure non-existent. This was a product of the rise of the royal power, which assumed as part of its new prerogatives a strict control of what was legal and what was not. This practice led to confusion among the categories of voidness and voidability. Even if great jurists, such as Domat, d’Argentré and Legrand, recognized and promoted the classical dichotomy at the end of the seventeenth century there was no clarity on the boundaries between the two categories and many practitioners were not able to handle them correctly. It seems that d’Aguesseau was the first to suggest, in 1697, a new cri­ terion for classifying invalidity, the locus standi. If it was granted to all interested parties, it would be a nullité absolue (absolute voidness); if only to specific parties, determined by the law, it would be a nullité relative (relative voidness). However, the interpretation of ‘voidness’ proposed by d’Aguesseau had a neutral meaning of ‘invalidity’: it could mean real voidness, or just voidability, depending on the case. Thus, at least four main conceptual

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424  Comparative administrative law combinations were possible from then on: absolute voidness; relative voidness; absolute voidability; and relative voidability. This subjective element of locus standi as the basis for classification introduced a second disconnection from the classical theory of invalidity. Over the course of the eighteenth century, the word nullité (technically and etymologically ‘voidness’) became more commonly applied to voidability, the other member of the duality, while, simultaneously, the substantial (and practical) axis of invalidity continued to move towards voidability. As a result, the Code civil des français of 1804 used the word ‘nullité’ in the sense of voidability (article 1304). Nevertheless, jurists were aware that the old ‘nullité’, in the original sense of voidness, was implicitly received into the Code: it was clear in the travaux préparatoires and among some of the first commentators of this celebrated legal corpus. Words, nonetheless, are essential for thinking; and French jurists noticed the inconveniences derived from this ambiguous duplicity of the term ‘voidness’. As the new sense of the word nullité seemed inclined toward voidability, it was just a matter of time before someone proposed a new word for naming voidness stricto sensu. In 1839, Aubry and Rau introduced systematically the word inexistence for civil law, asserting that ‘l’acte nul diffère essentiellement de l’acte inexistant’ (‘a voidable act differs essentially from an inexistent act’), this last category designating the old voidness (Aubry and Rau 1839, I, 66–7). Although weakened, the duality had survived through the coupling inexistence-nullité. However, this linguistic innovation sadly led to a degradation of conceptual clarity, as some important French authors decided to sustain a trichotomy composed by inexistence and two kinds of nullités in their ‘new’ meaning of voidability (e.g., Planiol 1908, 127), which other authors criticized almost immediately because of its lack of logical consistency. It is hardly surprising that when, at the end of the nineteenth and the beginning of the twentieth centuries, French administrative law tried to reconfigure a theory of invalidity (Laferrière 1887, 468–71; Alcindor 1912), it was heavily influenced by the explanations and even the contradictions derived from the works of civil lawyers (Plessix 2003, 443–60). English administrative law, by contrast, seemed to suggest that something approaching the Roman dichotomy survived until relatively recently. While ultra vires action was considered to be void and null, an intra vires error of law on the face of the record produced a voidable act that tribunals or courts could quash. This distinction disappeared when its premises did, as the House of Lords declared that all error of law would be ultra vires and consequently the decision affected would be void, not voidable (Wade and Forsyth 2009, 255); although, as it will be explained below, this ‘voidness’ rather tends to represent the technical meaning of voidability. Other countries, such as Germany, Italy and Portugal, have legal systems still strongly tied to their Roman roots. German law still distinguishes Nichtigkeit, nothingness, as in paragraph 125 of the BGB, and Anfechtbarkeit, the possibility to destroy an existing act, as in paragraph 119 of the BGB. Italian civil law distinguishes between nullità and annullabilità, corresponding literally to the English voidness and voidability. And Portugal, in the recent APA (Codigo do Procedimento administrativo), distinguishes between nulidade and anulabilidade of administrative acts. The emergence of constitutionalism and the strengthening of the idea of normative hierarchy arguably stimulated further inquiry into the theory of invalidity in the Western tradition. In the United States, for example, Alexander Hamilton (Federalist, n. 78) declared that ‘there is no position which depends on clearer principles, than every act of

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Voidness and voidability of unilateral administrative acts  425 a delegated authority, contrary to the tenor of the commission under which it is exercised, is void’. Also, literal examples in the constitutional domain of invalidity can be found in some countries, such as Chile and Argentina.4 From what precedes, it can be stated as a matter of fact that voidness and voidability do exist today as legal concepts. However, in different legal systems their content varies, generating different types of invalidity structures.

3. THE STRUCTURES RELATED TO VOIDNESS AND VOIDABILITY 3.1  Monistic Systems Monism, considered as the existence of a single type of invalidity in a normative complex, does exist in its two variants: monistic voidness and monistic voidability. In the Western tradition, perhaps the most obvious case of monism based on voidness is the Chilean. Since 1833 a constitutional rule has established voidness as the only applic­ able species of invalidity in administrative law (Soto Kloss 2012, 508–10, Bocksang Hola 2015, 589–99). This rule has been directly applied by Chilean courts since 18515 and has been received – almost literally – in article 7 of the Constitution of 1980: No authority, person or group of persons may assume, even on the pretext of extraordinary circumstances, other authority or rights than those conferred expressly upon them by the Constitution or by law. Any act transgressing this article is null and void (es nulo) and shall give rise to the responsibilities and sanctions indicated by law.

But it must be said that, in the province of private law, the Chilean position is dualistic, according to the Civil Code of 1857 (cf. articles 10, 1683 and 1684). Spain may be understood, at least in part, as a system of disguised monism centered on voidness. Even as dualism is seemingly a central principle of Spanish administrative law, article 47, paragraph 2 of the Spanish APA (2015) establishes voidness as the only possible invalidity applicable on disposiciones administrativas (i.e., administrative acts of general effects) if they are determined to: (i) transgress the Constitution, the laws, or higher ranked disposiciones administrativas; (ii) invade Legislative prerogatives; or (iii) apply sanctions or restrictions to fundamental rights retroactively. This means that, in Spain, two invalidity systems can be found in administrative law, depending on their scope: on administrative acts with general effects, a monism founded on voidness, nulidad de pleno derecho; on administrative acts having individual or restricted effects, the dualism ­voidness-voidability. Portugal has recently followed a similar rule with the invalidade (article 144 of their Codigo), where regulamentos can be quashed ‘at any time’ (‘a todo o tempo’). Monism based upon voidability as the only species of invalidity can also be found in   Chilean Constitution, article 7; Argentine Constitution, articles 29, 36 and 99.   E.g., C. Ap. La Serena, 24 July 1851, Ex municipales de Vallenar, GT 475 p. 3413; CS, 20 November 1997, Pérsico Paris, RDJ 94 s. I p. 126. 4 5

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426  Comparative administrative law Western law. In Ecuador, for example, article 65, paragraph 2 of the Ley de la Jurisdicción Contencioso-Administrativa states that actions leading to ‘objective’ challenges, i.e., those seeking to quash an administrative act, should be introduced in a maximum delay of three years, with some exceptional cases extending it to a limit of five years. In Costa Rica, the Ley General de la Administración Pública distinguishes nulidad absoluta from nulidad relativa (article 165); both are subject to a time limit, generally one year (article 175; articles 39 and 40 of the Código Procesal Contencioso-Administrativo), although a sort of residue of real voidness subsists in article 34 number 2, which establishes an imprescriptible administrative review leading to protection of public property (dominio público). 3.2  Strong Dualistic Systems Some administrative regimes operate with a clear distinction between the two types of invalidity. Germany provides an excellent example, in that ‘illegal [administrative] acts are either void or voidable’ (Singh 2001, 82), mirroring the duality established through the BGB for civil law. In Spain, besides the special case of disposiciones administrativas, as stated above, the invalidity of administrative acts follows a traditional dualism entailing either voidness (nulidad de pleno derecho) and voidability (anulabilidad); a structure followed by the new Portuguese APA of 2015 (nulidade-anulabilidade). And the French approach to invalidity in administrative law distinguishes between excès de pouvoir, configured as a typical voidability, and those cases in which the act is nul et de nul effet ou nul et non avenu and, as such, showing the main characters of a voidness stricto sensu through the ‘modern’ denomination of inexistence juridique or actes inexistants. Naturally, the problem in dualistic systems is to find a mechanism leading to determine when each type of invalidity shall be applicable. French doctrine has vacillated between a theory focusing on how obvious the defect appears from the administrative act (e.g., de Soto 1941, 63) and another dependent on the gravity of the defect (Auby 1951, 332). In Germany, these two criteria were combined in the APA of 1976, in which article 44, paragraph 1 defined the boundary between voidness and voidability through a combination of both requirements of gravity and obviousness. Paragraph 2 then provides examples of specific cases of void acts (e.g., acts against morality, acts not revealing the issuing ­authority), while paragraph 3 mentions some situations not leading to voidness. A similar path is followed by Spanish law: article 47 of the new APA (2015) establishes six categor­ ies of acts subject to voidness, while article 48 describes the main cases of voidability. A similar catalogue appears in Portuguese law (Codigo, article 161). In spite of terminological fluctuations, the case of the United States seems to suggest a strong dualism. This appears to be the case in federal as well as in state law. In US federal law, the APA provides that ‘except to the extent that prior, adequate, and exclusive opportunity for judicial review is provided by law, agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement’,6 thus granting an open protection against unlawful administrative action, including invalid administrative acts. Nonetheless, this must be nuanced with the existence of express or implied time-limitations of judicial review in special statutes. Some lower courts have even interpreted the general time limita6

  US APA, § 703.

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Voidness and voidability of unilateral administrative acts  427 tion of six years for actions against the US as a source for precluding procedural challenges even in an enforcement action posing the purported procedural defect as a defense (Levin 2011, 2219).7 State law seems to follow similar dualistic contours. According to section 503 of the 2010 Model State Administrative Procedure Act, a time limit – therefore assuming ­voidability – is only introduced in what concerns procedural or formal defects: ‘Judicial review of a rule on the ground of noncompliance with the procedural requirements of this [act] must be commenced not later than [two] years after the effective date of the rule.’ But when confronted with other kinds of defects, voidness should be declared, for ‘judicial review of a rule or guidance document on other grounds may be sought at any time.’ The panorama of strong dualism shows that the extension of each type of invalidity depends on a choice made in the specific country. The US seems to integrate voidness quite openly. France takes the opposite solution, as in our days the importance of inexistence juridique has become more dogmatic than practical. And an intermediate position, with peculiar national characteristics, can be discovered in Spain and Germany. More ways of combining the traditional dichotomy can be discovered in other dualistic legal systems. 3.3  Weak Dualistic Systems In other cases, the distinction between voidness and voidability exists as such in law, but its scope is different from the view generally suggested by the traditional dichotomy. Instead of being systematic, its role could be described as residual. The most evident case of this perspective can be found in Italian law. Historically attached to the distinction of the duality nullità-annullabilità, it was not surprising that Italian administrative law adopted it explicitly in 2005.8 However, the enactment in 2010 of the Codice del processo amministrativo introduced a new rule (article 31, paragraph 4) applicable to all voidness actions: a time limit of 180 days. Thus, for Italian plaintiffs, voidness became a case of qualified voidability, because instead of being imprescriptible, as voidness had traditionally been in Italy, the action was granted only a slightly longer limitations period than that applicable to voidability, which is 60 days (article 29 of the Codice). Nonetheless, some characteristics of real voidness still subsist in Italian administrative law: the judge, or persons as defendants can ‘always’ (sempre) raise the question of nullity. But, as a whole, the decision introduced in Italy does not seem logical. It would be better if they returned to a strong dualism, reducing the risks an artificial trichotomy inesistenza-nullità-annullabilità that seems, in the form proposed (as in Ponte 2015, 34-48 for inesistenza), to repeat the errors of early twentieth century French doctrine (Bocksang Hola 2013a, 164–6). Another type of weak dualism can be found in Argentina. Voidness, as an imprescript­ ible invalidity, was once part of the Argentine administrative regime. However, nulidad 7   28 U.S.C. § 2401: ‘Except as provided by chapter 71 of title 41, every civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues.’ 8   Legge 241/1990. Article 21-septies ruled the case of voidness, 21-octies did the same on voidability.

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428  Comparative administrative law was technically – not literally – transformed into a case of anulabilidad whenever a citizen intends to quash an administrative act; as a consequence, some authors have tried to re­insert a wider scope of voidness by invoking the French terminology of inexistencia (the best example is Gordillo 2011, XI, 22–30). But, in fact, the traditional meaning of nulidad as a case of voidness stricto sensu subsists whenever the administration declares its own acts to be null. And a further case seems to appear from article 36 of the Argentine Constitution. Acts issued against the ‘institutional order’ or the ‘democratic system’ are ‘insanablemente nulos’ (incurably null). Even in article 14 of the Argentine APA, which establishes cases of ‘nulidad absoluta e insanable’ (absolute and incurable nullity) subject to a time limit, it has been asserted that this case of ‘insanable’ invalidity, as a ­‘constitutional voidness’ is imprescriptible (Dromi 2000, 278). Even if legal practice tends to assimilate invalidity with voidability, this constitutional norm shows the possibility of recognizing at least a residual role for voidness in Argentina, weak as it might be.9 3.4  Flexible Dualistic Systems In Latin America, Colombia gives an example of a flexible dualism. Although Colombia’s APA/Judicial Review act10 uses a single terminology, nulidad, in actual practice it entails the two forms of voidness and voidability. Voidness appears in article 135, where an action against an unconstitutional general decree can be introduced ‘at any time’ (en cualquier tiempo); and in article 137, ruling the cases of nulidad against ‘general acts’ and some individual acts. Article 164 number 1 states that this action, just as the one in article 135, is imprescriptible, through the same expression en cualquier tiempo, and eventually extending its scope to other cases, such as acts concerning inalienable public property. And voidability applies whenever nulidad intends to be mixed with a protection of a subjective right, named by this statute restablecimiento del derecho (restoration of the right, article 138). This action, according to article 164 number 2, must be introduced in four months, generally since notification or publication of the measure. Exceptional rules about time limits do exist, however, in this statute and in other ones. The most peculiar feature of this structure is that the nature of the action does not depend on substantial matters, but on the fact that judicial review of a void act can have nullity as its only object, or nullity associated to a certain subjective protection other than legality. In the first case, the action will be normally imprescriptible; in the second, a short time limit will exist. English administrative law potentially provides another case of dualism, one less concerned by ontology and more procedurally focused. It is true that the formal distinction of the classical dichotomy has been historically received in England, but in fact, what in England is qualified as voidness rather corresponds to the category of voidability. Some authors stress that qualifying invalidity as voidness has practical consequences, as for example with regard to jurisdiction, the regulation of collateral challenge, and the exclusion of ouster clauses (Beatson et al. 2011, 109). However, this approach rather proves that different nuances of voidability can be distinguished in one legal system.

 9 10

  Something similar could be argued about articles 29 and 99 of the Argentine Constitution.   Ley 1347/2011.

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Voidness and voidability of unilateral administrative acts  429 Nevertheless, the situation may be more subtle than the assertion that England shows a strict voidability-based monistic regime might suggest. In fact, the meaning of nullity ‘is relative, depending upon the court’s willingness to grant relief in any particular s­ ituation’ (Wade and Forsyth 2009, 253). Part 54 rule 5 of the Civil Procedure Rules stresses that ‘the claim form must be filed promptly; and in any event not later than three months after the grounds to make the claim first arose’. Part 3 rule 1 of the same statute gives the court a power to ‘extend or shorten the time for compliance with any rule, practice direction or court order (even if an application for extension is made after the time for compliance has expired)’. In spite of judicial review restrictions in the English system, related, for example, to rule making (Cane 2016, 296–7), an articulation between those two rules might open the possibility of integrating voidness stricto sensu in England, should circumstances in a certain case justify its application, while retaining the current rule of voidability as a general one.

4.  THE FUNCTIONS OF VOIDNESS AND VOIDABILITY 4.1  The Protection of Legality The idea of invalidity intuitively relates to the fact that any normative system must be protected in its actual application. This is an unquestioned idea; but the way this protection operates depends on the specific type of invalidity. As may be imagined, the strongest difference in how voidness and voidability protect legality comes from voidness not being subject to a time limit for quashing the act. The imprescriptibility of voidness means that a legal system will never accept in law a norm transgressing whatever essential requirements that system might demand. It is a very strong protection of legality. On the other hand, the time limit associated with voidable acts implicitly assumes that the values protected by legality are not always essential, and that it is sometimes possible to accept a defective norm as a valid one, after the passage of a period of time or after ratification. Sometimes this is not just a juridical choice but also a political one. A good example for illustrating this point comes from France. On 9 August 1944, after the fall of the regime of Vichy, the republican authorities decided to declare void all constitutional, legislative and administrative acts issued after 16 June 1940. Even if this invalidity had to be explicitly ‘recognized’ (constatée), this ordonnance established a clear case of voidness, because the ordinary periods for declaring administrative acts as invalid had already expired (not to mention for constitutional and legislative acts, where the possibility of quashing did not even formally exist). The choice of the voidness technique appears here as strongly motiv­ ated by political considerations: republican France abhorred the regime of Vichy and would not tolerate the automatic survival of its norms on the grounds of the existence of a time limit required for quashing them. That explains why this text was named ‘statute (ordonnance) for the reestablishment of republican legality’. However, the strong protection of legality granted by voidness is not limited to political circumstances and responds to many other different criteria. Depending on the country, legality can protect the coherence with fundamental rights, or normative hierarchy, or normative comprehensibility, or the division of powers within public bodies, among

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430  Comparative administrative law many other possibilities. And, of course, in monistic systems built on voidness, it protects legality as a whole. Voidness and voidability also differ in their function as exemplary mechanisms. Administrative activity is intrinsically related to a massive production of rules, each one – and above all the most highly ranked – serving as models for the production of others. Voidness implies that defective administrative acts could cease at any time to be taken as reference for administrative action. Voidability grants them more stability but raises the risk of replicating defects and promoting illegal conducts based on their text. Another difference between the two kinds of invalidity is related to what is called domino effect in English, or nullité par ricochet in French: the consequential invalidity of an act because another one preceding it is declared invalid. This situation is sometimes explicitly acknowledged by national legislation, as article 13, paragraph 1 of the Peruvian APA. Voidability, through time limits, will assure a greater level of stability. Voidness will rely on a differentiation between the two layers of law (lex) and right (ius) in order to avoid unfair results, thus permitting the survival of certain effects of the originally void and the consequentially invalid acts. The enforcement of voidness and voidability sometimes reflects similar limits on the strict protection of legality. A first such limit is partial invalidity, or the idea that an act can simultaneously contain legal and illegal articles or clauses. In these cases the principle utile per inutile non vitiatur (i.e., that valid articles or clauses are not rendered invalid because of the coexistence of invalid ones) should apply. This is the approach, for example, of article 53, paragraph 2 of the Chilean APA, which regulates invalidación, or the declaration of voidness by administration itself. This provision states that a ‘partial invalidation will not affect clauses independent from the invalidated part’. The same approach can be found in the Spanish APA, article 49, paragraph 2, which prescribes that ‘voidness or voidability in part of the administrative act will not involve one of the parts of the same act independent of the former, unless the defective part would be so important that the administrative act would not have been issued without it’. Other examples can be found in Argentina (APA, article 16), and Germany (APA, article 44, paragraph 4). Another nuance in the enforcement of voidness and voidability involves conversion. This consists of attempting to combine all legitimate elements of an invalid act into a valid kind of act. It exists in such countries as Germany (APA, article 47), Argentina (APA, article 20), Spain (APA, article 50) and Honduras (APA, article 127). Finally, some national legislators have introduced a principle of conservation. In some cases, conservation describes an attenuation of invalidity in the horizontal relationship of an invalid act with others. For example, article 51 of the Spanish APA expresses that ‘the public body declaring voidness or voiding acts will always conserve those acts and proceedings whose content would have remained the same if no breach had been committed’. But in other cases, this word focuses on the examined act itself, in which the invalidity is discarded on the grounds that the defect is negligible. Such is the case of article 14 of the Peruvian APA, which nevertheless keeps administrative responsibility as a possible consequence of the infraction.

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Voidness and voidability of unilateral administrative acts  431 4.2  The Protection of Rights Even if described as normatively centred, all theories about invalidity are, in fact, conceived in the ultimate analysis to provide for the protection of rights. They are not a mere exercise in technical speculation. Highly valued political or normative concepts that can be invoked in the protection of legality, such as general welfare, common good, public interest and the predictability and the rationality of law. But these concepts should all be understood as leading – directly or indirectly – to the protection of rights. This protection can be conceived in two complementary spheres. On the one hand, there is an area of protection of rights that accrued before the irregular administrative act was issued. Retroactivity or retrospectivity, often associated with invalidity, exists in order to keep certain legal situations as untouched as possible by the transgression to legality. On the other hand, legal systems cannot deny the fact that an enforced void or voidable act often has, de facto, interfered with legal reality, often being coercively applied by public bodies and sometimes having an appearance of conformity to legitimate rules. People and civil servants will normally be expected to trust the legality of administrative decisions, and this trust could produce effects in law. That is what, in English law, has been described as an ‘apparent paradox’: the fact that some effects can appear from an invalid act, because ‘the rule of law may actually require that the law courts should give legal effect to a decision that was not legally valid’ (Endicott 2015, 403). This is in fact not a paradox. It is, rather, a natural consequence of separating two areas that might – and should – be related to each other: the act, for one part, and the effects of the act, for another. When declaring an act as invalid, the judge will be able to protect some of its consequences even if invalidity is conceived as a general inclination in an opposite direction, precisely because there would be a right or a situation in law that deserves to be protected according to juridical criteria (e.g., good faith, legitimate expectations). The question about which effects should be protected is a complex one to answer, and partially depends on the choice between voidness and voidability. The imprescriptibility of voidness allows the judge to declare at any time that certain effects will never be protected in law. This can be called a ‘radical exclusion of effects’. For instance, an administrative act concerning public property, whenever this property is considered a res extra commercium (a thing outside commerce, i.e., insusceptible to be the object of private rights), will be unsuitable for creating any effects by its very nature. Other cases can be found in other countries, such as in French administrative law, in administrative acts against a judicial decision having force of res iudicata11 or by a manifestly incompetent authority,12 as well as nominations or promotions of civil servants solely designed to improve their curriculum vitae so they can reach a higher position.13 Other examples have been developed by different legal systems (Bocksang Hola 2013a, 518–29). In this hypothesis, there is an absolute protection of the rights despite the intervening invalid act. This radical exclusion of effects is much more complicated in the case of voidability. It is true that the judge may be allowed to impede the consolidation of effects derived from the

  E.g., CE, 18 March 1998, Khellil, Rec. 91.   E.g., CE, 8 December 1982, Commune de Dompierre-sur-Bresbe, Rec. T. 550, DA 1983 n° 31. 13   The case of the measures pour ordre: e.g., CE, 30 June 1950, Massoneaud, Rec. 400. 11 12

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432  Comparative administrative law act, but this will happen only if the voidable administrative act is quashed during the time limit provided by the procedural system. Otherwise, the judicial review will be impossible and therefore the exclusion of the effects will become impossible as well. It is true that it would still be possible to introduce subsequent mechanisms for radically excluding effects beyond the strict grounds of invalidity; but there would remain a crucial contradiction in the fact that such a violation of essential legal or political principles would not influence the field of validity. Leaving aside these radical exclusions of effects, voidness and voidability otherwise share the possibility that the judge might shield certain effects flowing from an invalid act. Therefore, a protection of legal relationships established from the administrative act will be granted, if the conditions required by law are satisfied. Consequences can vary, as Portuguese law shows. While article 162, paragraph 1 of the Codigo presents voidness as totally ineffective (‘a void act does not produce any effects in law, with no regards to its [eventual] declaration of nullity’), these strict consequences are soothed by paragraph 3, as voidness ‘does not harm the possibility of granting legal effects to de facto situations resulting from void acts’. And, from the point of view of voidable acts, the same Codigo prescribes that voidable acts ‘produce effects in law, which can be retroactively destroyed’ (article 163). The Portuguese approach provides a good synthesis of the treatment of effects derived from invalid acts. Both techniques have advantages and disadvantages. Voidness has the advantage of permitting the exclusion, at any time, of any effects considered as undesirable or intolerable for the legal system: these can be related to objective situations (e.g., the abovementioned res extra commercium) or subjective situations (e.g., bad faith/mala fides, which is the case of the actes frauduleux in France.14 But, as some effects of these void acts may deserve protection, any permanent quashing will have to examine the application of retroactivity and the defense of acquired rights (iura quaesita), an operation which will considerably rely on the role of the judges. Voidability has the advantage of greater stability. The problem of retroactivity and acquired rights will be restricted to the acts that were timely quashed. Whenever the time limit is reached, the effects of the act will not be reviewable (at least through the means of invalidity) and, consequently, will be consolidated. But voidability sometimes might be incapable of adequately protecting the Rule of Law, because it assumes that any effect can be legally acquired, even those in open conflict with the essential principles of the legal system.

5. CONCLUSION A comparative view of administrative legality in the Western tradition shows that AngloAmerican, European and Latin American legal thought: (1) have received the concept of original invalidity; (2) have developed one or both of its species; and (3) have taken into consideration the functions pursued by at least one of them. Two main reasons explain this situation: a common background heavily influenced by Roman law, and an explicit or implicit recognition of an ontological approach on norms. 14

  E.g., CE, 12 April 1935, Sarovitch, Rec. 520.

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Voidness and voidability of unilateral administrative acts  433 Should the dichotomy voidness-voidability be maintained? Authors differ on this point, and some opinions describe this subject as merely being scholarly. However, it is reasonable to think that a conceptual framework such as the voidness-voidability dichotomy would not have survived for around two millennia if it lacked theoretical and practical benefits. It seems, at least partially, that concerns about this dichotomy are fostered by the restrictive view generally developed by modern Western administrative law towards voidness. Contemporary administrative regimes seem to be strongly inclined in favour of voidability, because of its straightforward promotion of stability. However, legislators, judges and jurists in general should take into account that this might be (and almost surely is) achieved at the cost of granting automatic official protection to some cases of unlawfulness. In fact, the choice of voidness is the choice of the recognition of essential, nonnegotiable values, principles or rules. If none are recognized as such, voidability will be an absolute norm and effects whatsoever will be protected after a certain time or after an ex post validation of the act. But if a system is built on their effective integration, related to legal consequences, it will grant a role to voidness. The preference for its extension can vary. For example, as a severe respect of the principle of legality is regarded per se in Chile as an essential component of the Rule of Law, this country has adopted a monism built on voidness. The US, as stated above, has adopted a dualistic approach granting an important role for voidness, in state as well as federal law. France has taken the path of developing topically, by means of judicial review, the cases of essential values through the categories of actes inexistants and actes frauduleux, preferring a dualism with predominance of voidability. Spain chose to differentiate the area of administrative acts of general effects, where a monistic voidness is applied, from the one of administrative acts of individual or restricted effects, where a dualistic regime tending to favour voidability is applied. And England seems to be heavily inclined towards voidability, although tools for promoting the reception of voidness stricto sensu seem available. No predefined solutions for conceiving invalidity in administrative law should be imposed. Any preference must respond to national characteristics and legal traditions. But the conceptual background of this dichotomy should be taken as a relevant element in the understanding of this discipline and, as such, jurists must take that background into account. And, in particular, the study of comparative law can shed some lights on the difficulties and perspectives of the role played by voidness and voidability in the Rule of Law.

REFERENCES Alcindor, Léon. 1912. Des différentes espèces de nullités des actes administratifs. Paris: Giard et Brière. Aubry, Charles and Charles-Frédéric Rau. 1839. Cours de droit civil français traduit de l’allemand de M. C. S. Zachariae. Strasbourg: Lagier. Auby, Jean-Marie. 1951. La théorie de l’inexistence des actes administratifs. Paris: Pédone. Beatson, Jack, Mark Elliott and Martin Matthews. 2011. Administrative Law. Text and Materials. Oxford: Oxford University Press. Biondi, Biondo. 1965. Istituzioni di diritto romano. Milano: Giuffrè (4th edition). Bocksang Hola, Gabriel. 2013a. L’inexistence juridique des actes administratifs. Paris: Mare et Martin.  Bocksang Hola, Gabriel. 2013b. ‘La inexistencia jurídica de los actos jurisdiccionales’, Revista Chilena de Derecho, 40 n. 2 (2013): 577–608.

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434  Comparative administrative law Bocksang Hola, Gabriel. 2015. El nacimiento del derecho administrativo patrio de Chile (1810–1860). Santiago de Chile: Thomson Reuters. Cane, Peter. 2016. Controlling Administrative Power. An Historical Comparison. Cambridge: Cambridge University Press. Craig, Paul. 2012. Administrative Law. London: Sweet and Maxwell (7th edition). De Soto, Jean. 1941. Contribution a la théorie des nullités des actes administratifs. Paris: Imprimerie R. Bernard. Dromi, Roberto. 2000. Derecho administrativo. Buenos Aires: Ciudad Argentina (8th edition). Endicott, Timothy. 2015. Administrative Law. Oxford (3rd edition). González Navarro, Francisco. 1997. Derecho administrativo español. III. El acto y el procedimiento administrativos. Pamplona: EUNSA. Gordillo, Agustín. 2011. Tratado de derecho administrativo. Tomo 3. El acto administrativo. Buenos Aires: Fundación de Derecho Administrativo (10th edition). Guzmán Brito, Alejandro. 1996. Derecho privado romano. Santiago de Chile: Editorial Jurídica de Chile. Hamilton, Alexander, James Madison and John Jay. 2009. The Federalist Papers. New Haven: Yale University Press. Kaser, Max. 1980. Römisches Privatrecht (translation to English of the 10th edition by Rolf Dannenbring). Pretoria: University of South Africa. Laferrière, Edouard. 1887. Traité de la juridiction administrative et des recours contentieux. Paris: Berger-Levrault. Levin, Ronald M. 2011. ‘Statutory time limits on judicial review of rules: Verkuil revisited’, in Cardozo Law Review 32(6): 2203–39. Mommsen, Theodor. 1871. Römisches Staatsrecht (translation to French, Le droit public romain, 1889, t. V). Paris: Thorin. Planiol, Marcel. 1908. Traité élémentaire de droit civil. Tome premier. Paris: LGDJ (5th edition). Plessix, Benoît. 2003. L’utilisation du droit civil dans l’élaboration du droit administratif. Paris: Editions Panthéon Assas. Ponte, Davide. 2015. La nullità dell’atto amministrativo. Milano: Giuffrè. Romano, Santi. 1937. Corso di diritto amministrativo. Padova: CEDAM. Samper Polo, Francisco. 2003. Derecho romano. Santiago de Chile: Ediciones Universidad Católica de Chile. Silva Cimma, Enrique. 1995. Derecho administrativo chileno y comparado. Actos, contratos y bienes. Santiago de Chile: Editorial Jurídica de Chile. Singh, Mahendra. 2001. German Administrative Law in Common Law Perspective. Berlin: Springer. Soto Kloss, Eduardo. 2012. Derecho administrativo. Temas fundamentales. Santiago de Chile: Thomson Reuters. Wade, Sir William. 1967–8. ‘Unlawful administrative action: void or voidable?’, The Law Quarterly Review, 83: 499–526, and 84: 95–115. Wade, Sir William and Christopher Forsyth. 2009. Administrative Law. Oxford (10th edition). Zanobini, Guido. 1958. Corso di diritto amministrativo. Volume primo. Principî generali. Milano: Giuffrè.

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26.  The powers and duties of the French administrative law judge Jean Massot

To explain the specificity of the ‘office of the administrative judge’ in a country like France, it is necessary to look both to history and to geography. History allows us to understand how this Napoleonic creation, whose original aim was in no way the protection of the citizen against the administration (rather, it was the protection of the latter against interference by citizens and ordinary judicial courts)1 progressively became both an extremely powerful judge and an institution at least as independent as its judicial counterparts. Geography helps to explain how specialized administrative courts have long since ceased to be a specifically French or even continental European institution (they exist, in some form, in Austria, Belgium, Germany, Italy, Luxembourg, and the Netherlands). One also finds similar judges in countries as various as the majority of francophone African states, Egypt, Lebanon, Turkey, Thailand, and Colombia, to name just a few.2 There must be a reason that an independent administrative judiciary on the French model exists in numerous democratic countries or in countries transitioning to democracy. In this chapter, I will try to show that it is precisely in the way the powers and duties of the administrative judge have developed that one finds a good deal of the justification for the institution’s existence. On the level of mission (Part 1 below), I will show that the French system of administrative justice has all powers needed to fulfill its role but that its judicial duties are not quite like those of other courts. And on a more functional level (Part 2 below), I will show that the French administrative judiciary has never lost sight of its responsibilities even as it has also understood how to develop its powers in new ways.

1. THE MISSION OF THE ADMINISTRATIVE JUDGE: INDEPENDENCE IN SERVICE OF THE GENERAL INTEREST 1.1  Independence: the First Duty and the Basis of the Administrative Judge’s Powers A court will never merit the confidence of litigants, so necessary in the administration of justice, unless the parties understand that the court issues its rulings in complete

1   The paralysis of the royal administration of the ancient régime, caused by the Parlements (which were, in fact, judicial bodies), is often considered one of the causes of the French Revolution and was a prime impetus for the French conception of separation of powers, in which the judicial courts lack jurisdiction over administrative acts of the State. 2   At the ceremonies in 1999 celebrating the bicentennial of the founding of the French Conseil d’Etat, nearly 50 countries were represented.

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436  Comparative administrative law i­ ndependence. In the case of the French system of administrative justice, this requirement has given rise to a number of developments over time, some deeply historical, others more recent. As a consequence of these developments, it is less and less common to see challenges to the independence of the French administrative judge. 1.1.1  Development of the duty and its legal guarantees The oldest guarantees of the duty of independence concern the status and career of the French administrative judge. The system of administrative justice in France benefits from several guarantees that have insulated it from political pressure except perhaps during the most severe historical crises (like the Nazi occupation, the upheaval following the Liberation, or in the atmosphere of near civil war at the end of the Algerian War in 1962). One can cite in this regard rules governing competitive recruitment (the concours),3 which precludes political authorities from influencing the power of selection of judges; rules mandating promotion by seniority as well as control by the administrative judges themselves of the nominations to the most important positions within the Conseil d’Etat; and, for the inferior administrative courts, promotion overseen by an independent body, the Conseil supérieur des tribunaux administratifs et des cours administratives d’appel (the High Council of Administrative Tribunals and Administrative Courts of Appeal).4 The law also prohibits the reassignment of lower administrative judges and magistrates without their consent,5 and their discipline is under the jurisdiction of the same High Council. Among the traditional rules intended to protect independence in the French administrative justice system are those relating to collegial decision-making and the strict respect for the secrecy of deliberations. Admittedly, as to collegiality, there has been a recent trend toward allowing single judges to issue decisions in certain contexts, generally in the simplest cases. But the so-called juge unique can also act in more sensitive contexts where emergency procedures are invoked (a topic to which I return below), and the overall effect is to interfere somewhat with the normal requirement of collective decision-making. Fortunately, only the most experienced judges may serve as a juge unique.6 Independence and impartiality have long been a quality of French administrative justice. But recently there have been efforts to reinforce not merely the reality of this quality, but also its perception. This effort has been in response to a concern often expressed by the European Court of Human Rights (ECtHR), drawing from English law: 3   This is subject to the exception that, for certain superior ranks, the government has at its disposal a right of nomination (known as the tour extérieur), whose proportions are progressively limited and under conditions that are increasingly precise. 4   This body is chaired by the Vice-President of the Conseil d’Etat (the de facto head of the CE) but the inferior judges themselves are well represented on it, with five out of the 13 members. Moreover, together with these five, a majority of this body is drawn from the ranks of administrative judges themselves (in addition to the Vice-President of the CE, two additional councilors of state). 5   Article L231-3 of the French Administrative Court Code (the Code de justice administrative, or CJA). 6   For example, in the case of the Conseil d’Etat, the vast majority of single-judge rulings are rendered by presidents of judicial sub-sections; that is, among the highest-ranking members of the CE (councilors of state) with at least 20 years of experience as administrative judges.

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The powers and duties of the French administrative law judge  437 ‘Justice must not only be done, it must be seen to be done.’7 There has been a longstanding tension between the ECtHR and various councils of state throughout Europe (for example, in Luxembourg, the Netherlands, and France) that has flowed from the dual role these bodies generally play as both policy advisers to their governments and judges of the legality of their governments’ administrative acts. Insofar as France is concerned, a decree of March 6, 2008 largely resolved this tension by explicitly codifying existing custom as well as prior case law. Henceforth, members of the Conseil d’Etat may not participate in judging claims that challenge the legality of a text upon which they, as participants in one of the Conseil d’Etat’s administrative sections, previously ‘took part in the deliberation of the advisory opinion (avis)’ to the government on the same text. This decree has consequently led to the recomposition of certain judicial formations within the Conseil d’Etat. Fortunately, in a unanimous decision of June 30, 2009, the ECtHR ruled that if no member of the relevant judicial section of the Conseil d’Etat had previously participated in the deliberations on an avis on the legal text at issue in the case, ‘the concerns [of the challenging party] as to the independence and impartiality of the judicial section . . . cannot be considered objectively justified’.8 It goes without saying that, even without this ruling, the French Conseil d’Etat has always tried to ensure the respect of independence and impartiality by those bodies which are subject to its oversight, either by ‘appeal’ or ‘cassation’.9 In this vein, the administrative courts adopted an ethics charter in 2011, enforced by an oversight body of three members drawn respectively from the Conseil d’Etat, the lower administrative tribunals, and one external member. The importance of the role of this body is reflected in the number and length of the opinions it issues: in excess of ten per year regarding alleged problems of conflicts of interest that might emerge from the fact that members of a judicial formation exercise, or have exercised, functions in the active administration. This soft law approach was recently converted into a hard law mechanism through a bill adopted on April 20, 2016. The law includes provisions that go beyond the rules governing declaration of interests that are now in force in the civil service.

  This adage is usually traced to Lord Chief Justice Hewart in the McCarthy decision of 1924.   Union fédérale des Consommateurs Que Choisir de Côte d’Or v. France, no. 39699/03, ECtHR (Fifth Section), June 30, 2009. It is interesting to note that the decision of the CE under challenge here had been issued long before the decree of March 6, 2008 came into effect, thus confirming that the CE respected the now-codified rule as a matter of custom and practice. 9   The CE’s jurisdiction on ‘appeal’ is roughly equivalent to what Americans would call ‘de novo’ review on all questions of fact and law, though in France this power is also limited to review of the determinations of a very limited number of specialized jurisdictions. More typical is the CE’s ‘cassation’ jurisdiction, which applies more broadly and extends only to ‘quashing’ decisions below for errors of law. Hence, ‘cassation’ is more analogous to what Americans call ‘appeal’ (for example, in the sense described by Merrill 2010). Regardless of the scope of review, the CE’s oversight of impartiality and independence has given rise to a very significant jurisprudence, less with regard to ordinary administrative tribunals (where challenges on this point are rare), than with specialized jurisdictions, particularly those responsible for discipline cases within the civil service and professional orders. See, for example, the Didier decision of December 3, 1999, reprinted in Les Grands arrêts de la jurisprudence administrative (ed. 2015) (hereafter ‘GAJA 2015’), no.98 p.705. 7 8

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438  Comparative administrative law 1.1.2 The consequence of independence: the extensive powers of the French administrative judge This independence, long established in practice and more recently embodied in texts, has allowed the French administrative judge, over time, to develop its powers in more and more extensive terms. Indeed, as compared to its counterparts elsewhere in Europe, the French administrative judge has perhaps some of the broadest range of powers. The administrative judge in France not only has authority to hear actions for damages (socalled plein contentieux) but also actions seeking annulment of administrative acts as ultra vires (the recours pour excès de pouvoir), something that in other European countries is often limited to certain categories of acts, whether to those of an exclusively individual or an exclusively regulatory character depending on the system. Moreover, in ruling on these various types of claims, the French administrative judge has at its disposal a broad range of remedial powers often not available to other European judges. This authority is subject to three broad limits flowing from the hierarchy of norms. First, the French administrative judge is subject to the supremacy of legislation and therefore must yield to a so-called ‘validation law’ (une loi de validation) by which the Parliament renders retroactively legal what the administrative judge had previously held to be illegal. Second, in explicit cases of conflict, the Conseil d’Etat recognizes that the constitution necessarily prevails over treaties and acts of the European Union.10 Finally, the Conseil d’Etat does not have authority to control the conformity of legislation with the constitution. But even this last limit, as a consequence of judicial innovation,11 has lost a good deal of its force in the European integration context. Since 1989, the French administrative judge has followed the approach established a few years previously by the judicial courts, which permits the non-application of otherwise valid domestic legislation on the basis of its nonconformity with international agreements, most importantly the European Convention on Human Rights (ECHR) and the EU treaties, whose provisions often include demands of a constitutional nature.12 A constitutional amendment of July 23, 2008, authorized a further curtailing of these limits. This legislation permits lower judicial and administrative courts to make, in effect, preliminary determinations regarding the possible nonconformity of legislation with the constitution. If a litigant raises such a question, the lower court may disregard the challenge if the court finds that it is not of a sufficiently serious character. If the court concludes, however, that the question is indeed serious, the legislation will require the lower court to refer the matter to one of France’s two supreme courts (the Conseil d’Etat for the administrative courts, and the Cour de cassation for the judicial courts). If one of these supreme courts, once again exercising a filtering function, also finds that the question is serious, then it will refer the matter to the Conseil constitutionnel. Since the entry into force of this new procedure in March 2009, the Conseil d’Etat has yearly referred between 40 and 60 questions prioritaires de constitutionnalité (QPC) to the Conseil 10   See the decision of the highest judicial formation in the CE, the Assemblée du contentieux (Ass.), Octobre 30, 1998, Sarran, Levacher et autres (GAJA 2015, no.96, p.686). The scope of this jurisprudence was recently limited in the context of European integration in CE Ass., February 8, 2007, Sté Arcelor atlantique (GAJA 2015, no.109, p.831). 11   CE Ass., October 20, 1989, Nicolo (GAJA 2015, no.87 p.605). 12   This permits, for example, the disregard of validation laws that the CE judges are insufficiently of a general interest character.

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The powers and duties of the French administrative law judge  439 constitutionnel, which has declared the legislation under challenge to be unconstitutional, in whole or in part, in approximately one-quarter of those referrals. 1.2 Safeguarding the General Interest: The Specific Duty of the French Administrative Judge To understand the responsibility of the administrative judge with regard to the general interest, it is good to recall here a celebrated passage from one of the seminal rulings in French administrative jurisprudence: the Blanco decision of Tribunal des conflits, issued February 8, 1873.13 ‘The State’s responsibility is neither general nor absolute; it has its special rules that vary according to the service [that the State is providing to the public] and the need to reconcile the State’s rights with the rights of individuals.’ It would take a complete course in French administrative law to describe how the administrative judge, by way of judicial decision and in the absence of precise texts limiting its creative powers, has constructed a body of rules that seeks to strike a proper balance between the rights of the administration and individual rights. I will only mention a few doctrines that have emerged out of this jurisprudential construct. In the first place, of course, is the doctrine of service public (‘public service’). This seeks to protect the rights of puissance publique (‘public authority’) by affirming the principle of ‘continuity’ while also protecting private rights through the principles of ‘equality’ and ‘neutrality’ of public services. From this doctrine others have developed that reflect a similar concern for reconciliation and balance. One example is the doctrine of ‘public markets’, which holds that the administration may unilaterally modify public contracts, subject to protections for private contractors on the basis of unforeseeability, competition law,14 and above all legal certainty (a topic to which I will return below). We could also illustrate the point by referring to the doctrine of public property or that of civil service (la fonction publique), the latter with the now famous distinction between the wrongs of the public service generally (une faute de service) and wrongs of an individual member of the service committed under colour of law (une faute personelle). This distinction found a particularly vivid illustration in the Papon decision of the Assemblée du contentieux (the highest judicial formation in the French Conseil d’Etat) issued on April 12, 2002.15 One could also point to the notion of administrative liability flowing from the Blanco decision of 1873, which has recently seen a spectacular development as a consequence of the recognition of state liability for simple negligence in cases involving certain kinds of judicial malfeasance.16 13   TC, February 8, 1873, Blanco (GAJA 2015, no.1, p.1). The Tribunal des conflits is composed of an equal number of members from the CE and the Cour de cassation and is charged with protecting the particular character and jurisdiction of the administrative judge. 14   Regarding the role of competition law in public markets, see the decision of the second highest judicial formation of the CE, the Section du contentieux (Sect.), November 3, 1997, Sté Million et Marais (2015), no.95, p.675; see also CE Ass., April 4, 2014, Département de Tarn et Garonne (GAJA 2015, no.116, p.910). 15   This decision held that, by participating in the deportation of Jews during the German occupation, the defendant, an eminent civil servant, committed a faute personnelle that built on a faute de service (GAJA 2015, no.104, p.776). 16   These cases generally involve claims of excessive delay, a question to which I will return below. See, e.g., CE, February 27, 2004, Mme Popin (GAJA 2015, no.106, p.796).

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440  Comparative administrative law This creative power (or duty?) of the administrative judge does not consist solely in unilaterally protecting the administration, but also in reconciling the general interest with the interests of individuals. By way of evidence, one could usefully recall the administrative judge’s development of so-called ‘general principles of law’ as an additional basis for controlling the legality of administrative acts. These principles are a strong illustration of the ambition of the French administrative judge to protect private interests while also respecting the general interest. For example, the manner in which the administrative judge applies the principle of equality, or how the court permits derogations from that principle only for reasons of the general interest, would itself merit an extensive discussion.17 It is precisely here that one finds perhaps the best justification for the existence of a specialized administrative jurisdiction, though it is not possible, within the confines of this brief chapter, to spell out the reasons in greater detail. Rather, let me now turn more specific­ ally to the functioning of administrative justice in France, which will allow us to better understand the continuing, symbiotic relationship between the powers and duties of the French administrative judge.

2. THE OPERATION OF THE ADMINISTRATIVE COURTS: AFFIRMING NEW DUTIES THROUGH THE EXTENSION OF POWERS 2.1  Classical Duties and Powers I will pass quickly over the most classical duty belonging to any judge, the French administrative judge included, namely the obligation to fully address the arguments of the parties before the court, with firmly supported reasoning, respecting the adversarial principle. Rather, allow me to address three further questions: How easy is it for claimants to gain access to administrative justice in France? Should the administrative judge confine him or herself only to the arguments raised by the parties? And must the court respond to all arguments when only one need be addressed in order to dispose of the case? 2.1.1  Access to justice Access to administrative justice in France manifests itself above all in the reasonably flexible conditions for admissibility (‘justiciability’ in American parlance) as well as in the relatively low costs to the parties to maintain an action. We need not dwell in detail on the conditions for admissibility. Beyond respecting certain relatively strict time periods and certain somewhat more flexible formal requirements whose evolution is not of great import, broad access to justice is generally reflected in the progressive liberalization of the law of standing (intérêt à agir). Once again, this entails a purely judicial construction. The majority of leading decisions date from the beginning of the twentieth century. They recognize, for example, taxpayer standing against local acts as well as the standing of users

17   Normally one traces the recognition of the general principles of law to the decision of the CE of March 9, 1951, Sté des concerts du conservatoire (GAJA 2015, no.61, p.387), which focuses primarily on the principle of equality.

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The powers and duties of the French administrative law judge  441 of public services and that of trade unions. They exclude, however, taxpayer standing against national acts as well as the standing of civil servants challenging organizational measures that do not injure one of their legal prerogatives. In effect, the administrative judge has sought to prevent the transformation of the recours pour excès de pouvoir into what the ancient Romans called the actio popularis. Accessibility is further reinforced by the right of claimants to bring many actions without retaining a lawyer (at least in the jurisdiction of first instance) or, for meritorious claimants, for bringing actions without incurring any court costs. On the other hand, to avoid the risk of overwhelming the docket of the Conseil d’Etat, and in the interest of the ‘sound administration of justice’, the supreme administrative jurisdiction requires representation of counsel when it is serving in its capacity as the judge of errors of law (juge de cassation)—that is, only after two lower levels of review have been exhausted. It is a historical particularity of French justice that a limited, specialized bar of supreme court litigators (avocats aux conseils) has the exclusive right to represent clients before the Conseil d’Etat and the Cour de cassation.18 As for costs, the law requires that the judge always impose them on a losing administrative body but then gives the judge discretion not to impose them on a good faith plaintiff who nevertheless did not prevail in its claim. 2.1.2  Consideration of the grounds raised (or not raised) by the parties Of course, the adversarial principle requires that the grounds raised by a party be communicated to the opposing party and that a reasonable time be allowed for response. More delicate, however, is the question of whether the judge may raise issues of its own motion, in effect coming to the aid of the parties. In French law, these are called grounds raised ex officio (moyens soulevés d’office) or more often grounds of public policy (moyens d’ordre public). These grounds implicate issues of such great importance that the court, by failing to take them into account, would itself undermine the rule of law, which is of course the judge’s primary mission to uphold. The doctrine of moyens d’ordre public is old and well settled. First, it requires that the judge consider all possible admissibility arguments even if the defendant administrative body has failed to raise the particular issue. Second, the doctrine requires the court to consider all possible arguments regarding the lack of legal authority (l’incompétence) of the administrative body. Finally, it requires the court to determine for itself the scope of any pertinent legislation, whose misinterpretation might lead the judge to apply a legal text that is in fact inapplicable.19 However, since a decree of January 22, 1992, the judge must, out of respect for the adversarial principle, communicate to the parties any ­argument that it raises of its own motion. 2.1.3  Decisional economy Traditionally, the French administrative judge has practiced what is called l’économie de moyens, or ‘decisional economy’. That is, if the court determines that one ground is 18   In this regard, see the decisions, CE, December 21, 2001, M. et Mme Hofmann, and CE, December 17, 2003, Meyet et autres. 19   There is, however, disagreement between the CE and the Cour de cassation as to whether the judge must raise of its own motion the noncomformity of domestic law with EU law. The CE says no, the Cour de cassation says yes.

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442  Comparative administrative law s­ ufficient to decide the case, even a ground raised of its own motion, then it need not reach the other grounds raised by the parties. In addition, the administrative judge combines this practice with a standard approach to considering the legal issues raised in the complaint: first any claims of incompétence, then any assertions of formal or procedural invalidity (vice de forme), and finally any substantive grounds warranting reversal. That said, the court remains free to choose the grounds it regards as dispositive of the case and can rule on the substance without pronouncing on the admissibility of the complaint, the legal authority of the administrative actor, or its respect for formal or procedural requirements. The only thing prohibited to the court is the misinterpretation of its own jurisdiction in the matter. From all this often results such a brief decision that, although it meets the minimum requirements for reason-giving, often leaves the parties unsatisfied. The recent trend has in fact been toward more didactic decisions that rule in depth and explain in a very thorough fashion the appropriate conduct of the administration, thus breaking with the tradition of ‘imperiatoria brevitas’.20 2.2  New Duties and Powers 2.2.1  Rulings within reasonable time periods French administrative justice has long been fairly accused of excessive delays in issuing its rulings. This practice is increasingly untenable, particularly given the increasingly severe demands imposed by the ECtHR in Strasbourg as to the interpretation of the requirements of Article 6(1) of the European Convention of Human Rights.21 France, like other European states, has found itself regularly condemned under Article 6(1) for excessive delays, not just in administrative justice but also in the ordinary judicial courts.22 In addition, in a decision of June 22, 2002, Minister of Justice v. Magiera, the Conseil d’Etat has itself taken the initiative to create a new cause of action for state liability based in simple negligence for excessive judicial delay, whereas the normal basis for liability in the context of judicial malfeasance is gross negligence.23 Indeed, the second highest judicial formation of the Conseil d’Etat, the Section du contentieux, recently extended this jurisprudence to a case where the victim of excessive delay24 was a local government and not a private ­government contractor.25 However, to prevent this new cause of action from itself precipi­ tating excessive delays, a decree of July 28, 2005 gave the Conseil d’Etat original jurisdiction to hear liability claims arising from the conduct of the inferior administrative courts. 20   In this regard, compare the length of the major decisions reported in GAJA (2015) often cited in this chapter. The early ones at the beginning of the volume are generally only a half-page, those toward the end generally reach three pages. 21   Article 6(1) provides in pertinent part: ‘everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law’ (emphasis added). 22   For an example involving French administrative justice, see the judgment of the ECtHR (Third Section), November 9, 2006, Sacilor Lormines, no. 65411/01. 23   Another exception is in the context of a violation of EU law. See CE, June 18, 2008, Gestas. 24   More than 11 years, including all levels of jurisdiction, in a matter that was admittedly very complex. 25   CE Sect., July 17, 2009, Ville de Brest.

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The powers and duties of the French administrative law judge  443 Numerous reforms have been adopted to address the slow pace of administrative justice in France. The first and most important was the 1987 legislation establishing the intermediate Administrative Courts of Appeal (the Cours administratives d’appel, CAA) between the Administrative Tribunals (the Tribunaux administratifs, TA) and the Conseil d’Etat. The 1987 legislation also permitted the Conseil d’Etat, in its supreme court role, to avoid getting itself enmeshed in the merits of each and every petition for review by giving the high court the power to select only those matters that raise significant questions of law. This filtering function is important because it breaks from the traditional obligation of the Conseil d’Etat to fully examine all issues brought before it by the parties.26 This new filtering function brings the French practice closer to that of other national supreme courts, which often allow even more rigorous triage of the petitions heard on the merits.27 However, to the extent that remanding a case to the CAA might itself raise too great a risk of delay, the 1987 law also wisely allows the Conseil d’Etat to proceed directly to final judgment, disposing of all aspects of the matter ‘if the sound administration of justice justifies it’. A second line of reform has involved creating more judicial formations composed of ever fewer judges, reserving only the most delicate matters for the traditionally larger formations within the various administrative courts. Within the Conseil d’Etat itself, for example, of the 10,000 cases before it in 2013 as in 2014, the high court disposed of half by an order of a juge unique, just over a third by smaller colleges of three judges, leaving only the remainder to be handled by the larger formations (primarily nine-judge panels taken from two of the ten judicial subsections, as well as the larger Section du contentieux and the Assemblée du contentieux for the most sensitive and important matters). When I joined the Conseil d’Etat 52 years ago, in fact, the nine-judge panels handled nearly all the cases, four times less numerous than today. Finally, from the perspective of speed, surely the most important change has been legislation adopted June 30, 2000, largely at the urging of the Conseil d’Etat itself, which created emergency procedures truly worthy of the name. On the one hand, this legislation permits the administrative judge to suspend the execution of a challenged administrative decision upon an emergency application where there is serious doubt about the measure’s legality. On the other hand, this law allows the court to prescribe emergency measures enjoining grave and manifestly illegal violations of a fundamental liberty. An example of the first category (the référé suspension) is the ruling of February 15, 2006 preventing the decommissioned aircraft carrier Clemenceau from leaving the French port for asbestos removal in India; this proceeding took less than three weeks. Examples of second category (the référé liberté) are particularly numerous in the context of immigration and asylum litigation.28 Another recent example of the application of this new procedure is the Lambert case, which involved aggressive end-of-life measures that gave rise to two decisions in 2014, one of February 14 and the second of June 24.29 The case involved 26   In practice, this new approach allows the CE to eliminate, as soon as they are filed, nearly half of the petitions for review because they do not raise serious questions of law. 27   The prime example, of course, is the United States Supreme Court. 28   See the commentary following the decisions CE. Sect., January 18, 2001, Commune de Venelles, and CE, March 5, 2001, Saez (GAJA 2015, no.100, p.725). 29   GAJA 2015, no.117, p.921.

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444  Comparative administrative law a challenge to a decision by doctors and the wife of a irretrievably comatose patient to terminate artificial feeding and hydration. The parents of the patient sued (in a manner reminiscent of the Terri Schiavo case in the United States in the late-1990s and early2000s). The matter eventually made its way to the European Court of Human Rights, which, consistent with the Conseil d’Etat, ruled that the medical care could in fact be terminated. The parents, however, instituted new proceedings to stay the decision and the case is in fact still pending. By 2015, with delays in France generally reduced to one year for each level of review, the administrative justice system could be said to have broadly satisfied the requirement of issuing its rulings within a reasonable time period. The situation is slightly less satisfactory if one focuses exclusively on so-called ‘ordinary’ administrative cases, that is, those not handled by an order of a juge unique. In those contexts, delays can still reach as much as 12 months in the Conseil d’Etat, 14 months in the CAAs, and 20 months in the TAs. 2.2.2  Moderating the effects of rulings in the interest of legal certainty Increasing attention to concerns over legal certainty have prompted the French administrative judge to change two traditional principles: first, the retroactive effect of an annulment of administrative acts under the recours pour excès de pouvoir; and second, the immediate application, in other pending disputes, of newly announced judicial rules that constitute a change in the law. As to retroactivity, the key development was the decision of the Assemblée du contentieux of May 11, 2004, in Association AC! et autres.30 The principle of retroactive effect in an annulment action is itself rooted in judicial decision. The challenged act, once nullified, is understood never to have existed, with the consequence being that any actions taken pursuant to the invalidated act also become illegal. It has long been recognized, however, that this retroactivity could have devastating effects. For example, it might render illegal, sometimes three to five years later, a cascade of regulatory measures including those relating to the collection of taxes. Or it might nullify an individual decision that had long previously taken force, like the selection of a civil servant for a new position. It is retro­ active effect, incidentally, that has given rise to the practice of so-called ‘validation laws’. To address these concerns, the Conseil d’Etat drew inspiration from the approach of the European Court of Justice in its application of provisions of the Treaty of Rome,31 which allow the ECJ to limit the retroactive effects of its declarations of annulment, as well as from similar approaches in Germany, Austria, and Italy. Consequently, since the decision of 2004, the Conseil d’Etat has recognized that it has the power, even without a textual basis, to moderate the effects of an annulment through a balancing of interests, whether of the administration or of private parties.32 As to the application of new judicial rules in pending litigation, the key development was the recent decision of the Assemblée du contentieux of July 16, 2007, in Sté Tropic   CE Ass., May 11, 2004, Association AC! et autres (GAJA 2015, no.107, p.804).   Ex Article 174, which became Article 231 of the EC Treaty (and is now Article 264 TFEU). 32   For example, a decision of March 3, 2009 delayed until September 1 the effects of an annulment for vice de forme of a regulatory text requiring that public transportation vehicles be made accessible to the handicapped. The purpose was to not render illegal the measures that had already been taken in the course of implementing this text. 30 31

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The powers and duties of the French administrative law judge  445 travaux signalization. Prior to this decision, where there was a change in the case law, the new rule announced by the judge would apply immediately. This meant that it would also apply in any pending litigation, thus potentially taking by surprise the parties who had never contemplated the possibility of this modification in the state of the law. Henceforth, ‘having due regard for the imperative of legal certainty’, the administrative judge,33 notably to avoid excessive interference with existing contractual relations, will be able to decide that a newly announced rule will only apply to past contracts prospectively.

CONCLUSION Old age does not always make innovation impossible. This is what I hoped to show with this brief overview, not with regard to my own advanced age, but rather with regard to that of the institution which I have had the honor of serving for over 40 years and which is itself over 200 years old. Guided by an often slight legislative and regulatory framework, judges on the Conseil d’Etat, and later those on the other French administrative jurisdictions, have been continuously attentive to the emergence of new duties and the need to develop new powers in response. The ever increasing number of filed cases—in 2014, 195,000 in the 30 metropolitan TAs,34 30,000 for the eight CAAs, and 10,000 for the Conseil d’Etat—show that the confidence of litigants persists unabated, something which the increasing and often successful use of emergency procedures also confirms.

REFERENCES Long, Marceau, Prosper Weil, Guy Braibant, Pierre Delvolvé, and Bruno Genevois (eds) (2015), Les grands arrêts de la jurisprudence administrative (GAJA), 20th edn, Paris: Dalloz. Merrill, T. (2010), ‘The Origins of American-style Judicial Review,’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, Cheltenham, UK: Northampton, MA: Edward Elgar.

 The Cour de cassation had similarly ruled a year earlier. See Ass. Plén., December 21, 2006.   There are also ten TAs in French overseas territories, but they receive only 7000 cases.

33 34

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27.  Judicial review of agency action in the U.S. and Israel: the choice between open and closed review Michael Asimow and Yoav Dotan*

A central issue in judicial review of administrative action is the determination of what materials a reviewing court is allowed to consider. Can the court consider evidence that the agency1 did not consider? Can it consider reasons that the agency did not assert when it took the disputed action? Can it consider arguments that the private party failed to make before the agency? Imagine a spectrum between completely closed and completely open review. At the closed end of the spectrum, the court would consider no new evidence (‘closed record’), no new reasons (‘closed reasons’), and no new arguments (‘closed arguments’). At the open end of the spectrum, the court would ignore everything that had occurred at the agency level; all of the evidence and argument would be new and the court would be indifferent to the reasons the agency gave for its decision. This chapter considers the U.S. and Israeli practice on this issue. The U.S. falls near the closed end of the spectrum and may have the most closed system of judicial review of any country. Most other countries use open review, either in courts of general jurisdiction or in specialized administrative courts (although in some countries the review of tribunal decisions is closed). Israel originally followed the British model of closed review as practiced in the U.K. around 1950, but changed course and now falls closer to the open end of the spectrum, although its practice is inconsistent. We seek to explain this difference and speculate about the relationship between openness of judicial review and other judicial review doctrines.2 The U.S. system relies heavily on the initial agency proceeding, whether the disputed decision is an adjudication, a rulemaking, or policy implementation (Asimow 2015). By statute, the initial decision procedure for most adjudication and rulemaking is legally prescribed. Judicial review is designed as a check against unreasonable agency action, not as the occasion for substitution of judicial for agency judgment. Consequently, closed judicial review is justifiable. In contrast, in Israel the law prescribes little or no procedure for agency adjudication, rulemaking, or policy implementation, and relies on the judicial review process to insure a correct and appropriate result. In important administrative law cases, the Israeli Supreme Court is the first and final reviewer. This system could not function well under closed review.

*  An earlier and lengthier version of this chapter was published in Asimow & Dotan 2016a. 1   The term ‘agency’ means a governmental unit (other than a court or legislature) having delegated power to implement government policy. 2   In another article, we considered the implications of the choice between open and closed review on the role of government attorneys who represent agencies on judicial review (Asimow and Dotan 2016b).

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Judicial review of agency action in the U.S. and Israel  447 Section 1 discusses closed judicial review practice in the U.S. while section 2 addresses open judicial review in Israel. Section 3 speculates on why the judicial review practices of the U.S. and Israel diverge.

1.  U.S. PRACTICE: CLOSED JUDICIAL REVIEW In general, the U.S. practices closed judicial review regardless of the type of agency action that is subject to review. It does not matter whether the action in question is formal or informal adjudication, rulemaking, or government policy-implementation decisions that are neither adjudication nor rulemaking. However, because U.S. courts recognize a number of exceptions to closed review, the U.S. falls near the closed end of the open/ closed spectrum but does not quite reach it. 1.1  Formal and informal adjudication We define adjudication as agency action of specific applicability. The norm in U.S. practice is formal adjudication, meaning that the agency conducts an evidentiary hearing to resolve disputes between the government and private parties (or occasionally between two private parties). Evidentiary hearings are often required by the due process clause of the federal constitution3 as well as by the Administrative Procedure Act (APA),4 by statutes applicable to particular administrative schemes, or by procedural regulations. However, formal adjudication by no means fills the administrative adjudicatory space. There are many schemes of adjudication with respect to which no legal authority requires an evidentiary hearing or, indeed, any procedure at all. We refer to these cases as informal adjudication. The term ‘formal adjudication’ is often used to describe only adjudicatory schemes covered by the APA. The initial decision-maker in APA adjudication is an agency official called an Administrative Law Judge (ALJ) who works for the deciding agency but has substantial decisional independence. However, we use the term ‘formal adjudication’ more broadly to include all legally required evidentiary hearings. For example, in deportation cases, a statute requires formal trial-type hearings, but the APA is inapplicable, meaning that the initial decision-maker is not an ALJ. In formal adjudication, the initial decision-maker must be impartial and cannot have any adversarial involvement in the case (such as having served as an investigator or ­advocate). The decision-maker cannot consider any evidentiary inputs except those introduced at the hearing (the ‘exclusive record’ rule). Judicial review of both formal and informal adjudication is closed. 1.1.1  Closed record The closed record is deeply rooted in U.S. legal culture. In ordinary litigation, an appellate court is confined to the record made before the trial court. Because of separation of

 U.S. Const. arts. V (federal government), XIV (state or local government).   5 U.S.C. §§ 551, 554, 556–7.

3 4

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448  Comparative administrative law powers, the closed record approach seems even more appropriate in the world of administrative adjudication, since the action under review was taken by a coordinate branch of government rather than by a lower court. Indeed, the APA judicial review provision (applicable to review of all types of agency action) requires that a court ‘shall review the whole record,’5 which at least implies a closed record. The closed record requirement reflects important efficiency concerns. In the case of formal adjudication, the hearing generates an organized and complete record for judicial review, consisting of the transcript of testimony and argument and documents submitted into evidence. It would be costly and cause significant delays if a reviewing court could make a new record by taking new evidence. Moreover, judicial review of formal adjudication often takes place in an appellate court rather than a trial court; appellate courts are not accustomed or equipped to conduct trials. In addition, judicial review is constrained by deference doctrines that would be undermined if a reviewing court could consider new evidence. Judicial review of agency factfinding is limited by the ‘substantial evidence’ test, meaning that the reviewing court must sustain reasonable findings of fact by the agency even if the court disagrees with them.6 If the reviewing court could consider new evidence, the court would become the factfinder and the ‘substantial evidence’ test would be negated. Moreover, if the court could consider new evidence, the private party would have a perverse incentive to hold back its best evidence until the judicial review phase, in order to deny the agency a chance to consider (and perhaps discredit) it. We refer to this undesirable practice as ‘sandbagging.’ 1.1.2  Closed reasons An agency must state the reasons for its action in order that a reviewing court can evaluate the rationality of that action. The reasons must be stated contemporaneously with the agency decision, not advanced for the first time at the judicial review level. The source of the ‘closed reasons’ rule is the first Chenery case.7 The two Chenery cases involved decisions by the Securities and Exchange Commission (SEC) requiring officers of a utility to relinquish a profit earned by converting preferred stock received while administering the company’s reorganization to common stock. The rationale for the SEC’s decision was that the insiders violated their fiduciary duties. The Supreme Court reversed, holding that the fiduciary duty rules did not support the SEC’s decision. The SEC argued that its decision could be justified by a different reason, namely its experience in administering utility reorganizations. However, the Supreme Court refused to consider this reason because it was a ‘post hoc’ rationalization offered for the first time on judicial review. The closed reasons rule is justified by separation of powers. The SEC is responsible for administering the securities law and it must make the initial decision about whether that law justified the sanction it imposed. Judicial consideration of post-hoc rationalizations would be inconsistent with the SEC’s statutory responsibility and would make the court, rather than the agency, the instrument of policy articulation. The closed reasons rule also makes good pragmatic sense. It promotes rigorous reason-

  5 U.S.C. §706.   5 U.S.C. § 706(2)(E). 7   SEC v. Chenery Corp. (Chenery I), 318 U.S. 80 (1942). 5 6

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Judicial review of agency action in the U.S. and Israel  449 ing, because agency staff and heads must settle on a rationale during the decision-making process. It also means that the agency’s reasons are determined by its professionals (such as scientists and experienced staffers) and by politically responsible agency heads, rather than by government lawyers on judicial review. In addition, the Chenery rule is justified by considerations relating to agency accountability. It forces agency heads to articulate their positions in overt ways that facilitate political oversight. Otherwise, the agency could avoid disclosure of its reasoning (and thus forestall a political backlash) if no party sought review or the case was settled. In all these ways, Chenery contributes to the integrity of discretionary decision-making. 1.1.3  Closed arguments The ‘closed arguments’ rule (also known as ‘issue exhaustion’) serves interests arising out of separation of powers, deference, and efficiency. The agency should have an opportunity to remedy a procedural defect or to apply its expertise to a policy objection before a court considers those issues. Moreover, the Chevron doctrine requires a court to uphold any reasonable agency interpretation of an ambiguous statute, whether the interpretation occurs in the course of adjudication or rulemaking.8 Chevron would be undermined if the court could entertain arguments about statutory interpretation that the agency never considered. 1.1.4  Closed review of informal adjudication The same closed review rules apply to judicial review of decisions reached by informal adjudication.9 However, the circumstances of formal and informal adjudication are quite different. In informal adjudication, an agency may never have conducted any kind of hearing and is not limited by the exclusive record requirement. Often, the agency makes its decision by considering economic or environmental studies and informally consulting the parties. Nevertheless, judicial review of informal adjudication decisions must be on the basis of a closed record, consisting of all materials considered by responsible agency staff members.10 These materials may consist of a large number of documents contained in many paper or electronic files. Assembling such a record poses serious practical difficulties. In addition, the closed reasons rule applies, even though the agency might not have been legally required to state reasons, and the closed arguments rule applies even though there might not have been an organized procedure by which the private parties could make arguments. Because of the differences between formal and informal adjudication, the case for closed review of decisions reached by informal adjudication is tenuous.

 8   Chevron U.S.A., Inc., v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). A related doctrine requires a reviewing court to uphold an agency’s interpretation of its own regulation unless plainly erroneous or inconsistent with the regulation. See Bowles v. Seminole Rock & Sand Co., 325 U.S. 412, 414 (1945).  9   As discussed above, informal adjudication means adjudication that is not conducted according to a legally required evidentiary hearing. 10   Camp v. Pitts, 411 U.S. 138, 142 (1973).

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450  Comparative administrative law 1.2 Rulemaking ‘Rulemaking’ is the process for adoption of ‘rules,’ meaning agency action of general applicability.11 The APA generally prescribes public notice and opportunity for comment before a rule is adopted.12 As developed by post-1946 case law and practice, the ‘notice and comment’ system generates a record for judicial review consisting of the documents prepared by the agency staff in formulating the rule, public comments, transcripts of public meetings, material such as scientific studies that the agency considers, required agency analyses (such as environmental impact statements), and a thorough statement of reasons. The statement of reasons must explain why the agency disagreed with any adverse public comments, if it chose not to conform the rule to those comments. Judicial review of rules is closed, meaning that neither side can introduce new evidence, the private party cannot make new arguments, and the agency cannot bring forth new reasons. The closure doctrines fit well with the APA rulemaking procedure, because the process generates a complete and organized record and a complete reasons statement. As in the case of adjudication, the rationale for closed record review of rules arises out of concerns with efficiency, separation of powers, and deference to agency expertise. In addition, judicial review of rules usually occurs in appellate courts before the rule is enforced; as a result, evidence about how it operates in practice is unavailable. The parties who seek pre-enforcement review are typically the same ones who were involved in the rulemaking process, so they have no new evidence or arguments to offer during judicial review, unless they have strategically held them back by ‘sandbagging.’ However, there are practical and theoretical arguments against closed record judicial review of rules that do not arise in connection with formal adjudication. The rulemaking record includes all materials ‘considered’ by the agency staff during the rulemaking process. There may be an immense amount of such material, so the record becomes quite unwieldy. Moreover, there are numerous conceptual and practical problems of deciding what the staff ‘considered.’ The agency must anticipate that its rule will be judicially challenged, so it must contemporaneously assemble and organize all this material in preparation for judicial review (which might never occur). The reasons statement must anticipate every possible objection that challengers to the rule might raise, which sometimes causes the statement to run to hundreds of pages. The closed argument rule requires challengers to raise every conceivable argument (without knowing what form the final rule will take), forcing them to submit voluminous comments. All of this is a major contributor to what U.S. commentators call ‘rulemaking ossification’ (for example, Pierce 1995). And the agency must do all of this for every rule it adopts (whether or not through notice-and-comment), even though many rules are never reviewed at all.

11 12

  In American practice, the terms ‘rule’ and ‘regulation’ mean the same thing.   5 U.S.C. § 553.

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Judicial review of agency action in the U.S. and Israel  451 1.3  Judicial Review of Policy Implementation Policy implementation includes agency decisions such as designing highway routes, approving state Medicaid rate adjustments, administering grant-in-aid programs managed by states, managing public institutions such as hospitals or prisons and countless other examples. Such decisions involve a mix of fact-finding, legal interpretation, law application, policy making, and policy application, mixed up with concerns about political repercussions, public relations, federalism, budget constraints, and public administration. The APA suggests that agency action is either rulemaking or adjudication. But this dichotomous approach works poorly when it comes to policy implementation. Policyimplementation decisions are neither adjudication (since they are not directed at specific private parties) nor rulemaking (since they do not establish general rules). Most policy implementation is not judicially reviewable, but some of it is. The case for closed record review of policy implementation is uneasy because the decision-making process does not generate a structured evidentiary record and assembling it is a laborious and deeply problematic process. The closed record should contain all of the materials that responsible staff members considered in making the decision. As a result, when preparing for judicial review, the agency staff must scrutinize vast quantities of disorganized and widely dispersed files. Similarly, the process may not give rise to a thoughtful agency statement of reasons and may not furnish an opportunity for the private parties to make arguments. The key decision about judicial review of policy implementation is Overton Park.13 The Department of Transportation (DOT) decided to provide funds to construct an interstate highway through a park in Memphis, even though a statute prohibited building roads through a park unless there is no ‘feasible and prudent’ alternative route. The agency did not explain how its decision was consistent with this statute. The process of planning the highway route consumed many years, involved a costly and contentious decision-making process, and was based on a complex mix of planning, political, and economic consider­ ations. There were numerous public hearings about the highway route, but no organized process for construction of a record. The Supreme Court held that the routing decision was reviewable for abuse of discretion. It ruled that review should be closed, meaning that it should be based on the record before the agency, rather than on a new record constructed at the judicial review stage.14 This holding is questionable, because the APA explicitly recognizes the possibility of de novo judicial review when an agency decision resulted from a process that did not generate an exclusive record.15 The Supreme Court distorted the legislative history of this

  Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971).   The Supreme Court ordered a trial to determine the DOT’s reasons for its decision to route the highway through the park. This resulted in a lengthy and indecisive proceeding. Citizens to Preserve Overton Park v. Volpe, 325 F. Supp. 873 (W.D. Tenn. 1972). This part of the Overton Park decision has been quietly abandoned. Camp v. Pitts, 411 U.S. 138 (1973). If the agency fails to state reasons for its action, the case should be remanded to the agency to do so. 15   ‘A reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be . . . unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.’ 5 U.S.C. § 706(2)(F). 13 14

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452  Comparative administrative law provision and held it inapplicable to the Overton Park situation (Nathanson 1975: 755–6, 763–8). 1.4  Exceptions to Closed Review Reviewing courts recognize a number of rather nebulous exceptions to the various closed review doctrines. In general, these exceptions (many of them questioned in academic writing and in case law) apply only to unusual circumstances justifying a departure from the general closed review rules. Because most cases do not present such circumstances, reviewing courts usually reject attempts to introduce new evidence, new reasons, or new arguments (Asimow and Dotan 2016a: 533–6).

2.  ISRAELI PRACTICE: OPEN JUDICIAL REVIEW In contrast to the U.S., Israeli case law contains relatively little discussion of the question of open or closed judicial review. Nevertheless, Israeli practice has moved away from the British practice of closed review to a position located closer to the open end of the spectrum. Despite the lack of developed doctrines, the Israeli practice of open review influences many aspects of administrative law and interrelates with major judicial review issues. Unlike the U.S., Israel has yet to adopt a comprehensive statute that regulates administrative procedures. The principles governing administrative procedure are largely the product of case law developed by the High Court of Justice (HCJ). The HCJ is the Israeli Supreme Court sitting in its capacity as the superior administrative court. Judicial review in Israel is carried out either by the HCJ, which functions as a court of first and last instance in the most important administrative cases, or by the administrative courts. The administrative courts are district courts sitting in administrative cases; they hear the bulk of the less important administrative cases. In the latter situation, the decisions of the administrative courts are subject to appeal before the HCJ. 2.1  Types of Administrative Procedure Israeli administrative law does not contain mandatory procedures for ‘rulemaking’ and ‘adjudication.’ Instead, following in the footsteps of U.K. administrative law, the case law distinguishes ‘quasi-judicial’ and ‘quasi-legislative’ actions. Quasi-legislative functions include the formation of regulations and administrative policies or guidelines. No general statutory procedure regulates the formation of regulations, except for the minimal requirement for publication in the official register.16 However, many specific statutes contain additional requirements of consultation or approval by a Knesset (parliamentary) committee.17 In addition, under guidelines adopted by the 16   See Interpretation Ordinance, 5714–1954, § 17, SH No. 166 p. 2 (Isr.); CrimA 213/56 Att’y Gen. v. Alexandrovitz 11 PD 695 (1957). 17   For example, there is a general requirement for approval by a Knesset Committee in case of regulations that carry potential criminal sanctions. See Penal Code, 5737–1977, ch. 1 (Basic Provisions), § 2(b).

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Judicial review of agency action in the U.S. and Israel  453 Attorney General, government authorities that adopt regulations must coordinate pol­ icies with other governmental units and consult experts and interested groups.18 Israeli law does not include notice-and-comment procedures and excludes quasi-legislative decisions from the requirements of natural justice that apply in adjudication cases (that is, a neutral decision-maker and a hearing at which the private party has an opportunity to tell its side of the story). Nevertheless, the Supreme Court imposed some important procedural requirements on agencies engaged in quasi-legislative decision-making. For example, it ruled that agencies must provide reasons for policy decisions in some cases.19 In addition, the HCJ established that agencies that create policies must conduct a rational decision-making process. The requirements include systematic data collection, data processing, consultation with experts, review of professional reports, formation of general policies, assessments of alternatives, and (in some cases) generation of reasoned decisions.20 These decisions do not amount to requiring agencies to create a record; as a result, discussion of the ‘record’ in the context of judicial review of quasi-legislative actions is virtually nonexistent. Quasi-judicial actions include individualized decisions such as licensing and state bene­ fits. Such decisions are subject to the requirements of ‘natural justice,’ such as the right to be heard, which are comparable to the U.S. requirements of administrative due process. Agencies are required to provide reasons for quasi-judicial decisions. However, natural justice does not require agencies to utilize adversarial procedures.21 2.2  The Three Stages of Adjudicatory Proceedings There are typically three procedural stages for adjudicative proceedings (Asimow 2015). The first is the initial administrative decision. In Israel, the initial decision is usually investigatory in nature and can be written by the investigator. Such proceedings are subject to the principles of natural justice. The decision-maker is required to give reasons.22 The second (or ‘reconsideration’) stage is often an appeal to an administrative tribunal that conducts a de novo merits review of the initial decision. Israel has no unified system of administrative tribunals, like those in the U.K. or Australia (Asimow 2015, 28). The statute that regulates a specific field may provide for an appeal to a tribunal and define the powers and procedures of the tribunal. The Administrative Tribunals Law of 1992 provides the procedural framework for administrative tribunals and ensures their independence vis-à-vis the agencies,23 but it only applies to those tribunals 18   Isr., Att’y Gen. Guideline No. 1.0001 (The Obligation to Consult Under the Law); Isr., Att’y Gen. Guideline No. 1.0002 (Administrative Guidelines). 19   HCJ 2159/97 Regional Council Hof Ashkelon v. Minister of Interior 52(1) PD 75, 88–89 (1998). See also the discussion of the requirement to provide reasons and the Administrative Procedure Amendment (Statement of Reasons) Law 1958, infra text following note 40. 20   See HCJ 297/82 Berger v. Minister of Interior 37(3) PD 29 (1983) (per Shamgar, J.); HCJ 987/94 Euronet v. Minister of Commc’ns 48(5) PD 412 (1994). 21   See HCJ 3/58 Berman v. Minister of Interior 12(2) PD 1493, 1504 (1958); HCJ 531/79 Siat Halikud v. City Council of Petach Tikva 34(2) PD 566 (1980). 22   Under the Administrative Procedure Amendment (Statement of Reasons) Law, 5719–1958, SH No. 264 p. 7. For an English translation of the law, see Zamir and Zysblat 1996, 196–210. 23   Administrative Tribunals Law, 5752–1992, § 3, SH No. 1385 p. 90.

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454  Comparative administrative law that are specified in the addendum to the statute. The Administrative Tribunals Law itself refers to the administrative record of agencies only indirectly in the context of the right of the appellant to have access to ‘documents in the possession of the authority relating to the decision,’ and does not confine the parties or the tribunal to such documents.24 The third stage (or the second stage if there is no tribunal or other form of administrative reconsideration) is judicial review conducted by either the administrative court or the HCJ.25 At this stage the reviewing court holds the power to grant any remedy should it find the decision illegal. The judicial review stage is governed by the principle of deference to the original decision of the agency, meaning that the court should not replace the administrative policies with its own policy preferences. The court should interfere only on the basis of some illegality such as ultra vires, illegal purposes, or unreasonableness. Correspondingly, the court is not supposed to second-guess the process of fact-finding by the agency unless the administrative decision was not based upon ‘reasonable’ evidence.26 As we discuss later, however, Israeli courts apply the reasonableness test more broadly than in the U.K., the U.S., and many other countries.27 2.3  Closed and Open Judicial Review in Israel 2.3.1  The record on judicial review During the first two decades after Establishment, Israeli administrative law followed in the footsteps of English law with respect to the administrative record. Under English law, courts could overturn administrative decisions only if the action was ultra vires (which was the main ground for judicial review) or if there was an error on the face of the record (i.e., in the text of the decision) (Evans 1980, 109–10). During the 1960s, however, the HCJ openly diverged from the English rule that confined the reviewing court to consideration of the terms of the decision rather than to the record of what occurred before the agency. In the leading case of Trudler v. Election Officer,28 the Court opened the gate for the reviewing court to consider new evidence offered by third parties who were not parties to the original proceedings.29 The exact scope of the Trudler doctrine, however, is far from clear. The case law remains eclectic and devoid of systematic development.

  Administrative Tribunals Law, § 30(a) (translated by authors).   See Administrative Affairs Courts Law, 5760–2000, SH No. 1739. 26   HCJ 442/71 Lanski v. Minister of Interior 26(2) PD 337 (1972); HCJ 987/94 Euronet v. Minister of Commc’ns, supra note 19; HCJ 10907/04 Soldoch v. Mayor of Rehovot ¶¶ 30–35 (2010) (unreported). In applying the reasonableness standard, the court does not differentiate between review of tribunal and non-tribunal decisions. 27   See infra text near note 47. 28   HCJ 76-77/63, 79/63, Trudler v. Elections Officer, 17 PD 2503 (1963). 29   The decision in Trudler was tied to the Court’s ruling that the petitioners had standing to attack the decision despite not having been parties to the original administrative proceedings. See id. at 2510–12. 24 25

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Judicial review of agency action in the U.S. and Israel  455 2.3.2  Open record Under Israeli administrative law, agencies are required to gather data, establish the facts, and base their conclusions upon ‘reasonable’ evidence.30 In the absence of formal proceedings at the initial decision level, in many cases the first stage at which a ‘record’ is created is at the stages of appeal to a tribunal or judicial review. Accordingly, to the extent that the HCJ in judicial review refers to constraints related to the ‘record,’ it is difficult to distinguish between references to the administrative record created at the initial decision level by the agency and to the record established by the judicial echelons below the HCJ (that is, the tribunal or the administrative court).31 In any event, the law regarding the possibility of introducing new evidence at the judicial review stage remains unclear. The general practice of both the HCJ and the administrative courts is to reject new evidence, since admitting such evidence would undermine the required deference to the factual conclusions of the authorized agency. For that reason, courts often reject attempts by the parties to present new evidence at the judicial review stage.32 However, the enforcement of this norm is inconsistent. In some cases, courts open the door to new evidence,33 particularly in cases of petitions that involve issues of fundamental human rights and in immigration cases.34 There seems to be no distinction in this respect between cases in which the administrative ‘record’ was established during the initial administrative decision and cases in which there was an appeal to an administrative tribunal prior to the judicial review stage. Some fundamental doctrines relating to judicial review support the general rule against the presentation of new evidence. First, judicial review is based on affidavits prepared by the parties. Oral testimony and cross-examination require special permission by the reviewing court, which is rarely given. Logically, this restriction to affidavits would not preclude the parties from using affidavits to introduce new evidence at the judicial review stage. However, the historical development of the affidavit rule before the administrative courts suggests that the default rule for Israeli judicial review is a closed record, although in practice exceptions are frequently allowed. Until 2000 the HCJ served as the exclusive court for judicial review of all administrative cases. The HCJ was overwhelmed with administrative cases and was too busy to hear oral testimony (Zamir 1993, 312–14). In 2000, the Knesset passed a law that moved most administrative petitions to the administrative courts (in which a single judge of the district court performs the task of judicial review).35 Although the new statute also limited evidence to affidavits, it enabled the administrative court judge to grant permission for oral testimony and cross-examination.36 Since, unlike the HCJ, the administrative courts were 30   See HCJ 987/94 Euronet v. Minister of Commc’ns, supra note 19. This rule applies to all kind of decisions, including those that are quasi-legislative. 31   Petitions disposed of by the administrative courts are subject to appeal before the HCJ. 32   See, e.g., AdminA 1217/08 Hermelin v. Manager of Prop. Tax (24.6.10) (unreported); AdminPet 09-2513 Magar v. City of Tel Aviv (2013) (unreported). 33   See e.g. HCJ 620/85 Miari v. Chairperson of the Knesset 41(1) PD 169, 278 (1987); OM 6436/07 Carmeli v. Israeli Land Auth. (14.10.12) (unreported); See also Zamir 1993, 320–21. 34   AdminA 12282/11 Brahana v. Ministry of Interior (30.11.11) (unreported); HCJ 9420/09 Ploni v. Minister of Justice ¶¶ 21–23 (10.3.10) (unreported). 35   Administrative Affairs Courts Law, 5760–2000, SH No. 1739. 36   See Administrative Affairs Courts Regulations (Procedure) § 15.

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456  Comparative administrative law not expected to suffer from the problem of an overwhelming caseload, some commentators argued that these courts should be more willing to accept oral evidence rather than affidavits. The HCJ, however, was quick to negate this assumption. In Sorchi v. Interior Office, the Court explicated that if the petitioners seek to bring new testimony or other evidence ‘the place to do this is before the respondent [agency], not before the administrative court.’37 The Sorchi decision demonstrates that while Israeli courts do not espouse a clear and consistent doctrine of closed record, they are not willing to adopt a general rule of open record either. Another rule that connects well to this (partly) closed record approach is the rule regarding deference to the agency’s factual conclusions, particularly with respect to the agency’s resolution of conflicting expert opinions. In civil litigation, the general rule is that each party presents expert testimony and opinion and the court decides which expert opinion to prefer. In judicial review of agency action, however, the court is not expected to delve into the disagreements among experts. Instead, it should respect any factual conclusion by the agency based on expert opinion, unless such expert opinion is fundamentally flawed or flatly unreasonable.38 This rule of deference towards an agency’s factual findings and its resolution of conflicting expert opinions corroborates the basic concept that the factual basis for the administrative decision is to be established at the agency level—not in the courtroom. 2.3.3  New arguments at the judicial review stage There is no clear-cut rule in Israeli law that limits the parties to the legal and policy arguments they raised before the administrative agency or before a tribunal. Nevertheless, the path for raising new arguments is not wide open. Rather, courts often denounce attempts by the parties to raise arguments not raised before the agency as a forbidden ‘change of front.’39 In such cases, the courts may dismiss the new arguments without considering them on the merits, or give a short and reluctant look into the merits before dismissing them.40 Here, again, the doctrine does not seem to differentiate between arguments not raised before the agency at the initial decision stage, those not raised before a lower court or tribunal, and those that both parties failed to raise in their original affidavits at the judicial review level. 2.3.4  New reasons at the judicial review stage Israeli statutory administrative law contains no provisions concerning evidence and arguments in administrative proceedings. However, the Administrative Procedure Amendment (Statement of Reasons) Law of 1958 requires agencies to provide reasons for their decisions.41 The obligation to provide reasons requires an agency to state the

  AdminA 10811/04 Sorchi v. Interior Office ¶¶ 10–11 (Barak, J.) (17.3.05) (unreported).   HCJ 13/80 ‘Nun’ Tin Industry v. Ministry of Health 34(2) PD 693 (1980); HCJ 3186/03 State of Israel v. Ein Dor 58(4) PD 754 (2004); HCJ 8109/01 Reshtnik v. Minister of Transp. (8.5.03) (unreported). 39   E.g., AdminA 29028-04-13 Hativ v. Ein Kenia Local Council (8.7.13) (unreported). See also CA 546/04 Jerusalem Municipality v. Kupat Holim Klalit (20.8.09) (unreported). 40   E.g., AdminA 33481-07-12 Zalk v. Zoning Bd. of Cent. Dist. (23.6.13) (unreported). 41   See supra note 19 and accompanying text. 37 38

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Judicial review of agency action in the U.S. and Israel  457 factual basis for the decision as well as the legal and policy grounds on which it is based.42 This comprehensive duty to state the reasons for the decision at the agency level would seem to preclude an agency from stating new reasons for its actions at the judicial review stage. However, the HCJ’s decisions on this point are less decisive and more flexible than their American counterparts.43 In the leading case, Hilron v. Fruit Council, the court ruled that agencies are allowed to raise post-hoc rationalizations for their actions even if they differ from those provided in their original statement of reasons (or if the agency failed to provide reasons at all), although the court would treat such post-hoc rationalizations with much caution.44 Sometimes, the judicial suspicion towards post-hoc rationalizations causes the court to ignore those reasons or remand the case back to the agency.45 In most cases, however, courts consider such reasons, despite expressing their discontent with post-hoc rationalizations, and usually do not quash the decision or even remand the case.46 2.4  Open Judicial Review and General Israeli Judicial Review Doctrines The flexible attitude of the Israeli courts towards allowing new evidence, new arguments, and new reasons at the judicial review stage is tied to central doctrines of judicial review as developed by Israeli courts—each of which is strikingly distinct from American law and practice. Those doctrines could not function well under a regime of closed review. Indeed, rather than being a routine matter of judicial procedure, the question of open or closed review goes to the heart of any judicial review system. One such central doctrine is standing. Unlike the U.S., the Israeli Supreme Court established during the 1980s an expansive concept of ‘public petitioner’ that allows almost anyone to attack almost any governmental action in court, including appointments decisions, prosecutorial decisions and cabinet policies.47 This means that under Israeli law the door is wide open for third parties who did not take part in the original proceeding at the agency level to challenge in court the decisions yielded by such proceedings. This expansive concept of standing is inconsistent with a strict concept of closed review, because it opens the judicial forum to a range of interests and arguments that may not have been presented to or considered by the agency at the time it made its decision. Similarly, the Israeli Supreme Court espouses a wide concept of reasonableness that allows the reviewing court to conduct broad, independent assessments of the merits of 42   CA 30/56 Ben Harosh v. Benefits Officer 7 PD 931, 933 (1956); CA 142/70 Shapira v. Dist. Branch of the Israeli Bar Assoc. 25(1) PD 325, 335 (1971) (Kister, J.); HCJ 518/78 Avrami v. Minister of Transp. 32(3) PD 675, 678 (1978). 43   See the discussion of the Chenery principle, supra text accompanying note 6. 44   HCJ 75/76 Hillron Ltd. v. Fruit Comm. 30(3) PD 645 (1976). 45   See, e.g., HCJ 7177/95 Eurogam v. Investments Council 50(2) PD 1, 8 (1996). 46   See e.g., CA 700/89 Israeli Elec. Co. v. Malibu Ltd. 47(1) PD 667, 678 (1993). 47   HCJ 910/86 Ressler v. Minister of Def. 42(2) PD 441, 477 (1988), available in English at http://elyon1.court.gov.il/files_eng/86/100/009/Z01/86009100.z01.pdf (see ¶  36 of the translation, accessed March 28,2017). HCJ 4267/93 Amitai—Citizens for Judicial Watch v. Prime-minister of Israel 47(5) PD 441 (1993).

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458  Comparative administrative law administrative decisions to ensure that they are not ‘wholly unreasonable.’48 This reasonableness assessment is often based on the court’s evaluation of the end result of the action. This independent assessment of the merits, which promotes the judicial activism frequently practiced by the Supreme Court, would seem inconsistent with a formalistic closed record approach. Yet another example is the doctrine of selective enforcement. Under Israeli administrative law, a person can challenge a decision to enforce the law against herself (or to refrain from granting her a state benefit) without needing to demonstrate the existence of a legal duty owed to her. Instead, it is sufficient to demonstrate that an exemption from the law or a benefit was given to others, even if contrary to official policy.49 Once again, the doctrine, which focuses on what the agency did in other cases seems incompatible with the concept of closed review.

3. EXPLANATIONS FOR THE DIFFERENCES BETWEEN ISRAELI AND U.S. PRACTICE The most likely explanation for the divergence between the U.S. and Israel with respect to closed and open judicial review lies in some fundamental differences between the two systems of administrative law (in addition to the striking differences between the two systems discussed in section 2.4 above). The U.S. system relies primarily on the initial proceeding to get things right (Asimow 2015, 19). As discussed above in section 1, agency rulemaking is subject to numerous procedural limitations imposed both by statute and case law, while initial adjudicatory decisions normally consist of a trial-type adversarial proceeding. Later phases in the process (administrative reconsideration and judicial review) are less significant than the initial decision, and seldom overturn the initial decision in either adjudication or rulemaking on the basis of factual or discretionary errors. The closed review rules in the U.S. flow logically from the decision to invest most resources in the initial decision. An adjudicatory proceeding generates a written record of all of the testimony and other evidence offered at the hearing. The parties control the proceedings and can introduce all relevant evidence and make all relevant arguments. The decision-maker considers only that evidence and those arguments. The initial decision creates a crystallized set of fact-findings and reasons that a reviewing court should respect  by precluding the introduction of new evidence, arguments, or reasons at the review stage. Similarly, in the U.S., the rulemaking process is highly structured. The agency must give public notice of a proposed rule and furnish an opportunity for public comment. It must disclose its methodology and critical data, and it must respond to public comments by explaining why it did not follow the suggestions or alternative solutions contained in those

48   See e.g. HCJ 8379/06 Eduardo v. Minister of Def. (2007) (unreported), available in English at http://versa.cardozo.yu.edu/opinions/wasser-v-minister-defense (accessed March 28, 2017). 49   HCJ 637/89 Huka Le’Medinat Israel v. Treasury Minister 46(1) PD 191 (1991); HCJ 6396/96 Zakin v. Mayor of Beer Shiba 53(3) PD 289 (1999).

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Judicial review of agency action in the U.S. and Israel  459 comments. This process is very costly. As in the case of adjudication, the U.S. system of rulemaking places primary responsibility for finding legislative facts and stating reasons at the level of the rulemaking agency. Reviewing courts should respect that process through a system of closed record, closed reasons, and closed argument.50 Israel follows a quite different model of adjudicatory decision-making. It places primary reliance on the judicial review phase of administrative adjudication, rather than the initial decision or agency reconsideration phases. The broad rules relating to standing, reasonableness, and selective enforcement discussed in the previous section evidence Israel’s commitment to judicial review and its willingness to rely on courts to produce a just and accurate decision. Similarly, Israel’s striking and unusual rule designating the Supreme Court in its role as the HCJ as the first and only court of jurisdiction at the judicial review stage in more significant cases reflects its commitment to judicial review as the most important level of administrative decision-making. At the initial decision phase, Israel follows the rules of natural justice, but the proceeding is inquisitorial rather than adversarial. The initial decision is considered to be a part of the agency’s investigation and the private party has the opportunity to correct what it considers mistaken findings or an abuse of discretion by the investigators.51 Under natural justice principles, the private party has a chance to make its arguments orally or in writing before an unbiased decision-maker. However, that decision-maker is often involved as an investigator in the case and can rely on his or her prior knowledge in finding the facts and exercising discretion.52 There is usually no opportunity to cross-examine adverse witnesses.53 This inquisitorial proceeding is sharply different from the U.S. commitment to trial-type adversarial proceedings at the initial decision level with an exclusive record and an uninvolved decision-maker. As a result, in Israeli practice, the record is not crystallized at the initial decision level. There may be no written record of the testimony offered at the initial decision level, and the decision-maker may rely on non-record evidence. In the light of these procedures, it is not surprising that the courts often permit parties to the initial decision (as well as nonparties who become involved at the judicial review stage) to supplement the record by introducing affidavits from additional witnesses or experts, allow either party to advance new arguments, and permit the agency to state new reasons to support its decision. It might seem that in cases involving an appeal from an agency to a tribunal, the record for judicial review would have crystallized at the tribunal phase in a way that would constrict the openness of the review at the judicial review level.54 In reality, however, the current status of tribunals in the Israeli system is not firm enough to substantiate the development of an exception to the judicial acceptance of open review principles. Similarly, Israel provides no structured process for making quasi-legislative policy

50   The case for closed review of informal adjudication and policy-implementation decisions is much less persuasive. See supra text accompanying notes 8 and 12. 51   See, e.g., HCJ 76-77/63, 79/63 Trudler v. Election Officer 17 PD 2503 (1963); HCJ 1661/05 Aza Regional Council v. Knesset 59(2) PD 481, 606–07 (2005). See also Barak-Erez 2010: 87-92. 52   See supra text accompanying note 20. 53   See, e.g., HCJ 78/71 Mizrachi v. Health Minister 25(2) PD 238, 244 (1971); HCJ 646/93 Bracha v. Minister of Commc’ns 48(3) PD 661 (1994). 54   See supra text accompanying note 23.

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460  Comparative administrative law ­decisions such as rules.55 The agency no doubt consults with interested parties in the process of formulating the rules or other policies, but it is not required by law to inform the general public, solicit comments, conduct hearings, disclose its methodology, or respond to public comments if there are any. Judicial review offers the first structured opportunity for adversely affected parties to challenge the legality and reasonableness of quasi-legislative policy judgments. Consequently, it is unsurprising that courts are willing to entertain new evidence and arguments as well as new agency reasons at the judicial review stage.

CONCLUSION In this chapter, we compared closed and open judicial review of agency action. The U.S. falls near the closed end of the spectrum while Israel falls closer to the open end. The question of the administrative record might seem like a procedural or technical issue. Our analysis demonstrates, however, that the concept of open or closed review is a central component of any system of judicial review. The decision about whether to employ closed or open review is crucial to the division of responsibilities between the administrative agencies and the courts. In the U.S. the closed record doctrine means that the evidentiary record is set during the initial decision process in both adjudication and rulemaking as well as in policyimplementation decisions. In addition, the doctrines of closed reasons and arguments force private parties to make all their arguments, and agencies to state all their reasons, at that initial stage. In Israel, on the other hand, administrative procedures for making quasi-judicial and quasi-legislative determinations at the agency level are much less structured than in the U.S. and the tribunal system of administrative appeals is undeveloped. The most crucial stage of decision-making in Israel is the judicial review process, and the concept of open review reflects this. Our analysis also demonstrates that the question of open or closed review is intertwined with various other doctrines of review on both the procedural level (such as standing) and the substantive level (including the standards of review such as reasonableness and selective enforcement). Accordingly, one cannot consider revisions to the policy regarding the administrative record, nor those relating to new arguments or reasons, without also considering the implications of such a move on many other doctrines of judicial review.

REFERENCES Asimow, M. (2015), ‘Five Models of Administrative Adjudication,’ American Journal of Comparative Law 63, 3–31. Asimow, M. and Y. Dotan (2016a), ‘Open and Closed Review of Agency Action: The Conflicting U.S. and Israeli Approaches,’ American Journal of Comparative Law 64, 521. Asimow, M. and Y. Dotan (2016b), ‘Hired Guns and Ministers of Justice: The Role of Government Attorneys in the U.S. and Israel,’ Israel Law Review 49, 319.

55

  See supra text accompanying notes 17–18.

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Judicial review of agency action in the U.S. and Israel  461 Barak-Erez, Daphne (2010), Administrative Law, Tel Aviv: The Israeli Bar Publishing House. Evans, John M. (1980), De Smith’s Judicial Review of Administrative Action, 4th ed., London: Stevens & Sons. Nathanson, N.L. (1975), ‘Probing the Mind of the Administrator: Hearing Variations and Standards of Judicial Review Under the Administrative Procedure Act and Other Federal Statutes’, Columbia Law Review 75, 721–70. Pierce, R.J. (1995), ‘Seven Ways to Deossify Agency Rulemaking,’ Administrative Law Review 47(1), 59–95. Zamir, I. (1993), ‘Evidence in the High Court of Justice’, 1 Mishpat Umimshal [Law & Government] 1, 295. Zamir, Itzhak and Allan Zysblat (1996), Public Law in Israel, Oxford: Clarendon Press.

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28.  The ‘double helix’ of process and substance review before the UK Competition Appeal Tribunal: a model case or a cautionary tale for specialist courts? Athanasios Psygkas

A key question in comparative administrative law is the tension between accountability and expertise (See Rose-Ackerman, Chapter 15, this volume). The puzzle of designing institutional mechanisms that mediate between these two values permeates administrative law both in setting up independent regulators and, at the next step, in designing regulatory review processes (namely, review of the regulators’ decisions by another institution, commonly a court). The nature of review will shape the relationship between the judiciary and the executive. What is more, the bulk of public decision-making is made by the administrative state broadly defined. Within this set of decisions, policymaking by arm’s-length regulatory institutions is fundamentally important as it affects a broad swath of economic and social activity (Breyer 2011, 2189). Therefore, an institutional puzzle, which scholars on both sides of the Atlantic have debated, is whether regulatory agency decisions should be reviewed by specialist bodies or generalist courts. The former model (‘experts reviewing experts’) often assumes an intensive substantive review while the latter paradigm (conventional judicial review) generally focuses on procedural aspects of agency decision-making. The story, however, is more complicated than this paradigmatic scheme might suggest. This chapter studies the UK Competition Appeal Tribunal (CAT), a specialist regulatory court that assesses the substantive correctness of a range of regulatory decisions by applying rigorous standards. It provides an instructive case for exploring both the institutional design puzzle (review by a generalist court or a specialist court) and the type of review (process or substance) that these review bodies undertake. I argue that, because of its institutional design and operation in practice, the CAT has the advantages of a specialist court while mitigating the associated risks of specialization. I also explain that one of the key benefits of the CAT model is that the Tribunal has integrated procedural review into full merits review— I call this the ‘double helix’ model of review—in a way that promotes both democratic accountability and expertise. This ‘high-powered tribunal’ (Rawlings 2010, 302) could therefore serve as a model for other countries facing similar questions of effective review of expert regulatory decisions. To appreciate the distinctive nature of review on appeal before the CAT, Part 1 outlines the development of judicial review in English administrative law and draws the contrast between review on appeal and judicial review. Against this backdrop, Part 2 describes the powers and composition of the CAT and evaluates the merits and potential disadvantages of this Tribunal in light of the general literature on specialist courts and an original dataset of CAT judgments. Part 3 focuses on a distinct advantage of the CAT—the blending of 462 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 462

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The ‘double helix’ of process and substance review before the UK CAT  463 procedural and merits review. Part 4 concludes with lessons drawn from the UK experience and a discussion of institutional alternatives.

1. FROM FORMALIST TO SUBSTANTIVE JUDICIAL REVIEW: THE EVOLUTION OF THE ROLE OF THE COURTS IN THE UK A key background distinction is between judicial review and appeal. Judicial review inheres in the common law powers of the English courts; in principle, it focuses on formal matters and the validity of administrative decisions. By contrast, review on appeal is provided by certain statutes, but only for specific administrative acts; it focuses on the merits of these decisions and is therefore also described as ‘merits review’ (Craig 2012, 6–7; Cane 2010, 433–4; Ottow 2015, 218). The ‘classic model of administrative law’ in the UK reflected a formalist agenda for judicial review and an emphasis on judges avoiding the examination of policy issues (Harlow and Rawlings 2009, 99; Taggart 2003, 312–13). The fundamental mission of the courts was to carry out the legislative will by ‘policing the boundaries’ set in the enabling statute: the doctrine of narrow ultra vires allowed the courts keep the exercise of administrative powers within these statutory limits (Craig 2012, 5–7; Scott 2000, 43). By contrast, review of the substance of administrative action was uncommon and had to meet a high threshold. This idea was captured in one of the most famous administrative law cases, Wednesbury, in which the court set a demanding ‘unreasonableness’ standard for judicial intervention. In the words of Lord Greene: if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. [B]ut to prove a case of that kind would require something overwhelming. . . It is not what the court considers unreasonable, a different thing altogether. . . The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another.1

The grounds of conventional judicial review, as set out by Lord Diplock in GCHQ, a later and oft-cited case, also reflect the prioritization of form over substance, the latter only coming in under the exacting ‘Wednesbury unreasonableness’ standard. The three heads of judicial review are: illegality; irrationality (i.e., ‘Wednesbury unreasonableness’); and procedural impropriety.2 Of course, one might contest the claimed emphasis on form. For instance, the treatment of legality as a formal rather than a substantive question might be orthodox in the UK, Australia and New Zealand but not in Canada (Wilberg and Elliott 2015, 6). The point that I make, however, is that the original position and the doctrine until the latter part of the twentieth century demonstrated a clear intent of the courts to, at least, appear to focus judicial review on the form rather than the substance of administrative decisions (Feintuck 2004, 68). This becomes clearer if one compares conventional judicial review cases with cases with   Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 K.B. 223.   Council for Civil Service Unions v Minister for the Civil Service [1985] A.C. 374.

1 2

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464  Comparative administrative law an EU law or European Convention of Human Rights (ECHR) dimension. After the enactment of the Human Rights Act 1998 (HRA), which incorporated ECHR rights into domestic law, the English courts acknowledged the ECtHR jurisprudence, which had held that the orthodox domestic approach set the threshold of review too high, and began to apply the proportionality test to assess the compatibility of administrative action with the ECHR.3 The approach was (and is), in principle, results-oriented rather than processoriented (Geiringer 2015, 331–8). That is to say, the English courts will look at whether the substantive decision reached by the public authority complies with the ECHR rather than impose procedural requirements on public authorities to carry out the proportionality analysis. Lord Hoffmann emphasized that proportionate restrictions should not be struck down because ‘the decision-maker did not approach the question in the structured way in which a judge might have done’ and that the primary decision-makers ‘cannot be expected to make such decisions with textbooks on human rights law at their elbows’.4 The introduction of proportionality in cases with an ECHR or EU law dimension highlights the increasing importance of the substantive content of administrative decisions and the role of the courts in ascertaining whether these decisions are a proportionate restriction of fundamental rights. The intensity of review is particularly high at the last two stages—necessity and fair balance (Mathews, Chapter 24, this volume)—which brings courts closer to merits review. Judicial pronouncements have accepted that the proportionality test may go further than the traditional grounds of review 5 but expressly repudiated the idea that such review is akin to merits review.6 A recent series of cases includes dicta that point to the increasing role of substantive review in administrative law through the potential application of proportionality in cases without a HRA/ECHR or EU law dimension.7 However, in these cases as well, different justices have stressed that the potential expansion of the proportionality test to ‘purely domestic’ cases does not turn judicial review into merits review of the substantive correctness of the administrative decision.8 This express attempt to dissociate the more intensive proportionality framework from merits review may be another example of how the structured proportionality test helps to ‘disguise just how close [judges] have moved to review on the merits’ (Harlow and Rawlings 2009, 126). The broader point is that it is not easy neatly to disentangle merits review and formal judicial review. As Paul Craig has suggested, all the different tests of substantive review entail some consideration of the merits, and they can be placed along a spectrum with classic Wednesbury review at one end and judicial substitution of judgment on a correctness standard at the other (Craig 2012, 643). Indeed, later in this chapter, I note that substance and process are intertwined in certain conventional judicial 3   R (Daly) v Secretary of State for the Home Department [2001] 2 A.C. 532, 545–6 (Lord Bingham, citing Smith and Grady v United Kingdom (1999) 29 E.H.R.R. 493) and 548 (Lord Steyn). 4   R (on the application of SB) v Governors of Denbigh High School [2007] 1 A.C. 100 [13]. See also Belfast City Council v Miss Behavin’ [2007] UKHL 19 [13]. 5   See, e.g., Daly [32] (Lord Cooke), [27] (Lord Steyn). 6   Daly [28] (Lord Steyn). 7   Kennedy v Charity Commission [2014] UKSC 20 [51]–[56] (Lord Mance); Pham v Secretary of State for the Home Department [2015] UKSC 19; Keyu v Secretary of State for Foreign and Commonwealth Affairs [2015] UKSC 69; Youssef v Secretary of State for Foreign and Commonwealth Affairs [2016] UKSC 3. 8   Keyu [133] (Lord Neuberger) and [272] (Lord Kerr).

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The ‘double helix’ of process and substance review before the UK CAT  465 review cases cited in this part. However, it is helpful to identify the novelty of the standard of review on appeal before the CAT by contrasting it with conventional judicial review (part 2). Review on appeal is expressly about merits review; judicial review originally emphasized formal matters. Despite the rise of substantive review under proportionality, the distinction from merits review has been reiterated on multiple occasions. The default position of conventional regulatory review is captured well in the image of a division of labour that produces ‘a long-lived harmonious relationship between the judges and the regulatory agencies: the judges would focus on the process of regulatory decision making, whereas the agencies would focus on the substance thereof’ (Mantzari 2015, 15). The introduction of review on appeal complicates this picture.

2.  THE CAT AS A SPECIALIST REGULATORY COURT 2.1  The Jurisdiction of the CAT and the Nature of its Expertise The Competition Appeal Tribunal was created by the Enterprise Act 2002 (section 12 and schedule 2). It is a specialist judicial body with cross-disciplinary expertise in law, economics, business and accountancy. Its function is to decide cases involving competition or economic regulatory issues. In particular, certain key areas of its jurisdiction, which can include either appeals or judicial review cases, cover: ●

appeals on the merits in respect of decisions made under the Competition Act 1998 by the Competition and Markets Authority and sectoral regulators; ● appeals against a range of decisions made by the Office of Communications (‘OFCOM’) and the Secretary of State under the Communications Act 2003; ● applications for review of merger and market investigation decisions under the Enterprise Act 2002; ● claims for damages brought under the Competition Act (‘private actions’).9 The CAT consists of two panels: a panel of Chairmen and a panel of Ordinary Members. The majority on the panel of Chairmen are judges of the Chancery Division of the High Court. Some Chairmen and all the other Members come from academia, private practice, the civil service, business and industry.10 The Ordinary Members need not, and half of them do not, have formal legal training. Typically, a three-member Tribunal (a Chairman and two Ordinary Members) will be constituted by the President of the CAT to hear a particular case. The cross-disciplinary nature of the CAT has been described as the Tribunal’s great strength as a ‘specialist regulatory court’ (Harlow and Rawlings 2009, 321), and reflects the scope of its powers to review the merits of administrative decisions. The Tribunal’s composition may also account for the intensity of its review on

 9   More information is available at http://www.catribunal.org.uk/242/About-the-Tribunal. html#Appeal-under-CA98 (accessed July 15, 2016). 10   The bios of the members of the CAT are listed on the Tribunal’s website (http://www.catri​ bunal.org.uk/246/Personnel.html) (accessed July 15 2016).

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466  Comparative administrative law appeal. In the words of a practitioner, ‘review of experts by generalists – wide margin of ­appreciation; review of experts by other experts (potentially even “more expert experts”) – narrow margin’ (Thomas de la Mare, quoted in Harlow and Rawlings 2009, 321). Before examining this standard of review, it is helpful to consider the statutory language using the regulation of electronic communications by OFCOM as an example (although similar language is used in other domains over which the CAT has appellate oversight). Under the Communications Act 2003, section 192(6): The grounds of appeal must be set out in sufficient detail to indicate— (a) to what extent (if any) the appellant contends that the decision appealed against was based on an error of fact or was wrong in law or both; and (b) to what extent (if any) the appellant is appealing against the exercise of a discretion by OFCOM, by the Secretary of State or by another person. The CAT must decide the appeal on the merits and by reference to the grounds of appeal set out in the notice of appeal.11 Its decisions may be appealed only on a point of law, with the permission of the CAT or the appellate court, to the Court of Appeal or to the Court of Session (s. 196). Several CAT cases demonstrate the intensive standard of review building on this statutory framework. For instance, in a 2008 decision the CAT stated: this is an appeal on the merits and the Tribunal is not concerned solely with whether the 2007 Statement is adequately reasoned but also with whether those reasons are correct. The Tribunal accepts . . . that it is a specialist court designed to be able to scrutinise the detail of regulatory decisions in a profound and rigorous manner. The question for the Tribunal is not whether the decision to impose a price control was within the range of reasonable responses but whether the decision was the right one.12

The expertise of the CAT is derived from two types of specialization: subject-matter and professional background specialization. Subject-matter (or opinion or functional) specialization comes from the fact that specialist courts only hear specific categories of cases and, therefore, through continuous exposure to similar types of disputes, can develop experience and expertise in this specific area (Ginsburg and Wright 2013, 790; Baum 2009, 1671; Mantzari 2015, 25). As outlined earlier in this section, the CAT only hears a specific set of regulatory and competition disputes. Professional background specialization refers to the specific experience that the members of the Tribunal bring to its operation because of their professional or educational background (Ginsburg and Wright 2013, 790; Miller and Curry 2013, 60). None of the Ordinary Members are judges, nor are five of the Chairmen, but instead are professionals with specialized training or educational background in relevant areas (mostly economics and competition law) and/ or work experience in the industry or regulatory institutions.

  Communications Act of 2003, s. 195(2).   Hutchison 3G UK Ltd v Office of Communications [2008] CAT 11, para. 164 (emphasis added). 11 12

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The ‘double helix’ of process and substance review before the UK CAT  467 2.2  The Merits and Risks of the CAT as a Specialist Court To assess the merits and disadvantages of the CAT I draw on the general literature on specialized courts but apply it to the CAT, taking into account its special institutional features. The first advantage is expertise. Competition and regulatory law is a highly technical, specialized area of law that intersects extensively with other disciplines, primarily economics. As a specialist court, the CAT is not in a position of epistemic imbalance vis-à-vis the regulatory agencies and does not suffer as much from the deficits typically characterizing generalist courts, such as lack of specialized technical knowledge and information asymmetries.13 The second advantage is efficiency defined as ‘increasing the court’s outputs for any given level of inputs, holding constant the quality of the outputs’. While this argument has intuitive appeal, it is difficult to quanitfy efficiency in these terms (Ginsburg and Wright 2013, 793). The only relevant data we have is the comparison of the length of CAT judicial review cases and High Court cases, but this comparison cannot yield reliable results in light of the different types of cases heard.14 However, the flipside of specialization may be tunnel vision. Immersion in a narrow field may lead to insularity and the loss of a broader perspective that generalist judges may bring to bear in their judgments (Baum 2009, 1677–8; Ginsburg and Wright 2013, 802–4). Tunnel vision is similarly hard to measure accurately. Even in the absence of effect­ive operationalization, however, the risk of insularity would be much less of a concern in the case of the CAT since it is a hybrid body that brings together High Court judges and non-judicial experts. Indeed, the evidence from the CAT jurisprudence is that the Tribunal cites relevant Court of Appeal cases. Even if there were a risk of insularity, the generalists on the Tribunal would be expected to step in to help, in the words of Judge Wood, the specialists ‘to emerge from their cocoons’ (Wood 1997, 1767). The second, and related, risk is that the specialist court might ‘go native’ and usurp the function of the agencies by ‘second guessing’ their positions on policy issues (Freeman 2013, 7). The result of such assertiveness might be an increased willingness to overturn administrative decisions (Baum 2009, 1677). However, the counter-argument has also been made: specialist tribunals, which commonly hear cases in which the government is a party, may be more favourable to the government’s interests (Ginsburg and Wright 2013, 801–2; Baum 2011, 39). This is an empirical question, and the evidence is limited and mixed. Revesz (1990, 1151–3) has argued that specialized courts are likely to be biased in favour of the agency. By contrast, using a dataset of decisions in which the Board of Patent Appeals and Interferences is reviewed by the Court of Appeals for the Federal Circuit, Miller and Curry (2013) have found that the likelihood of a judge voting to reverse an agency decision increases considerably when the judge is a subject-matter expert. Maule (1999) has suggested that the allegations of pro-government bias on the part of Tax Court judges lacks statistically significant empirical evidence. 13   On the comparative institutional disadvantages of courts, see Mantzari 2015, 18–21 (drawing on the work of Scott Brewer on ‘epistemic deference’); Ginsburg and Wright 2013, 797–800. On the CAT in particular, see Freeman 2013, 6–7. 14   Department for Business, Innovation and Skills, Streamlining Regulatory and Competition Appeals Consultation on Options for Reform (June 2013), 85 (providing data showing that, on average, CAT JR cases took about four months whereas High Court JR cases took ten months. However, the government recognizes that this is ‘far from a perfect comparison’).

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468  Comparative administrative law Using an original dataset of all the judgments that have been decided on the merits and involved OFCOM as one of the parties,15 I found that the risk of excessive reversal of agency decisions does not seem to have materialized in CAT review of OFCOM decisions. Despite the highly intensive standard of review, the CAT dismissed the appeal (i.e., upheld OFCOM’s original decision) in 57 per cent of the cases; allowed the appeal (i.e., overturned the agency’s decision) in 24 per cent of the cases; and allowed the appeal in part in 19 per cent of the cases. To put these figures into context, a recent study of the application of Chevron16 by the US Supreme Court and irrationality review by the UK House of Lords/Supreme Court found that the former affirmed agency decisions at a rate of 64.3 per cent, whereas the latter at a rate of 88.5 per cent (Ip 2014, 498). Therefore, on balance, the behaviour of the CAT does not, prima facie, suggest reasons for concern in either direction. Moreover, appeals against CAT judgments before the Court of Appeal do not indicate that the CAT is ‘going native’: two CAT judgments overturning OFCOM decisions were challenged before the Court of Appeal. In both cases, the Court of Appeal reversed the CAT judgments. However, the Supreme Court ultimately overruled one of these Court of Appeal decisions, thus restoring the CAT’s original judgment. In other words, the ordinary courts reversed only 20 per cent of the CAT judgments that had overruled OFCOM’s decisions. Overall, the findings based on our dataset of CAT judgments show that the language used to describe the intensity of review as more or less deferential will not necessarily translate into a lower or higher rate of reversal respectively. In an interesting analogy in the US context, Miles and Sunstein (2006, 832, table 1) have noted the irony that the Court’s most vocal critic of a strong reading of Chevron, Justice Breyer, was the most deferential Justice in practice (voting to uphold agency interpretations 82 per cent of the time); by contrast, Justice Scalia, the Court’s most vocal Chevron enthusiast, was the least deferential (voting to uphold agency interpretations 52 per cent of the time). To sum up, because of its institutional design as a hybrid regulatory body and its oper­ ation in practice, the CAT provides the advantages of a specialist court while mitigating the associated risks. The following part examines an additional and distinctive benefit of the CAT model, namely the integration of procedural review into full merits review.

3. THE ‘DOUBLE-HELIX MODEL’ OF REVIEW: INTERWEAVING PROCESS AND SUBSTANCE REVIEW BEFORE THE CAT 3.1  The Cases In principle, procedural questions fall within the purview of conventional judicial review and thus outside the scope of CAT review on appeal. In fact, however, in several CAT cases, procedural and merits review were intertwined.

15   In compiling this dataset, I excluded all the case management rulings since the crux of the issue is whether the agency decision itself has been affirmed or not. 16   Chevron v Natural Resources Defense Council, 467 U.S. 837 (1984) (holding that courts should defer to an agency’s interpretation of an ambiguous statute that the agency administers).

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The ‘double helix’ of process and substance review before the UK CAT  469 3.1.1  Case 1: TalkTalk17 The Tribunal considered the interplay between procedural and substantive points in this 2012 case. The main issues were TalkTalk’s contentions that OFCOM had erred procedurally in failing to take proper steps to satisfy itself that there had been a material change within the meaning of section 86(1)(b) of the Communications Act 200318 (Ground A); and that OFCOM’s finding of no material change within the meaning of section 86(1) (b) was, in substance, wrong (Ground B). The Tribunal first noted that in the context of an appeal, its role is to ‘assess the correctness of OFCOM’s decision, and not to apply a judicial review standard (by, for example, seeking to determine whether OFCOM has taken into account immaterial factors or failed properly to consult)’.19 Nevertheless, it went on to explain that consideration of OFCOM’s decision-making process is not necessarily irrelevant, and parties are not precluded from raising such matters in an appeal. The Tribunal accepted TalkTalk’s argument that OFCOM must be able to justify its decision as being ‘adequately and soundly reasoned and supported in fact’ and added: Without adequate consultation, it may be unclear whether there has been a material change or not. To take a hypothetical example, suppose a case where OFCOM simply fails to consider or consult upon the question of material change at all. In such a case, it may be that it is ­impossible – without the benefit of a proper consultation – for either OFCOM or, on appeal, the Tribunal to determine whether there has, or has not, been a material change. In such a case, on an appeal, it may be that the proper course would be for the Tribunal to remit the matter to OFCOM with a direction that a proper consultation be carried out.20

In other words, the absence of consultation would be reviewable, but the specifics of the process are not. In the Tribunal’s words, what constitutes a proper consultation is coloured by the facts of the given case. We consider that it would be wrong, in cases where OFCOM is considering whether there has been a material change for the purposes of section 86 of the 2003 Act, to lay down strict rules as to how OFCOM should go about this process.21

The interesting twist, however, is that this seemingly deferential approach stems not from restraint but the opposite, that is, the intrusive nature of merits review. The CAT stated that in cases where it has concluded that the regulator’s decision was correct on the merits, it does not consider its function to also review OFCOM’s decision by reference to the conventional judicial review—or, differently put, procedural—standards. The Tribunal explained that a full merits appeal ‘is capable of making good any deficiency in   TalkTalk Telecom Group plc v Office of Communications [2012] CAT 1.   Section 86(1)(b) reads:

17 18

OFCOM must not set an SMP services condition by a notification which does not also make the market power determination by reference to which the condition is set unless. . .(b) the condition is set by reference to a market power determination made in relation to a market in which OFCOM are satisfied there has been no material change since the determination was made.   Ibid., para. 75 (emphasis in the original).   Ibid., para. 76 (emphasis in the original). 21   Ibid., para 121. 19 20

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470  Comparative administrative law the procedure of the administrative body taking the original decision. In other words, a procedural failure at the level of the first instance administrative body can be remedied by a wide, on the merits, appeal’.22 Conversely, ‘even if OFCOM’s consultation process has been unimpeachably conducted, the Tribunal may nevertheless conclude that OFCOM’s decision was wrong’.23 The Tribunal’s approach, however, is not as simple as: ‘deference on the process, heightened scrutiny on the merits’. As the CAT explained: It may be that there are cases where OFCOM’s approach in reaching its decision was so defect­ ive as to preclude the Tribunal from reaching an ‘on the merits’ conclusion. In paragraph 76 above, we considered the case where OFCOM reached a decision regarding ‘material change’ without any consultation at all. It may be that, in such a case, the procedural deficiency on the part of OFCOM is so serious as to render it unsafe for the Tribunal to conclude that, “on the merits”, OFCOM reached the correct decision. In such a case, where (because of the deficiencies in OFCOM’s decision-making process) it is impossible to say one way or the other whether OFCOM’s decision was right or wrong, it may be that the only appropriate course is to remit the matter back to OFCOM for OFCOM to carry out its decision-making process again.24

The absence of any consultation whatsoever would be a clear case of procedural deficiency precluding review on the merits. The Tribunal’s formulation, however, could also accommodate less clear-cut cases. On the merits, the Tribunal in this case held that OFCOM had reached the correct substantive decision, and it therefore rejected TalkTalk’s Ground B. The CAT further explained that ‘this case does not disclose the sort of procedural deficiencies which cause us in any way to doubt the soundness of the conclusion we have reached on Ground B’.25 As to TalkTalk’s Ground A, the Tribunal’s short answer was that where, as in this case, ‘there is a full rehearing by the Tribunal of an issue initially determined by OFCOM and the appellant’s case has received “overall, full and fair consideration” . . . that will, in general, dispose of a challenge based upon deficiencies or alleged deficiencies in OFCOM’s procedure’.26 Nevertheless, the Tribunal went on to consider Ground A in a series of obiter dicta. More specifically, it noted that OFCOM had given third parties ‘every opportunity’ to participate in its decision-making process. The CAT rejected TalkTalk’s suggestion that consideration of whether there had been a material change for the purposes of section 86(1)(b) of the 2003 Act required, in all cases, detailed and extensive consultation. The CAT held, instead, that the extent of the consultation required turns on the facts of any given case, and it is, in the first instance, for OFCOM, as the decision-maker, ‘to decide upon the manner and intensity of the enquiry to be undertaken’. In the case before it, ‘had it been necessary to do so, [the Tribunal] would have rejected TalkTalk’s Ground A on the basis that OFCOM did properly satisfy itself that there had been no “material change”’ subject to one qualification.27 Namely, the CAT recognized that the summary description of Market 1 contained in OFCOM’s Wholesale Broadband Access [WBA]

    24   25   26   27   22 23

Ibid., paras 125–126 (emphasis added). Ibid., para 78. Ibid., para. 131. Ibid., para. 132. Ibid., para. 130. Ibid., para. 136f.

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The ‘double helix’ of process and substance review before the UK CAT  471 Market Power Determination was ‘obviously wrong’ and amounted to an inaccurate statement of how OFCOM had defined its markets. For the Tribunal, this was ‘an important point’: For a consultation exercise to be meaningful, the consultation must be adequate. It must, amongst other things, contain sufficient information so as to enable potential consultees to make a proper and informed response. . . Here, persons interested in the WBA Market might well not have understood exactly how OFCOM had defined Market 1 in the WBA Market Power Determination, and this might well have coloured submissions made in response to the [public] consultation. To this extent only, would we have been minded to accept TalkTalk’s contentions as regards the adequacy of OFCOM’s consultation process. However, for the reasons we have given, we consider that this deficiency of process was cured by the full rehearing that has now taken place.28

In other words, the Tribunal did assess the adequacy of OFCOM’s policymaking processes, albeit in obiter dicta, and found one procedural deficiency which, however, would have been cured by the full rehearing before it. Importantly, this finding of a procedural flaw stemmed from the CAT’s assessment of the merits of OFCOM’s Market Power Determination. This interplay was even more telling in a 2008 case. 3.1.2  Case 2: Vodafone29 Vodafone brought an appeal against a decision by OFCOM to modify the system of telephone number portability (‘the decision’). Vodafone alleged that OFCOM had breached several of its obligations, including notably for present purposes: (i) the obligation to correctly evaluate the likely benefits and detriments arising from the implementation of its proposed decision; and (ii) the obligation to consult with all interested parties and, for such consultation to be undertaken effectively, to act transparently, by publishing full details of the evidence and reasoning for its proposed decision. In the appellant’s view, these breaches amounted to serious procedural and/or substantive errors, as a result of which there was a serious risk that the conclusions which OFCOM had drawn from its cost-benefit analyses were wrong. The central issue in the appeal was whether OFCOM had performed a sufficiently rigorous analysis of the costs and benefits of the decision to enable the agency to reach a lawful decision. Narrowing in on the procedural irregularities of the public consultation, Vodafone submitted that the point of consultation: is that people affected by a potential decision should have an opportunity to be heard as to what they think of the merits of the proposal and how they will be affected. . . This requires consultation at an appropriate level of specificity and detail. It is not supposed to be an empty exercise. . . OFCOM, Vodafone argued, did not disclose sufficient inputs and Vodafone was required to backsolve figures in order to understand the inputs adopted. . . [C]ertain inputs were only provided to [mobile network operators] after the publication of the Decision, and then only following a request by Vodafone. The lack of detail in the consultation paper affected the detail of the consultation responses, which in turn affected the quality of OFCOM’s reasoning.30

  Ibid., para. 136g(ii).   Vodafone Ltd v Office of Communications [2008] CAT 22. 30   Ibid., paras 91–92. 28 29

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472  Comparative administrative law Relying on Coughlan and Greenpeace,31 OFCOM responded that Vodafone had been able to make detailed submissions, both to OFCOM during the consultation process and later to the CAT. Therefore, Vodafone had had adequate disclosure of inputs and, in any event, further information had been supplied once asked for. The CAT noted that the decision had followed a lengthy process, including two consultation documents and two notices issued under section 135 of the Communications Act 2003.32 It could hardly be suggested, therefore, that, at least in form, the consultation process had been inadequate. The Tribunal added, however, that: mere consultation and transparency alone are not sufficient grounds to save a decision which is in itself flawed as a substantive matter to the extent we find in this case. The purpose of consultation is to seek the informed views of, and best available information from, industry and, with the benefit of the expertise inherent in a specialised regulatory body, apply those views and information to the perceived industry failings.33

Citing Coughlan, the Tribunal found unanimously that the process undertaken by OFCOM had not fully allowed stakeholders to provide ‘intelligent and realistic responses as to the likely costs of adopting the proposed modifications. . . [I]n the absence of a provisional technical specification on which consultees could provide useful data, OFCOM deprived themselves of the opportunity properly to inform their analysis of the potential costs of their proposals’.34 The reason the CAT made this procedural finding was both its power and its technical ability to examine the merits of OFCOM’s approach. Earlier in the judgment, the CAT stated that: the uncertainty generated by the absence of a technical specification was, in the circumstances, such as to render any estimate of costs by individual industry participants speculative and potentially misleading. This situation was exacerbated by the potential for considerably divergent cost estimates, as each consultee replied separately and on the basis of their own particular individual assumptions.35

Contrast this with the scenario of orthodox judicial review: faced with the same case, a generalist judicial review court could have found that the consultation was adequate because, in form, it was not flawed. In this case, the appreciation of the flaws in the process resulted from the CAT’s technical appreciation of the deficiencies of the document that should have underlain the consultation process and the types of input required. This type of assessment would have been much more challenging for a generalist court.

31   R v North and East Devon Health Authority, ex parte Coughlan [2001] Q.B. 213; R (on the application of Greenpeace Ltd) v Secretary of State for Trade and Industry [2007] EWHC 311. 32   Section 135 empowers OFCOM to require industry participants to provide the agency with ‘all such information as [it considers] necessary for the purpose of carrying out [its] functions’. 33   Vodafone, para. 94. 34   Ibid., para. 95. 35   Ibid., para 64. The Tribunal added that ‘in the circumstances, this position could have been cured at an earlier stage in the consultation process by requiring MNOs and other industry participants to design a provisional sample solution, to cost this solution and thereby remove a large element of uncertainty in the figures that were subsequently adopted by OFCOM in their CBA’.

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The ‘double helix’ of process and substance review before the UK CAT  473 Furthermore, the Tribunal chose an interesting remedy. It remitted the whole matter to OFCOM for reconsideration, directing the agency to ‘seek the fresh views of the industry on the issue of altering the current arrangements in the UK for fixed and mobile porting, on the basis of appropriate evidence and analysis in light of the findings set out in this judgment’. Interestingly, the Tribunal went further in suggesting that ‘a staged approach to decision making in a matter of such complexity may be advantageous. Such an approach would enable information gathered from earlier stages to provide the basis for CBA[cost/ benefit analysis]-based decisions upon whether to proceed to the next stage(s)’.36 Even though this formulation suggests that the proposal for a ‘staged approach to decision making’ was not a binding direction but rather a recommendation, one could see this as a signal for the future: when it comes to questions of high complexity, such as number portability, the agency should seriously consider multiple stages in its policymaking process to better insulate its decisions from reversal on appeal. In conclusion, CAT review on appeal may give the impression of turning conventional judicial review on its head: in principle, the Tribunal exercises profound and rigorous scrutiny of the substance of regulatory decisions but is deferential on the process preceding those decisions. However, the Tribunal’s approach, as this section has shown, is not as simple as ‘deference on the process, heightened scrutiny on the merits’. I now turn to the advantages of intertwining merits and procedural review. 3.2  The Advantages of Blending Procedural and Merits Review Consider first the positive political theory dimension: the prospect of judicial review (conventional or on appeal) feeds back into the regulatory agency’s decision-making process which will seek to structure the process to shield it from judicial invalidation. Ian Turner has proposed a model to formalize this, whereby the agency’s choices are conditional on the court regime: (a) when facing a Perfectly Skeptical Court the Agency will never invest high effort; (b) when facing a Perfectly Deferential Court the Agency will invest high effort if and only if it would do so absent any prospect of judicial review; (c) when facing a Conditional-Deference Court the Agency will invest high effort if its policy motivations (policy improvement) and aversion to being overturned are sufficiently high to outweigh the costs of the effort. The presence of judicial review plays an integral role in inducing high effort investment from the agency by lowering the net cost of effort (Turner 2017, 79–80.) The third scenario is applicable in the context of CAT review on appeal. In other words, in general, if the agency knows the review body will be deferential as to policy decisions, it may treat the procedural requirements as a mere checklist obligation. However, if there is credible merits review by an appellate body that can appreciate the technical dimensions of the issue at stake, and if procedural review is built into the process as in the case of the CAT, there is no policy or process insurance. This situation, in turn, may induce   Ibid., para. 159.

36

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474  Comparative administrative law the agency to put in the effort to follow procedures that go beyond mere formalities. In this latter case, the incentive for the agency to invest high effort is present not only when the review body can substitute its own judgment for the agency decision but also when the review body can remit the decision to the agency with substantive directions (as, for example, under section 195(4) Communications Act 2003 in the UK). The second argument is related and points to the normative attractiveness of this model of review. That is to say, merits review facilitates procedural review: I suggest that procedural review incorporated into merits review is not a one-way street. Conversely, a specialist appellate body, some members of which have backgrounds relevant to the regulated sector, is better situated to appreciate in a credible fashion what kind of process was required to reach the substantive regulatory decision under review (cf. Popelier 2012, 259). But why do we care about robust procedural review? The normative underpinnings recognize that procedure facilitates legitimacy (Tyler 1988). Furthermore, procedural requirements, such as reason giving, have dignitarian undertones and recognize the capacity of citizens as rational moral agents who can engage in a dialogue with the public authority (Mashaw 2016, 11). Last, there is the instrumental argument for robust procedures that promote better decisions.37 A reader might see a semblance of circularity here. Process is necessary to get the substance right, but I have just argued that substantive review promotes good decision-making process. In fact, we should think of process and substance as a ‘double helix’. In highly technical fields such as economic regulation, procedural requirements may lead to better substantive decisions, but an expert appreciation of merits considerations can help structure the process more effectively to achieve the correct final outcome. Therefore, the CAT model serves as an example of the ‘double-helix model of review’ in which procedural and merits review should not be disentangled. Furthermore, the blend of merits and process review facilitates participation rather than being undemocratic. I adopt (and adapt) Neil Komesar’s framework in which ‘variation in the performance of an institution is tied to the participation of important institutional actors’ (Komesar 1994, 3; Mantzari 2015). A credible system of ‘double-helix review’ enhances the robustness of the decision-making process by ensuring, for instance, that public consultation has been properly conducted in a way that has allowed the voices of different stakeholders to be heard or that the cost-benefit analysis demonstrates an appreciation of the complexity of the interests at stake. This process-enabling function of merits review is particularly important in the context of polycentric disputes (cf. Fuller 1978). Last, the intrinsic connection between process and substance as ‘two aspects of the public law form’ has recently also found strong jurisprudential support (Dyzenhaus 2015). There is a third, empirical, argument in favor of blending procedural and substantive review. This approach is consistent with trends we see in other European and American cases, where substantive review of public decisions has been enriched to include some review of the process that has led to these decisions. This has been termed ‘semiprocedural judicial review’ (Bar-Siman-Tov 2012). Even if this is not a novel, separate type of review but a reflection of an evidence-based judicial reflex (Alemanno 2013, 327), the point remains that the ‘double-helix model’ of CAT review could fit well into emerging broader patterns. Indeed, even in human rights cases in the UK where, as Part 1 has outlined, the 37

  R (Osborn) v Parole Board [2013] UKSC 61 [66]–[67].

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The ‘double helix’ of process and substance review before the UK CAT  475 courts have adopted a results-oriented approach, the decision-making process may still feature in the courts’ judgment regarding deference to the primary decision-maker.38 In short, the case law of the CAT reflects a ‘double-helix model’ of merits and process review, and this represents a distinctive advantage that this Tribunal brings to regulatory review. Admittedly, the risk of scrutiny on both these counts is a potential duplication of the regulatory process and the introduction of further delays—I call this ‘ossification squared’. There are complicated trade-offs associated with one or the other institutional choice. However, the example of the CAT does not bear out these risks. Indeed, if one is sympathetic to substantive review by a specialist court (for which Part 2 suggested there are good reasons), integrating procedural review into the enterprise facilitates a more robust substantive assessment with specific procedural signposts, and creates the right incentives for the agency.

4.  CONCLUSION: LESSONS FOR INSTITUTIONAL DESIGN The previous sections discussed two important advantages of the CAT: its hybrid structure that brings together judges and non-judicial experts, and the integration of procedural review into full merits review. This argument was made against the backdrop of the alternative institutional model of regulatory review by ordinary, generalist courts. However, I do not mean to suggest that generalist courts never employ, and expand, formal standards of review to engage in the kind of intensive review that the CAT practices. For instance, in the US, a focus on an agency’s reasons for a regulation has become the hallmark of judicial review (Mashaw 2007, 110).39 The point is instead that the ‘double helix’ model of review undertaken by an institution with a blend of legal and non-legal expertise supports a fuller assessment of the regulatory process that can improve policy outcomes. Generalist courts can infuse expertise into the judicial process by appointing scientific advisors as external consultants.40 However, appointing assessors may not be an equivalent alternative. Because of the ad hoc nature of the external appointment, assessors cannot develop an institutional ethos in the way that a member of the tribunal, who can associate with a public institution with clear statutory responsibilities, does. The counterargument points to the risk of capture of specialist court members with industry experience. This problem may be exaggerated (Croley 2000, 30) and, in any event, it is not clear why this risk is exacerbated in the case of expert tribunal members compared to external consultants with similar industry experience.   Denbigh High School [68]; Miss Behavin’ [37]; Geiringer (2015, 333).   Motor Vehicle Mfrs. Ass’n v State Farm, 463 U.S. 29 (1983) (rejecting the rescission of a rule because of the agency’s failure to consider amending its rule rather than rescinding it); Massachussets v EPA, 549 U.S. 497 (2007) (holding that the agency’s reasons not to regulate greenhouse gases were insufficient). 40   See, e.g., in the UK, s. 70 of the Senior Courts Act 1981 and CPR 35.15: 38 39

An assessor will take such part in the proceedings as the court may direct and in particular the court may direct an assessor to–(a) prepare a report for the court on any matter at issue in the proceedings; and (b) attend the whole or any part of the trial to advise the court on any such matter.

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476  Comparative administrative law In another institutional model, review of certain categories of regulatory decisions is vested in specific courts or chambers that develop subject-matter specialization. We find examples of this model in Finland (Market Court), Portugal (Court of Competition, Regulation and Supervision), Belgium, and Mexico (Ginsburg and Wright 2013, 789). However, these institutions do not offer the same degree of cross-disciplinary expertise as the model of the UK CAT (or the Canadian Competition Tribunal), which combines subject-matter and professional background specialization. If the two strands of the ‘double helix’ of process and substance review cannot be easily disentangled, optimizing their interface emerges as an important aim of regulatory reform. The CAT model can be a good starting point for reflection as different legal systems explore these challenging questions of institutional design.

ACKNOWLEDGMENTS I would like to thank the editors of this volume, my colleagues at the ‘International and EU Law’ Primary Unit at the University of Bristol Law School, and the participants in the Comparative Administrative Law Conference at Yale Law School for very helpful comments.

REFERENCES Alemanno, A. (2013), ‘The Emergence of the Evidence-Based Judicial Reflex: A Response to Bar-Siman-Tov’s Semiprocedural Review,’ The Theory and Practice of Legislation, 1, 327–40. Bar-Siman-Tov, I. (2012), ‘Semiprocedural judicial review’, Legisprudence, 6, 271–300. Baum, L. (2009), ‘Probing the Effects of Judicial Specialization,’ Duke Law Journal, 58, 1667–84. Baum, Lawrence (2011), Specializing the Courts, Chicago: University of Chicago Press. Breyer, Stephen (2011), ‘The Executive Branch, Administrative Action, and Comparative Expertise,’ Cardozo Law Review, 32, 2189–201. Cane, P. (2010), ‘Judicial Review and Merits Review: Comparing Administrative Adjudication by Courts and Tribunals,’ in Susan Rose-Ackerman and Peter Lindseth (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA, USA: Edward Elgar. Craig, Paul (2012), Administrative Law, 7th ed., London: Sweet & Maxwell. Croley, S.P. (2000), ‘Public Interested Regulation,’ Florida State University Law Review, 28, 7–107. Dyzenhaus, D. (2015), ‘Process and Substance as Aspects of the Public Law Form,’ Cambridge Law Journal, 74, 284–306. Feintuck, Mike (2004), ‘The Public Interest’ in Regulation, Oxford: Oxford University Press. Freeman, P. (2013), ‘Competition Decision Making and Judicial Control – The Role of the Specialised Tribunal,’ Remarks at the Centre for Competition Policy, UEA Annual Conference, Norwich 6–7 June 2013. Fuller, L.L. (1978), ‘The Forms and Limits of Adjudication’, Harvard Law Review, 92, 353–409. Geiringer, C. (2015), ‘Process and Outcome in Judicial Review of Public Authority Compatibility with Human Rights: A Comparative Perspective,’ in Hanna Wilberg and Mark Elliott (eds), The Scope and Intensity of Substantive Review: Traversing Taggart’s Rainbow, Oxford: Hart. Ginsburg, D.H. and J.D. Wright (2013), ‘Antitrust Courts: Specialists versus Generalists’, Fordham International Law Journal, 36, 788–810. Harlow, Carol and Richard Rawlings. (2009), Law and Administration, 3rd ed., Cambridge, UK: Cambridge University Press. Ip, E.C. (2014), ‘Taking a “Hard Look” at “Irrationality”: Substantive Review of Administrative Discretion in the US and UK Supreme Courts, Oxford Journal of Legal Studies 34, 481–510. Komesar, Neil K. (1994), Imperfect Alternatives: Choosing Institutions in Law, Economics and Public Policy, Chicago: University of Chicago Press. Mantzari, D. (2015), ‘Economic Evidence in Regulatory Disputes: Revisiting the Court–Regulatory Agency Relationship in the US and the UK,’ Oxford Journal of Legal Studies, 1–30.

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The ‘double helix’ of process and substance review before the UK CAT  477 Mashaw, J.L. (2007), ‘Reasoned Administration: The European Union, the United States, and the Project of Democratic Governance,’ George Washington Law Review, 76, 99–124. Mashaw, J.L. (2016), ‘Public Reason and Administrative Legitimacy’, in John Bell, Mark Elliott, Jason NE Varuhas and Philip Murray (eds), Public Law Adjudication in Common Law Systems: Process and Substance, Oxford: Hart. Maule, J.E. (1999), ‘Instant Replay, Weak Teams, and Disputed Calls: An Empirical Study of Alleged Tax Court Judge Bias,’ Tennessee Law Review, 66, 351–426. Miles, T.J. and C.R. Sunstein (2006), ‘Do Judges Make Regulatory Policy? An Empirical Investigation of Chevron’, University of Chicago Law Review, 73, 823–82. Miller, B. and B. Curry (2013), ‘Experts Judging Experts: The Role of Expertise in Reviewing Agency Decision Making’, Law and Social Inquiry, 38, 55–71. Ottow, Annetje (2015), Market and Competition Authorities: Good Agency Principles, Oxford: Oxford University Press. Popelier, P. (2012), ‘Preliminary Comments on the Role of Courts as Regulatory Watchdogs’, Legisprudence, 6, 257–70. Rawlings, R. (2010), ‘Changed Conditions, Old Truths: Judicial Review in a Regulatory Laboratory’, in Dawn Oliver, Tony Prosser and Richard Rawlings (eds), The Regulatory State: Constitutional Implications, Oxford: Oxford University Press. Revesz, R.L. (1990), ‘Specialized Courts and the Administrative Lawmaking System’, University of Pennsylvania Law Review, 138, 1111–74. Scott, C. (2000), ‘Accountability in the Regulatory State’, Journal of Law and Society, 27, 38–60. Taggart, M. (2003), ‘Reinventing Administrative Law’, in Nicholas Bamforth and Peter Leyland, (eds), Public Law in a Multi-layered Constitution, Oxford: Hart. Turner, I.R. (2017), ‘Working Smart and Hard? Agency Effort, Judicial Review, and Policy Precision,’ Journal of Theoretical Politics, 29(1), 69–96. Tyler, T.R. (1988), ‘What Is Procedural Justice?: Criteria Used by Citizens To Assess the Fairness of Legal Procedures,’ Law & Society Review, 22, 103–36. Wilberg, H. and M. Elliott (2015), ‘Introduction’, in Hanna Wilberg and Mark Elliott, (eds), The Scope and Intensity of Substantive Review: Traversing Taggart’s Rainbow, Oxford: Hart. Wood, D.P. (1997), ‘Generalist Judges in a Specialized World’, SMU Law Review, 50, 1755–68.

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29.  Judicial deference to agency’s discretion in new democracies: observations on constitutional decisions in Poland, Taiwan, and South Africa Cheng-Yi Huang

INTRODUCTION The tension between judicial control, legislative delegation, and administrative discretion is an ever-contested issue in administrative law. Whether approached from the perspective of common law ultra vires doctrine or from that of the continental Rechtsstaat, courts must ensure that an agency, in exercising its discretion, does not go beyond the scope of legislative delegation. Constitutional limits on delegation, in turn, go to the ultimately democratic nature of the system: only where the administrative body can claim to exercise authority flowing from a constitutional delegation of power from the legislature does that administrative body enjoy democratic legitimacy. However, as shown in the experience of Germany in interwar Europe in the twentieth century, overbroad delegations can pose a danger for democracy. The flood of broad enabling laws of the 1920s ultimately culminated in the Nazi’s Ermächtigungsgesetz, or Enabling Act, of March 24, 1933, providing the legal foundation, if not the political cause, for the National-Socialist dictatorship (Lindseth 2004, 1341–71). As a consequence, the post-World War II German constitution required the legislature to specify the ‘content, purpose, and extent’ (‘Inhalt, Zweck und Ausmaβ’) of the legislative authorization in the statutes (Currie 1995, 126), as a means of preventing future legislative abdications.1 In addition, the legislature is not generally free to delegate certain kinds of policy choices to agencies. If an administrative action would significantly affect fundamental rights, these infringements must be specific­ally ­authorized by law or the constitution. These doctrines have become a constitutional paradigm for new democracies in dealing with the dilemma of legislative delegation and administrative rulemaking. New democracies, the subject of this chapter, have usually suffered from the abuse of administrative power and excessive legislative delegation in the past. After democratization, these countries were understandably cautious about broad legislative delegations of rulemaking power to the executive branch, as well as about the exercise of unbounded administrative discretion. Some of the post-transitional countries have enshrined the postwar German constitutional principles into their own constitutions, as in the case of Poland.2 A more groundbreaking step can be seen in South Africa’s attempt, in its 1996

1   In the following discussion, I use ‘the German style of intelligible principle’ or simply ‘the intelligible principle’ to refer to the German principle of determinacy ‘Der Grundsatz der Bestimmtheit’ that flows from this constitutional requirement. 2   Section 1, Article 92 of the 1997 Constitution of the Republic of Poland.

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Judicial deference to agency’s discretion in new democracies  479 Constitution, to constitutionalize the right to administrative justice, mandating that administrative action be reviewed by the court so as to ensure its lawfulness, reasonableness and procedural fairness.3 On the other hand, constitutional courts in some new democracies develop new jurisprudence to constrain the executive power. For example, the Council of Grand Justices in Taiwan frequently applies the ‘statutory reservation principle’ (Prinzip des Gesetzesvorbehalt), a constitutional doctrine derived from Article 80(1) of the German Basic Law, in administrative cases. With enhanced legal institutions (administrative courts), rights-oriented legislation (Administrative Procedure Acts) and newly-adopted constitutional cannons (e.g. Der Grundsatz der Bestimmtheit), the judicial power in new democracies often asserts itself as a constraint on the executive power in order to prevent democratic breakdown during and after transition. Indeed, many of these courts have exercised extensive power over administrative policy-making in the last three decades (Tate and Vallinder 1996; Ginsburg 2003; Ginsburg and Chen 2008). Nevertheless, what might intrigue scholars of comparative administrative law is the ambiguous trend in certain post-transitional countries toward what might be termed judicial self-restraint, where the court examines legislative delegation and administrative discretion with more lenient standards.4 These courts seem to credit the discretionary power of the executive branch to a sometimes surprising extent, given their recent experience with authoritarian rule. This chapter explores evidence of this tendency in the cases of post-transitional Poland, Taiwan, and South Africa. All three countries have experienced democratic transitions since the late 1980s. In the process, their constitutional courts have all struggled to establish judicial supremacy over constitutional interpretation. However, in the second decade after democratization, a series of cases in these countries suggest that constitutional courts are prepared to defer to legislative decisions delegating broad regulatory power to administrative agencies for their day-to-day experience and expertise. By focusing on these three cases, this chapter explores two questions: first, why do constitutional courts in post-transitional countries display a deferential attitude in administrative law cases? Second, what happens after their embrace of judicial deference? The chapter discusses how South Africa and Taiwan have ‘proceduralized’ judicial review of administrative policymaking as a response to the resurgence of arbitrary executive power, whereas the Polish Constitutional Tribunal has not yet embraced this tendency. I begin by examining each particular case in great detail. The first two cases focus on the degree of deference owed to a legislature in choosing to delegate broad regulatory power to administrators; the third one deals with judicial deference to administrative decisionmaking. The intensity of judicial deference escalates with the three cases. The first one, the Polish Constitutional Tribunal, presents the least deferential case among the three

  Article 33 of the 1996 Constitution of the Republic of South Africa.   By ‘post-transitional contexts’ or ‘post-transitional countries’, I refer to nascent democracies that have just transited from political regimes of communism, fascism, authoritarianism, military dictatorship, apartheid, genocide and massive racial conflicts, etc. and have already entered a relatively stable and enduring political condition which may enable these countries to initiate their state-building processes. I use this minimalist term to avoid the ambiguous notion of ‘democratic consolidation,’ since there is no stable criteria to judge whether a country has consolidated its democratic regime or not. A stage of ‘post-transition’ starts when a country has been able to run popular elections nationwide and a democratic constitution is in use. 3 4

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480  Comparative administrative law courts, although it did loosen its rigid standard for legislative delegation in the judgment. The strongest type of deference can be found in the South African Constitutional Court’s judgment. After the case studies, I try to provide some explanations for the deferential turn, focusing on the historical heritage of administrative law from the authoritarian regime and the regulatory function of the court in post-transitional democracies. I argue that judicial review of administrative action before democratization has bestowed on the courts some credibility to retreat from judicial intervention. Meanwhile, desperate needs of political and socio-economic restructuring also press the courts to finetune their rigid control of administrative action. In so doing, the courts are responding to a greater challenge of democratic governance in post-transitional contexts: to what extent and in what way a court can participate in the process of state building. Meanwhile, what is the reaction from political branches to the courts’ engagement in policymaking? The backlashes seem to prompt the courts to employ procedural safeguards of administrative procedure as a means to counterbalance the challenge from the administrations. However, due process of administrative procedure might impose more burdens on the agency, which paradoxically jeopardizes the court’s endeavor to facilitate state-building in the post-transitional era. Whether the pro­ ceduralization of policy dispute can cope with the demand of effective governance turns out to be another challenge for the functioning of democracy in these countries.

1. POLAND: VACILLATING DEFERENCE AND THE FREEDOM OF ECONOMIC ACTIVITY The Polish Energy Law (Prawo energetyczne) of 1997 obliged energy companies to purchase electricity generated from renewable sources as well as ‘combined heat and power’ (CHP) (Nilsson et al. 2006, 2269). In case a company did not comply with the purchase obligation, the Energy Regulatory Office (Urząd Regulacji Energetyki, URE) would ask the company to pay a ‘compensation fee.’5 On December 15, 2000, the Minister of Economy issued a directive concerning the obligation to purchase energy from unconventional renewable resources (Oniszk-Popławska et al. 2003, 101). In fact, the EU also issued a directive regarding the promotion of renewable energy sources in 2001 (‘2001 Directive’), which was based on its 1997 White Paper on renewable energy (European Commission 1997).6 Although Poland was not a Member State of the EU 5

  Article 9 (3) of the Energy Law stipulated that:

[T]he Minister of Economy shall, by way of a regulation, impose upon energy enterprises engaged in the trade in, or transmission and distribution of, electricity or heat an obligation to purchase electricity from unconventional and renewable energy sources, as well as electricity co-generated with heat, and heat from unconventional and renewable sources; and specify the detailed scope of this obligation, including, taking account of the technology applied in energy generation, the size of the source and the method by which the costs of the purchase are to be reflected in tariffs. The English translation of this clause is quoted from the English summary of the Constitutional Tribunal’s Judgment of 25th July 2006 P24/05. 6   Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001. The EU’s 2001 Directive provided that all Member States should set their national indicative

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Judicial deference to agency’s discretion in new democracies  481 then, it was already in the process of negotiating its accession to the EU. Poland’s ambitious renewable-resource policy was therefore arguably a response to Poland’s bid for EU membership (Wohlgemuth and Wojtkowska-Łodej 2003, 112). Nevertheless, the Polish electricity industry was dominated largely by state-owned companies. It is reported that PSE (Polskie Sieci Elektroenergetyczne S.A.) played a leading role in the process of reform (Wohlgemuth and Wojtkowska-Łodej 2003, 116–17). As a transmission system operator, PSE was also a state-owned company controlled by the Ministry of Treasury. It was also obliged to purchase electricity generated from renewable sources under the Polish Energy Law. However, PSE did not comply with the requirement and was therefore charged a ­‘compensation fee’ by the URE. PSE then challenged the URE’s decision in the Regional Court for Competition and Consumer Protection in Warsaw, but the Regional Court ruled in favour of the agency. PSE then appealed the case to the Warsaw Court of Appeals, arguing that the purchase-quota requirement was unconstitutional because it violated the constitutionally protected freedom of economic activities. Article 22 of the 1997 Constitution provides: ‘Limitations upon the freedom of economic activity may be imposed only by means of statute and only for important public reasons’ (emphasis added). From its birth in 1986, the Constitutional Tribunal had applied a strict standard to cases involving delegated legislation (Brzezinski and Garlicki 1995, 30). Whenever the executive branch took regulatory action that interfered with people’s fundamental rights, the tribunal had required that the regulation be based on express legislative delegation, whose scope and content should be clearly defined in statute.7 PSE argued that, because the purchase obligation restricted economic freedom, it needed to be specified in the statute, rather than in a directive issued by the Ministry of Economy. Notwithstanding an earlier decision which had held certain bio-fuel regulations unconstitutional,8 the tribunal ruled for the Ministry of Economy in the Energy case. Citing several legal treatises on economic law, the tribunal reasoned that the freedom of economic activity must be balanced against other constitutional values, like the security of the citizens as well as the principle of sustainable development (Article 5) and en­vironmental protection (Article 74). The court further argued that although the language of Article 22 is very similar to that of Article 31(3), they are not identical. According to Article 31(3), any limitation on constitutional freedoms and rights must be imposed only by statute (tylko w ustawie). However, the limitation on freedom of economic activity, according to Article 22, should be imposed ‘by means of statute’ (w drodze ustawy). According to the tribunal’s explanation, the phrase ‘by means of statute’ indicates a ‘limitation on freedom may be achieved by using statute. In the absence of

targets for future energy consumption of renewable sources in the next ten years. The European Commission would thereafter evaluate whether these national quotas had been consistent with the ‘global indicative target’ of 12 per cent of gross national energy consumption by 2010. 7   Judgment of 26th June 2001, OTK ZU no. 5, entry 122, ref. U 6/00, p. 8, original document: (http://www.trybunal.gov.pl/OTK/teksty/otkpdf/2001/u_06_00.pdf). 8   Judgment of 21st April 2004, OTK ZU no. 4A, entry 31, ref. K 33/03. Original document: http://www.trybunal.gov.pl/OTK/teksty/otkpdf/2004/K_33_03.pdf; English summary is available here: http://www.trybunal.gov.pl/eng/summaries/documents/K_33_03_GB.pdf,accessed: April 16th 2009. See also Nilsson et al. 2006, 2268.

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482  Comparative administrative law statute, the construction of limitation cannot take place at all. Only a statute can legitimize limitations introduced by way of administrative directive issued thereunder’.9 In contrast, the tribunal noted that ‘the term “only by statute” expressly excludes the [interpretive] possibility one can find in the term of “by means of statute”’.10 The scope of the limitation should also be intelligible so that one can easily conceive of the limitation through statutory language. However, in the case of freedom of economic activity, Article 22 of the Constitution does not set the same requirement. In other words, ‘by means of statute’ allows the legislature to delegate regulatory power to the executive by statute. Accordingly, the government can issue a directive to limit freedom of economic activity on the basis of legislative delegation. The Constitutional Tribunal confirmed that the purchase obligation satisfied the criteria for public interest in that the decision reflected an effort to balance environmental development, energy security, and sustainable development, and further accorded with an earlier EU directive from 2001. The tribunal also found that the law presented clear instructions essential to issuing an executive directive on the issue of purchase ­obligation.11 In addition, Article 9(3) of the Energy Law required the Minister to consider the technology of energy generation, the size of the energy source, and the methods by which costs of purchase are to be reflected in tariffs. The tribunal reasoned that, in terms of state-controlled markets like the energy industry, these legislative considerations had  fulfilled constitutional requirements of ‘essential elements reservation’. Moreover, the Constitutional Tribunal indicated that ‘[i]t is up to the legislator to decide whether the delegating clauses should be more specific (detailed).’12 According to the tribunal, it is the legislature’s job to evaluate whether it is possible and in accordance with constitutional understanding to specify the delegation, which would further shape the content of this regulation. As long as Article 9(3) covered the essential elements of obligation, it passed constitutional scrutiny.

2. TAIWAN: DEJUDICIALIZATION OF ENVIRONMENTAL REGULATION Judicialization of governance is an emerging phenomenon in post-democratization Taiwan. Since its political liberalization in the late 1980s, the Council of Grand Justice (Taiwan’s analogue to a ‘constitutional court’) has reined in the authoritarian state by recourse to the German concept of the Rechtsstaat, especially its competent relating to legislative delegation. The Council’s effort arguably culminated in its Interpretation No. 443 (1997),13 introducing the German doctrine known as System des Abgestuften

  Judgment of 25th July 2006, OTK ZU no. 7A, entry 87, ref. P 24/05.  Ibid. 11  Ibid. 12   Ibid., ‘Do ustawodawcy należy rozstrzygnięcie, czy upoważnienie powinno być bardziej szczegółowe.’ 13   Judicial Yuan, Constitutional Interpretation No. 443 (Dec. 26, 1997), English translation is available at http://www.judicial.gov.tw/CONSTITUTIONALCOURT/EN/p03_01.asp?expno5​ 443, accessed 21 October 2016.  9 10

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Judicial deference to agency’s discretion in new democracies  483 Vorbehalts (literally, the ‘differentiated system of reservation’ of power belonging to the legislature, which cannot be delegated). To some extent, the Council’s full-fledged application of the Rechtsstaat in the realm of administrative law has facilitated Taiwan’s democratic transition based upon the rule of law (Chang 2001). However, 20 years after democratization, the Council began to articulate an approach of self-restraint in the judicial review of administrative action. The most important decision in this regard was its Interpretation No. 612 (2006),14 which gives more deference to the environmental agency’s regulatory power. Handed down five and a half years after Taiwan brought into effect a new Administrative Procedure Law, Interpretation No. 612 concerned governmental supervision over waste management companies. The threshold question was the constitutionality of the delegation of power contained in Article 21 of the Waste Disposal Act. This question in fact merged, however, with the more detailed question of how much deference the regulator should properly receive in the interpretation of an ambiguous statute. Article 21 provided in pertinent part that, ‘the regulatory authority shall prescribe the regulations concerning the supervision of and assistance to public and private waste cleanup and disposal organs, as well as the qualifications of the specialized technical personnel’. Mr. Hung, a technician in a cleanup company, whose license was revoked, brought the case to the Council challenging the administrative rule promulgated by the Environmental Protection Administration, which listed several conditions regarding the revocation of professional licenses. According to the rule, the illegal and undue operation of a waste disposal company constitutes the reason to revoke the company’s operating license as well as the technician’s professional license. Mr. Hung’s company was found to have wrongfully operated the process of waste disposal, causing pollution of the soil around the storage facility. Mr. Hung argued that he was not a manager at the factory and that, consequently, he should not bear the responsibility of the wrongful operations of the factory’s managerial personnel. Mr. Hung cited the Council’s decisions in Interpretation No. 313, 394, 402, 443, and 570, arguing that administrative rules which set limitations on freedoms and rights should have intelligible legislative delegation.15 Nevertheless, the Council found that ‘although the said enabling provision did not specify the content and scope of the qualifications of the specialized technical personnel, it should be reasoned, based on systematic interpretation that the lawmakers’ intent was to delegate the power to the competent authority to decide [. . .]’. In arriving at this conclusion, the Council reconfirmed the purposive interpretation it had articulated in an earlier case,16 recognizing the need for deferring to administrative expertise in a modern state, especially in the arenas of environmental, technological, and health regulation, which are filled with uncertainty and risks. In the Council’s view,

14   Judicial Yuan, Constitutional Interpretation No. 612 (June 12, 2007) (Taiwan); English translation is available at http://www.judicial.gov.tw/CONSTITUTIONALCOURT/en/p03_01. asp?expno5612, accessed 21 October 2016. 15   Mr. Hung’s Constitutional Petition (01-07-1994), see supra note 24, Constitutional Interpretation No. 612, pp. 71–77. 16   Judicial Yuan, Constitutional Interpretation No. 538 (January 22, 2002) (Taiwan), English translation is available at http://www.judicial.gov.tw/CONSTITUTIONALCOURT/en/p03_01. asp?expno5538, accessed 21 October 2016.

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484  Comparative administrative law the Waste Disposal Act was designated to protect the health of citizens from unforeseen environmental pollution. Therefore, public interest served as the main purpose of this legislation. Article 21 as the enabling clause should be construed in accordance with the legislative purpose. The Council thus held that the existing mechanism of supervision provided in Article 21 had sufficiently satisfied the need of public interest because it could effectively control the waste disposal companies and deter potential law-breakers. Therefore, even though its past precedents indicated that Article 21 implicated a fundamental right (the ‘right to work’, in this case in the waste disposal field) and therefore, the regulatory power it enabled should belong within the ‘reserve’ (Vorbehalt) that must be retained by the legislature, the Council held that the Legislative Yuan could delegate to the Environmental Protection Administration the power to revoke the technician’s professional licenses. This seemingly trivial case sparked a fierce debate among the justices. On the basis of textual analysis, Justice Liao Yi-nan and Justice Wang He-hsiung, the two specialists of administrative law on the bench, criticized the majority opinion for its confusion regarding delegated administrative rules. The two justices argued that by holding the general delegation under Article 21 of the Waste Disposal Act to be constitutional, the majority risked jeopardizing the well-established statutory reservation doctrine and the need, in effect, for a German-style ‘intelligible principle’ (Der Grundsatz der Bestimmtheit) to guide the judiciary in the interpretation of the statute. Meanwhile, Justice Hsu Yu-hsiou, a criminal law scholar, in her dissenting opinion, also denounced this interpretation as ‘a judicial review without any review’. In contrast, Justice Pong Fong-zhi and Justice Hsu Bi-hu, two experienced judges, argued in their concurring opinion that the Waste Disposal Act was in fact a policy choice made by the Legislative Yuan. The Legislative Yuan had deliberated collectively and had decided to delegate to the EPA to adopt appropriate regulations regarding waste-disposal issues. The justices went on to argue that this general delegation was a value choice of the legislative branch that the Council should not displace with its own judgment. Meanwhile, pursuant to the proportionality test that the Council had previously adopted,17 the two justices argued that this rule’s negative effect is not greater than the public interest protected by the rule. This concurring opinion implied that the Council is neither better suited than the executive branch to make policy decisions nor has legitimate reasons to challenge the policy judgment of the legislative branch. In short, the concurrence argued that it is the political branches that should be held accountable for their environmental policy.18 Following Interpretation No. 612, the Council upheld six administrative rules in ten cases in respect of agencies’ discretion and policy choices (as of 2009).19 This series of

17   Judicial Yuan, Constitutional Interpretation No. 522, March 9, 2001, English translation is available at http://www.judicial.gov.tw/CONSTITUTIONALCOURT/en/p03_01.asp?expno5522, accessed 21 October 2016. 18   Justice Pong’s and Justice Hsu’s Joint Concurring Opinion, supra note 24, Constitutional Interpretation No. 612, pp. 6–31. 19   The six constitutional cases include Constitutional Interpretation No. 614 (July 28, 2006), No. 615 (July 28, 2006), 628 (June 22, 2007), 629 (July 6, 2007), 643 (May 30, 2008), 648 (October 24, 2008). The unconstitutional cases include Constitutional Interpretation No. 619 (November 10, 2006), 636 (February 1, 2008), 638 (March 7, 2008), 658 (April 10, 2009). All these cases’ English

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Judicial deference to agency’s discretion in new democracies  485 interpretations may mark the beginning of a new age in the judicial approach to the regulatory state in Taiwan, though the court also applies the proportionality test more and more frequently (Huang and Law 2016).

3. SOUTH AFRICA: DELIVERING TRANSFORMATION THROUGH JUDICIAL DEFERENCE Bato Star Fishing v. Minister of Environmental Affairs (‘Bato Star’),20 a 2004 decision of the South African Constitutional Court (‘Constitutional Court’), is one of the most influential cases in South African administrative law since this country’s return to democracy in 1994.21 The case concerns the regulatory policy over the deep-sea hake fishing industry, one of the most lucrative sectors of the South African fisheries. White South Africans had long dominated this capital-intensive business. After democratization, however, the Marine Living Resources Act (‘MLRA’) of 1998 required the government to address the need to ‘restructure the fishing industry’ so as to transform its historical imbalances. Under the Marine Act, the Fisheries Transformation Council (‘FTC’) has launched into reallocation of fishing rights for fishers from previously disadvantaged communities. In 2000, the Minister of the Department of Environmental Affairs and Tourism (‘DEAT’) abandoned the oft-criticized FTC and established a new branch of Marine and Coastal Management (‘MCM’). The Deputy Director-General of the MCM announced in early 2001 that ‘the government would no longer allocate fishing rights on an annual basis’ (Kleinschmidt et al. 2006, 5–6). It then invited applications for commercial fishing rights across all sectors regarding specifically bids on four-year quota allocations. The department also issued policy guidelines regarding the allocations, declaring that ‘[t]he policy on transformation is broadly to reward those ex-rights holders who have performed and taken steps to transform and to admit suitable new HDP entrants that demonstrate both a capacity to catch, process and harvest the right applied for and a willingness to invest in the industry’.22 More than 5,000 applicants applied for the quota allocations, and overall the applications summed up to 1.1 million tonnes of hake per annum, more than nine times the total allowable catch. To balance the need for industrial restructuring with stabilization, the department had turned down all applications from new entrants. Two medium-sized ‘black empowerment’ fishing companies brought their cases to challenge the government’s quota allocation for deep-sea hake fishing, focusing their challenge on the legislative purpose of MLRA.23

translation are available at http://www.judicial.gov.tw/CONSTITUTIONALCOURT/en/p03.asp, accessed 21 October 2016. 20   2004 (4) SA 490 (CC). 21   Hugh Corder once said of Bato Star, ‘This is the most influential judgment since 1994 as regards the meaning to be given to review for reasonableness’ (Corder 2006, 339). 22   2004 (4) SA 490 (CC), para 12. 23   Bato Star entered the deep-sea hake fishery industry in 1999, with a moderate quota of 1,000 tonnes. It sought a new allocation for 12,000 tonnes in this four-year period. But it only got 856 tonnes. Dissatisfied with the result, Bato Star sought to appeal this decision to the Minister. After the appeal process, the department granted Bato Star 17 more tonnes, which made for a total of 873

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486  Comparative administrative law They won in the Cape Provincial Division of the South African High Court but lost in the Supreme Court of Appeal. One of them, Bato Star Fishing, went on to appeal the case to the Constitutional Court. The Constitutional Court, however, deferred to the expertise of the Ministry of Environmental Affairs in its administration of the statutory scheme. Although lower courts had previously adopted an approach of self-restraint in an administrative context,24 Bato Star was the first instance in which the Constitutional Court clearly expressed a preference for judicial deference in such circumstances. In Bato Star, Justice Kate O’Regan, writing for the court, confronted two central issues. The first was whether the Chief Director had misconstrued his legal obligations under the MLRA, namely in Section 2 (j) and Section 18 (5). The second was whether the Chief Director’s decision was a reasonable one. Section 2 of the MLRA states the objectives and item (j) provides, ‘the need to restructure the fishing industry to address historical imbalances and to achieve equity within all branches of the fishing industry’. Section 18 (5) provides that ‘In granting any right referred to in subsection (1), the Minister shall, in order to achieve the objectives contemplated in section 2, have particular regard to the need to permit new entrants, particularly those from historically disadvantaged sectors of society.’ In dealing with the first issue, Justice O’Regan applied a pragmatic approach to the statutory interpretation. She did not regard the objectives stated in Section 2 as merely advisory or functioning like a policy guideline, as the Supreme Court of Appeal had done. Rather, she emphasized that the objective of transformation is informed by the Constitution and should be given legal effects. Therefore, while making his decision on quotas, the Chief Director had been ‘obliged to give special attention to the importance of redressing imbalances in the industry with the goal of achieving transformation in the industry’.25 However, Justice O’Regan noted that there are other goals critical in the MLRA, such as environmental protection, which also served as constitutional commitments. Therefore, although she recognized that the statute stressed the need for transformation in the industry, she came to a conclusion that ‘there is no simple formula for transformation’ and that ‘[t]he manner in which transformation is to be achieved is, to a significant extent, left to the discretion of the decision-maker’.26 But the question remains: what should be the test to determine whether the Chief Director took these objectives into consideration? The test laid out by Justice O’Regan depends on practical examination of official records generated by the Director. She pointed out: ‘At the very least, some practical steps must be taken in the process of the fulfillment of these needs each time allocations are made if possible.’27 It is held that tonnes. Phambili Fisheries was another medium-size company that completed a review application in the Cape Provincial Division of the South African High Court. 24   Logbro Properties CC v Bedderson NO and Others, 2002 ZASCA 135. In fact, the Constitutional Court had previously issued some judgments mentioning the self-constrained role of the judiciary in a democratic government. See Bel Porto School Governing Body and Others v Premier, Western Cape, and Another, 2002 (3) SA 265 (CC); Du Plessis and Others v De Klerk and Another, 1996 (3) SA 850 (CC); S v Lawrence, 1997 (4) SA 1176 (CC). These judgments have been cited by the Supreme Court of Appeal in Phambili, (1) (40/2003) [2003] ZASCA 47. 25   2004 (4) SA 490 (CC), para. 34. 26   Ibid., para. 35. 27   Ibid., para. 40.

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Judicial deference to agency’s discretion in new democracies  487 ‘so long as the importance of the practical fulfillment of these needs is recognized and a court is satisfied that the importance of the practical fulfillment of sections 2 (j) and 18 (5) has been heeded, the decision will not be reviewable’.28 Therefore, if the Chief Director could show that he had taken certain practical steps in relation to the object­ ives in the decision-making process, he would have fulfilled his obligation and thus had neither ignored nor misapplied the empowering statutes. The court then turned to the even more difficult second question: what constitutes a reasonable administrative decision? Justice O’Regan found that this determination would ‘depend on the circumstances of each case’. Justice O’Regan enumerated several factors to be considered: ‘the nature of the decision, the identity and expertise of the decision-maker, the range of factors relevant to the decision, the reasons given for the decision, the nature of the competing interests involved and the impact of the decision on the lives and well-being of those affected’.29 However, except for reason given, all these factors are secondorder inquiries, in that they facilitate the characterization of the decision-making, but provide no criteria to evaluate whether the reasons of the decision itself are in accordance with constitutional values. In responding to the key issue about reasonableness, Justice O’Regan remained vigilantly faithful to her judgment that ‘[t]he court should take care not to usurp the functions of administrative agencies. Its task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the Constitution’.30 Though approving the idea of judicial deference, Justice O’Regan addressed this issue from an institutional perspective: ‘[T]he need for courts to treat decision-makers with appropriate deference or respect flows not from judicial courtesy or etiquette but from the fundamental constitutional principle of the separation of powers itself.’31 In her opinion, the question of deference is a question of law that the court must confront to demarcate the scope of its decision-making power. In a difficult policy issue like the allocation of hake quotas, which involved technologic­ al  knowledge, multiple political values, and administrative expertise, the justice reasoned, ‘If we are satisfied that the Chief Director did take into account all the factors, struck a reasonable equilibrium between them and selected reasonable means to pursue the identified legislative goal in the light of the facts before him,’ the court should give due respect to the agency’s decision and not interfere with the administrative decision-making process.32 In this vein, Justice O’Regan reasoned that it is not the court’s job to decide whether an increase of 25 or 40 per cent will give effect to the purpose of transformation specified in Section 2 (j), whereas 5 per cent will not. Instead, from Justice O’Regan’s perspective, the courts should simply make sure that by adopting 5 per cent, the Chief Director acted in a reasonable manner.

 Ibid.   Ibid., para. 45. 30  Ibid. 31   Id., para 46. 32   Id., para 50. 28 29

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488  Comparative administrative law

4.  IS THERE REALLY A DEFERENTIAL TURN? The three cases discussed above happened during 2004 and 2007, roughly in the second decade after democratization. However, since 2008, we have seen governments in these countries expanding their power, leading to mass protests and political turmoil. After its victory in 2015, the Law and Justice Party (Pis) in Poland controlled the Sejm and the office of President. The government passed an amendment to the Act of Constitutional Tribunal, aiming to control the Constitutional Tribunal by new restrictions on quorum and term limits.33 Meanwhile, the Constitutional Tribunal also tried to strike back at the government’s agenda by declaring parts of the amendment unconstitutional. The Premier did not publish this judgment, which led to a constitutional deadlock inviting concerns from the European Commission and the United States (Sledzinska-Simon 2016; Koncewicz 2016).34 A similar episode also happened in South Africa, when President Jacob Zuma commented on the Constitutional Court’s split decisions on hard cases. According to President Zuma, the court’s dissenting opinions had shown the dysfunction of the Constitutional Court, which requires further reforms (Hoexter 2015). However, President Zuma was embattled in financial scandals then, while the Constitutional Court ruled that he did not uphold his constitutional duty, since he refused to repay the government for his spending on house improvements after the public protector’s report in 2014.35 Although he survived an impeachment in the National Assembly, he was under tremendous public pressure in South Africa.36 More and more people regard the ANC government as abusive and the court should function like a safety valve in preventing democratic breakdown. The fear of authoritarian resurgence can also be witnessed in Taiwan after 2009. After the landslide victory in both presidential and legislative elections in 2008 and again in 2012, the longtime authoritarian party, KMT, reclaimed its power in Taiwan. However, President Ma Ying-jeou, acting as the chairperson of KMT, disqualified the speaker of the Legislative Yuan from the membership of KMT in 2013 so that the speaker would lose his seat, since he was elected as the party’s representative based on proportional representation. Furthermore, the President pressed the legislature to pass the ‘Service Trade Agreement’ with China in 2014, which ignited a furious public outcry resulting in a 23-days ‘Occupying the Legislative Yuan.’ Although President Ma did not face any impeachment or constitutional condemnation, his administration was entangled with litigation in various policy domains. The most notable ones are about environmental impact assessment. After losing several cases in the Supreme Administrative Court, the Environmental Protection Agency even bought an advertisement criticizing the judg-

33   ‘Poland’s Constitutional Crisis Deepens After Top Court Annuls Law’, The Wall Street Journal, March 9, 2016. 34   See Sledzinska-Simon (2016); Koncewicz (2016). 35   Economic Freedom Fighters v Speaker of the National Assembly and Others; Democratic Alliance v Speaker of the National Assembly and Others [2016] ZACC 11, http://cdn.24.co.za/files/ Cms/General/d/3834/24efe59744c642a1a02360235f4d026b.pdf, accessed 21 October 2016. 36   Simon Allison, South Africa’s ‘Teflon president’ survives another day, but scandals will stick eventually, The Guardian, April 6, 2016, http://www.theguardian.com/world/2016/apr/06/ jacob-zuma-south-africa-anc-nkandla-impeachment.

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Judicial deference to agency’s discretion in new democracies  489 ments by administrative courts as ‘inefficient, meaningless and deleterious to the EIA system’ (Huang 2011).37 Many worried that the rule of law was in danger under Ma’s administration. Against this backdrop, how did constitutional courts respond to policy controversy in these new democracies? Did they retain the deferential approaches developed in the previous decades? In 2013, the constitutional court in Taiwan weighed in to strike down two critical provisions in the Urban Renewal Act.38 Like many megacities in the world, Taipei suffers from scarce land resources. Developers and construction companies allied with legislators to pass the Urban Renewal Act which allows only 10 per cent of residents to initiate the process of renewal application. The renewal projects are often associated with fierce fights among residents, especially when they involve forced eviction.39 The court struck down two provisions based on a novel doctrine of ‘due process of administrative procedure’ that demanded the agency to give petitioners the right to hearing. However, it also upheld two other provisions because they passed the test of proportionality. The key opinion in this highly regarded judgment is that the government must provide a process allowing ‘the interested parties to attend the hearing, present their statements and conduct oral arguments’ and the government should ‘take the entire records of the hearing into consideration, explain its rationale [. . .]’. The court construed its doctrine of ‘due process of administrative procedure’ from the constitutional requirement of ‘due process of law’. It mandated the executive branch, either national or local, to follow due process requirements, including holding hearings, giving notices to the stakeholders, collecting arguments and evidence, and making decisions based on records. The court thus elevated procedural justice of administrative action from statutory requirements (i.e. the Taiwanese Administrative Procedure Act) to constitutional requirement (due process of administrative procedure), though the scope of its application still remains unknown. Since then, the court has not been reluctant to apply this novel requirement to land use cases.40 The growing importance of procedural justice can be found not only in Taiwan but also in South Africa. In Joseph v City of Johannesburg, the South African Constitutional Court shifted from its reasonableness test (more deferential) to the requirement of pro­ cedural fairness in reviewing the decision of disconnecting electricity service to Ennerdale Mansion, a residential building in a low-income community in Johannesburg.41 Although the tenants of Ennerdale Mansion had paid the utility fee to their landlord, Thomas Nel, he had owed the local public utility company, City Power, up to R.400,000. City Power disconnected the power supply without any prior notice to the residents and the disconnection continued for more than 12 months. Many tenants had to move from the building because the living condition deteriorated soon after the termination of

37   See also June Tsai, Rule of law endangered in development dispute, Taiwan Today, http:// taiwantoday.tw/fp.asp?xItem595504&CtNode5436, accessed 21 October 2016. 38   Interpretation No. 709, http://www.judicial.gov.tw/constitutionalcourt/en/p03_01.asp?exp​ no5709, accessed 21 October 2016. 39   Loa Lok-sin, ‘Wang family protests eviction,’ Taipei Times, 3 March 2012 http://www.taipei​ times.com/News/taiwan/archives/2012/03/16/2003527927, accessed 21 October 2016. 40   See, for example, Interpretation No. 731 of 2015 and No. 739 of 2016. 41   2010 (4) SA 55 (CC).

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490  Comparative administrative law ­electricity supply.42 City Power rejected the tenants’ request to reconnect the electricity supply and claimed that there was no contractual relation between the tenants and the company. The High Court found the applicants could not establish prima facie right, since they were not ‘customers’ in any sense under the Credit Control By-laws. Therefore, it concluded that City Power had no obligation to deliver pre-termination notices to the ­tenants.43 The Constitutional Court first discussed whether or not the termination was an administrative action according to Section 3 of the Promotion of Administrative Justice Act (‘PAJA’). Justice Thembile Skweyiya wrote for the court, indicating that since the decision would ‘materially, adversely affect’ the applicants, it certainly had ‘direct, external legal effect’ on the applicants and should be recognized as an administrative action.44 However, the court rejected the applicants’ arguments on rights to adequate housing and human dignity. It also bypassed the reasonableness test employed in Bato Star. It relied on Section 3 (1) of PAJA to construe applicants’ right to procedurally fair administrative action. In the court’s view, to achieve the administrative justice enshrined in the Constitution, the administrator has to fulfill the requirements of Section 3(2)(b) of PAJA: to provide adequate notice of the nature and purpose of the proposed administrative action and a reasonable opportunity to make representations. The court argued that the main function of procedural fairness is ‘not only for the protection of citizens’ rights but also to facilitate trust in the public administration and in our participatory democracy’.45 Therefore, the tenants did enjoy the ‘public law right’ to receive electricity supply as the basic municipal service. While disconnecting the supply, City Power was actually obliged to provide them procedural fairness ‘before taking decision which would materially and adversely affect that right’. The South African Constitutional Court also rejected the respondent’s argument about administrative efficiency and capacity. Citing a judgment from 1999, the court observed ‘[a]s a young democracy facing immense challenges of transformation, we cannot deny the importance of the need to ensure the ability of the Executive to act efficiently and promptly’.46 The court regarded a notice as an instrument which, ‘remains open to users to approach City Power to challenge the proposed termination or to tender appropriate arrangements to pay off arrears’.47 It is a way to engage citizens in the process of decision-making guaranteed in the Constitution as the means to transform this country. It would not impede the government’s ability or bring too much workload to it. In other words, procedural fairness is the core value of South African Constitution to promote public trust in the government. The court in Joseph thus turned to procedural fairness, emphasizing that the process of decision-making should be more transparent and participatory. This represented a departure from the highly deferential approach in Bato Star. While contextual reasonableness   Dugard (2014), pp. 297–8.   2010 (4) SA 55 (CC), paras 10, 11. 44   Ibid., paras 27–31. 45   Ibid, para. 46. 46   Ibid., para. 62, Premier, Mpumalanga, and Another v Executive Committee, Association of State-Aided Schools, Eastern Transvaal [1998] ZACC 20; 1999 (2) SA 91 (CC), at para. 41. 47   Ibid., para. 63. 42 43

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Judicial deference to agency’s discretion in new democracies  491 test developed in that case continues to be widely applied in socio-economic rights cases, some have argued that this is a case-by-case standard, which gives the judges too much discretionary power and lacks substance (Quinot and Lienbenberg 2011, 648–52). Unlike the cases in Taiwan and South Africa, the Polish Constitutional Tribunal did not heavily rely on procedural fairness as a safeguard against the government’s abusive action in its recent judgments. In fact, the tribunal has continued its deferential attitude toward social and economic policies. For example, during the eight years (2007–15) of coalition government of the Civic Platform (PO) and the Polish People Party (PSL), it upheld the constitutionality of unpopular legislation regarding pension reform, which raised the age of retirement from 65 (for men) and 62 (for women) to 67 (for both).48 In 2015, before the PO-PSL government stepped down, the tribunal even helped to consolidate the government’s plan to move the pension fund from private institutions to the state, which might reduce Polish public debt sharply.49 A representative case of its deferential approach concerns the Gambling Act of 2009, in which the tribunal considered whether a provision eliminating the category of low-prize gaming machine violates Article 2 of the Constitution, demanding the protection of existing interests.50 Pursuant to the Gaming and Betting Act of 1992, the gaming machine offering prizes valuing less than 15 Euro in one game was classified as ‘low-prize’. These low-prize gaming machines were allowed to be installed in dining establishments, shops or service points which were at least 100 metres away from schools and educational institutions, care centres or religious places. However, the Sejm passed the Gambling Act in 2009, which prohibits any gaming machine being installed in places other than casinos (Article 14 (1)). For those with permits for low-prize machines, they could continue their business until the expiration of their permits (valid for six years). The purpose of this legislation was to reduce the number of these low-prize gaming machines. Companies of low-prize gaming machines brought cases to the administrative courts, claiming that their right to relocate machines from one place to the other, if the specified dining place was out of business, has been infringed by the new law. The administrative courts had split opinions on the issue. Before dealing with the constitutional issue of legitimate expectation, there is a pro­ cedural question about the EU regulation. According to Article 8 (1) of Directive 98/34/ EC of the European Council, the Member States shall communicate to the European Commission during the course of drafting any technical regulation. The Regional Administrative Court in Gdansk referred the case to the Court of Justice of the European Union (CJEU) for determining whether the provisions of the Gambling Act constituted ‘technical regulations’ within the meaning of Directive 98/34 and therefore, should be notified to the Commission. The CJEU’s judgment was in support of the gambling ­companies.51 However, the Constitutional Tribunal ruled that it is for the national court to decide whether these provisions would significantly influence the nature or the marketing of the product. It concluded, ‘the obligation to determine that fact lay with   Judgment of May 7 2014, case no. K43/12.   Judgment of November 4, 2015, case no. KT 1/14. 50   Judgment of July 23, 2013, case no. P 4/11. 51   Joint Cases C-213/11, C-214/11 and C-217/11 Fortuna, Grand and Forta sp. z o.o. v Dyrektor Izby Celnej w Gdyni, Judgment of July 19, 2012, the Court of Justice of the European Union. 48 49

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492  Comparative administrative law a competent national court’. It also ambitiously argued that the CJEU’s judgment on t­echnical ­regulation should not bind national courts and any public authority in Poland.52 Although the tribunal did not regard the issue of technical regulation as a question of law and then held that it was beyond the tribunal’s jurisdiction, it continued to review the legislation because ‘the conformity of the Gambling Act to the EU law, [. . .] does not automatically affect the assessment of the constitutionality of the regulation challenged by the court referring the question’.53 The tribunal held that the Gambling Act of 2009, by cancelling the type of low-prize gaming machine, did not violate constitutional protection of existing interest. It relied on Article 155 of the Code of Administrative Procedure of 1960 to argue that a final decision (like the permit) by which a party has acquired rights can be revoked or amended by the government, if the change is for public interest or in the legitimate interests of the party. It admitted that the new law would inevitably have the outcome of reducing the number of low-prize gambling machines. However, these were precisely ‘reasons for enacting the Gambling Act, which enhanced restrictions on gambling’.54 Meanwhile, the legislation had considered the transitional period, which allowed the companies to continue business until the expiration of their permits. Although the companies could not move the machines to places other than the location specified on their permits, it was not regarded as an infringement upon their acquired rights. The tribunal’s deferential attitude toward government’s legislation could be summed up by the speech given by its President Andrzej Rzepliński in 2016.55 In this speech, President Rzepliński confirmed that the legislature enjoys greater leverage in the area of social and economic policy so as to meet with national agenda of economic development.56 In his view, it is up to the legislature, not the court, to make the final decision in this area. However, the legislation of social and economic policy is always about distribution of interests and protection of property rights. The tribunal did not mention much about the due process of policymaking like the cases in Taiwan and South Africa. It still applies a lenient standard of review to those cases. The court had too little time to develop its own defensive jurisprudence to counterbalance the new government after November 2015. As mentioned, it was still defending the PO-PSL’s pension reform on November 4, and the new session of Sejm, controlled by Pis, started right after November 10, which passed the amendment to the Act of the Constitutional Tribunal on November 19. All of a sudden, the tribunal was embattled with the government. Even though this constitutional crisis is mainly about separation of powers issues, the tribunal’s deference to PO-PSL government represented by the case of the Gambling Act, rejecting direct application of the CJEU’s judgment and upholding

  See Sledzinska-Simon (2016), 478.   See note 59. The quote from the judgment follows the English translation on the Tribunal’s official website, http://trybunal.gov.pl/en/hearings/judgments/art/4619-gry-hazardowe-miejsce-ur​ zadzania-gier-na-automatach/, accessed 21 October 2016. 54  Ibid. 55   Andrzej Rzepliński, ‘Przemówienie na Zgromadzeniu Ogólnym Sędziów Trybunału Konstytucyjnego 20 kwietnia 2016 r’, online source: http://trybunal.gov.pl/uploads/media/Przemo​ wienie_Prezesa_TK_na_ZOSTK_2016.pdf. 56   Ibid., p.12. 52 53

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Judicial deference to agency’s discretion in new democracies  493 the legislation on the ground of public interest, might have planted the seed of revenge from the then opposition party, Pis.

5. CONCLUSION: WHY DO POST-TRANSITIONAL COURTS TURN DEFERENTIAL? One might regard such deferential judgments as the courts’ failure to safeguard constitutional values. But the emergence of deferential judgments is a product of confident courts have begun to reconsider their roles in post-transitional politics. They are not afraid of being criticized as executive-minded or as serving as the rubber-stamp of the government. They do not believe that deferential judgment will necessarily lead to the waning of their power. Rather, as seen in the three cases, the courts have confirmed the vital role of administrative agencies in the regulatory process in post-transitional societies. Why are the courts so confident in rendering deferential judgments? To answer this question, one has to examine the development of judicial review of administrative action in these countries. First of all, all three countries under review had established judicial authority in the area of administrative law before democratization. In 1980, the Polish Parliament established the High Administrative Court (Brzezinski 1993, 153, 172). Before the establishment of the Constitutional Tribunal in 1986, the High Administrative Court played a critical role in controlling governmental action. Some of its judgments had laid down the foundation for the Constitutional Tribunal to establish its jurisdiction over administrative power.57 Later, in 1986, the Constitutional Tribunal came into operation, which was the first of its kind in the former Communist bloc. In Taiwan, the Council of Grand Justices reclaimed its constitutional power stage by stage in the mid-1980s (Ginsburg 2003, 140–42). To expand its jurisdiction, the court first struck down administrative actions, especially those in the field of tax administration, so that it would not annoy the strongman (Chang 2001, 290­–305). With this pattern in mind, the court gradually built a series of judicial criteria by which it could examine the constitutionality of administrative rules since the early days of democratization. In pre-democratic South Africa, the judiciary was not always timid in confronting the apartheid regime (Baxter 1984, 329). Though it upheld apartheid legislation in cases like Lockhat, which recognized the Group Area Act as a legitimate ‘colossal social experiment,’58 nevertheless, it also overruled racially discriminatory administrative decisions in cases like Komani and Rikhoto.59 As Haysom and Plasket point out, ‘One of the peculiar features of South African society is that the courts allow an impoverished black employee to call his or her white employer to account, and a voteless resident to summon a white cabinet minister before court’ (Haysom and Plasket 1998, 307). The pre-democratic 57   According to Mark Brzezinski’s interview, Hubert Izdebski, a leading Polish legal historian at the University of Warsaw School of Law, held that the High Administrative Court ‘developed an area of legality in communist Poland, creating a gateway for democratic institutions’ (Brezezinski and Garlicki 1995, 21) . 58   Minister of the Interior v Lockhat, 1961 (2) SA 587 (A). 59   Komani NO v Bantu Affairs Administration Board, Peninsula Area, 1980 (4) SA 448 (A); OosRandse Administrasieraad en’n ander v Rikhoto, 1983 (3) SA 595 (A).

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494  Comparative administrative law jurisprudence of these courts had engendered not only the court’s authority but also popular trust in the judicial system. Without the historical heritage of trust in the judiciary, the courts may not have the leverage to render deferential judgments. Second, courts have to respond to the epidemic of government failure plaguing these post-transitional countries. Post-communist countries in Central and Eastern Europe were usually left with institutionally weak governments after democratization (Elster et al. 1998). This is also true in South Africa. Meanwhile, the fierce battles in elections can intensify the antagonism among political parties, which can ossify the everyday administration, as is the case in Taiwan. By their celebrated metaphor, Elster and his colleague described state-building in these nascent democracies as ‘building a ship in the open sea’ from the wreckages of former authoritarian regimes (Elster et al. 1998, 27). The courts’ pre-democratic jurisprudence often emphasized the formality of statutory delegation as a pivot from which to strike down administrative regulations and decisions. In addition, the courts used to find its justifications in implicit constitutional principles like the ‘democratic state based on the rule of law’ doctrine in Poland or the adopted Rechtsstaat doctrine in Taiwan. The doctrines were treated as given without any reasoning from the local contexts. Hence, there was a judicial tendency of detaching substantive justification from legal reasoning in these new democracies. In fact, this technical interpretation prevented the court from intimidating the authoritarian party in the past. After democratization, this approach also helped the court to shape its professional image as a neutral, nonpolitical third-party arbiter in the fragmented politics. However, with the emphasis on formality of statutory delegation, an activist court might paralyze the statebuilding of new democracies. Fears of an abusive executive power are common in transitional societies, but they do not guarantee the quality of life people expect to lead in a well-functioning democracy. Stringent judicial scrutiny of administrative action might hinder a healthy political process of policymaking. By mechanical application of legal doctrines, this situation would foster only a legal culture opposed to reason and argumentation. However, these courts, at least in South Africa and Taiwan, have shown some changes after two decades of democra­ tization. The court aims to keep the administration more competent and efficient on the one hand, but it also disavows executive tyranny that threatens the fundamental values of democratic constitutionalism. Therefore, the courts put more emphasis on the procedural requirement as a threshold of rational administration. With the resurgence of arbitrary executive power, the courts in Taiwan and South Africa began to rely on procedural fairness to constrain the administration. Procedural fairness is also a tool of the court to invite different sectors to sit down and talk to each other. It helps the court to garnish social trust. Procedural fairness is also aimed at improving the quality of reasoning, which is the basis of contextual reasonableness. It provides the court with more ideology-neutral measures to counteract the executive’s decisions. To avoid being entangled with the heated political fights, the courts function as a forum to foster mutual trust. It might not be fair to describe the courts’ procedural focus approach as judicial activism, since it is not necessarily the case that courts want to take a side in such disputes. Procedural requirements might nonetheless benefit different stakeholders of a policy. The turn to procedure in these new democracies means that these societies have fallen into divide and courts are assuming the role of trust-builders. The stories of Poland, Taiwan and South Africa, show how a self-restraining court may release the

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Judicial deference to agency’s discretion in new democracies  495 executive power from the anachronistic fears and reinvigorate the dynamic interaction among different political actors. Nevertheless, political dynamics might swing the pendulum back toward judicial formalism again. A set of process-centered, context-based, and rights-oriented procedural requirements may give the court more leverage to fine-tune the complicated relationship between the legislature, the executive and the civil societies.

REFERENCES Baxter, Lawrence (1984), Administrative Law. Cape Town: Juta & Co. Ltd. Brzezinski, M. (1993) ‘The Emergence of Judicial Review in Eastern Europe: The Case of Poland.’ American Journal of Comparative Law 41(2), 153–200. Brezezinski, M., and L. Garlicki (1995), ‘Judicial Review in Post-Communist Poland: The Emergence of a Rechtsstaat?’ Stanford Journal of International Law 31(1), 13–59. Chang, Wen-cheng. (2001), ‘Transition to democracy, constitutionalism and judicial activism: Taiwan in comparative constitutional perspective.’ Unpublished JSD dissertation. Yale Law School. Corder, H. (2006), ‘From Despair to Deference: Same Difference?,’ in Grant Huscroft and Michael Taggart (eds), Inside and Outside Canadian Administrative Law. Toronto, Canada: University of Toronto Press. Currie, David (1995), The Constitution of the Federal Republic of Germany. Chicago: University of Chicago Press. Dugard, Jackie (2014), ‘Urban basic services: rights, reality and resistance,’ in Malcolm Langford, et al. (eds), Socio-economic Rights in South Africa: Symbols or substance? Cambridge University Press, 275–309. Elster, Jon, Claus Offe, and Ulrich K. Preuss (1998), Institutional Design in Post-Communist Societies: Rebuilding the ship at sea. Cambridge, UK: Cambridge University Press. European Commission (1997), ‘Energy for the Future: Renewable Sources of Energy,’ White Paper for a Community Strategy and Action Plan: Communication from the Commission. COM (97) 599 final, Brussels, 26 November 1997. Ginsburg, Tom (2003), Judicial Review in New Democracies: Constitutional Courts in Asian Cases. Cambridge and New York: Cambridge University Press. Ginsburg, Tom, and Albert H.Y. Chen (eds) (2008), Administrative Law and Governance in Asia: Comparative Perspectives. London: Routledge. Haysom, N. and C. Plasket (1998) ‘The War Against Law: Judicial Activism and the Appellate Division.’ South African Journal on Human Rights 4, 303–33. Hoexter, Cora (2000), ‘The Future of Judicial Review in South African Administrative Law.’ South African Law Journal 117, 484–519. Huang, C.-Y. (2011), ‘Environmental Decision-making, Judicial Review and the Reasonableness of Administrative Action: Judicial Control of Discretionary Power in the Process of Environmental Impact Evaluation in Taiwan and the United States,’ in Cheng-Yi Huang (ed.) Administrative Regulation and Judicial Remedies. Taipei: Institutum Iurisprudentiae, Academia Sinica, 321–432. Huang, C.-Y., and D.S. Law (2016), ‘Proportionality Review of Administrative Action in Japan, Korea, Taiwan, and China,’ in Francesca Bignami and David Zaring (eds), Comparative Law and Regulation. Cheltenham, UK and Northampton, MA: Edward Elgar. Kleinschmidt, Horst, Shaheen Moolla, and Marius Diemont (2006), ‘A New Chapter in South African Fisheries Management.’ The Office of Marine and Coastal Management. Online access: http://www.mcm-deat.gov.za/ press/2006/commercial_fishing_rights_applications_2005.pdf. (last accessed February 22, 2009). Koncewicz, Tomasz Tadeusz (2016), ‘The Polish Constitutional Crisis and “Politics of Paranoia”.’ Verfassungsblog, March 11, http://verfassungsblog.de/the-polish-constitutional-crisis-and-politics-of-paranoia/. (last accessed 21 October 2016). Lindseth, P.L. (2004), ‘The Paradox of Parliamentary Supremacy: Delegation, Democracy, and Dictatorship in Germany and France, 1920s–1950s.’ Yale Law Journal 113(7), 1341–415. Nilsson, L.J., Marcin Pisarek, Jerzy Buriak, Anna Oniszk-Popławska, Pawł Bućko, Karin Ericsson, and Luckasz Jaworski (2006), ‘Energy Policy and the Role of Bioenergy in Poland.’ Energy Policy 34(15), 2263–78.  Oniszk-Popławska, A., M. Rogulska, and G. Wiśniewski (2003), ‘Renewable-energy Developments in Poland to 2020,’ Applied Energy 76, 101–10. Quinot, Geo, and Sandra Liebenberg (2011), ‘Narrowing the Band: Reasonableness Review in Administrative Justice and Socio-economic Rights Jurisprudence in South Africa.’ Stellenbosch Law Review 2011(3), 639–63. Rose-Ackerman, Susan (2005), From Elections to Democracy: Building Accountable Government in Hungary and Poland. New York: Cambridge University.

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496  Comparative administrative law Sledzinska-Simon, A. (2016), ‘Paradoxes of Constitutionalisation: Lessons from Poland.’ Verfassungsblog, March 30, http://verfassungsblog.de/paradoxes-of-constitutionalisation-lessons-from-poland/ (accessed 21 October 2016). Tate, C. Neal, and Torbjörn Vallinder (eds) (1996), The Global Expansion of Judicial Power. New York: New York University Press. Wohlgemuth, N, and G. Wojtkowska-Łodej (2003), ‘Policies for the Promotion of Renewable Energy in Poland.’ Applied Energy 76, 111–21.

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30.  Legal management of urban space in Japan and the role of the judiciary Narufumi Kadomatsu

1. INTRODUCTION In the early 2000s, Japan was engaged in a project of judicial reform. The Opinion of the Justice System Reform Council (June 12, 2001) proposed the re-examination of the administrative litigation system with the aim to reinforce the ‘judicial check function vis-à-vis the administration.’1 The basic idea behind this opinion was to ‘transform the excessive advance-control/adjustment type society to an after-the-fact review/remedy type society.’ Based upon this opinion, the Administrative Case Litigation Law2 in Japan underwent important amendments in 2004. The aim of this chapter is to examine the role of the judiciary in the context of urban space management in Japan, both in terms of how it actually operates, as well as possibilities for its reform. In section 2, I will examine the background rules in the legal management of urban space. I will show the understanding of property as a product of the ‘dual partition of the common space,’ which aims to solve the ‘tragedy of commons’ (2.1). However, the commons-like nature of space will nevertheless remain, which serves as the inherent limitation of solutions based on the creation of property rights. The problem of landscape protection is a typical example of such residual commons (2.2). On the other hand, actual land legislation in Japan is based on the idea of private property/public interest dichotomy and the ‘minimum intervention principle’ (2.3). In section 3, I will describe three development stages of city planning in Japan, namely the transformation from the ‘urbanizing society’ (3.1) to the ‘urbanized society’ (3.2) and finally in the context of ‘shrinking cities’ (3.3). In section 4, I will propose two models of legal governance of urban space: a ‘rightsbased model’ and a ‘consultation and coordination model.’ After showing the two models (4.1), I will show that the concept of judiciary in Japan is determined by the function of solving ‘legal disputes’ (4.2.1). After that I examine the content of the 2004 amendment of the Administrative Case Litigation Law, which was rather lukewarm but nonetheless had considerable impacts (4.2.2). However, in the context of city planning, these effects were limited by the perceived function of the judiciary (4.2.3). I try to find a hint for the future possible role of the judiciary that would contribute to the ‘consultation and co­ordination model’ (4.3)   http://japan.kantei.go.jp/policy/sihou/singikai/990612_e.html (accessed September 15, 2016).   Law No. 139 of May 16, 1962 (http://www.japaneselawtranslation.go.jp/law/detail/?id51922) (accessed September 15, 2016). The terminology in this chapter does not necessarily follow the above translation. 1 2

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498  Comparative administrative law Lastly, I will give a very short reflection on the role of the judiciary in the theoretical model of principal-agent relationship (5).

2. BACKGROUND RULES IN THE LEGAL MANAGEMENT OF URBAN SPACE 2.1  Dual Partition of the Common Space Any administrative activities related to urban space are done against the background of a web of entitlements. With the existence of multiple stakeholders surrounding a piece of urban space, the problem of allocation of ‘entitlements’ will inevitably occur. Needless to say, the ‘entitlement’ is not a product of nature, even if ‘the law’s entitlement granting rules seem . . . so sensible and natural that they are not a legal allocation at all’ (Sunstein 2005: 188). Rather, entitlements are man-made: ‘the fundamental thing that law does is to decide which of the conflicting parties will be entitled to prevail’ (Calabresi and Melamed 1972: 1090). Entitlement is therefore a consequence of a decision of the legal order. The law performs such allocation by ‘dual partition of the common space.’ Land is ultimately continuous, so it is not possible to possess it as one’s own unless it is artificially divided up. The law divides up the land horizontally into parcels, assigning each parcel a lot number and recording it in a registry, which makes it subject to ownership and transactions. This division logically precedes legal ownership. In addition, the law also establishes land ownership of underground property and air space above, hence dividing the space vertically. The Japanese Civil Code states in Article 207, ‘Ownership in land shall extend to above and below the surface of the land, subject to the restrictions prescribed by laws and regulations.’3 City planning regulations are conceived as a restriction of such ownership as a result of the partition, from the viewpoint of ‘public interests.’ The dichotomy of ‘rights vs. public interests’ has determined the lawyers’ perspective. This perspective is of course a product of legal history. In the case of Japan, this is determined by the reception of the civil law tradition of ‘absolute ownership’, especially that of late nineteenth century Germany. However, if we are to find consequentialist justification for this perspective, it is commonplace to mention ‘the tragedy of commons’ (Hardin 1968) or the internalization of externalities (Demsetz 1967: 354–6). The concept can be summarized as follows. There is a pasture open to all. Various herdsman let their cattle graze on this pasture and determine the number of cattle based upon their own costs and benefits. If a given herdsman puts more livestock on the pasture, the benefit will be exclusively attributed to the owner but the cost (deterioration of the pasture by overgrazing) is shared by all the herdsmen. Therefore, the only sensible course for each herdsman is to add more cattle on the pasture. As a result, too many cattle are turned loose, and no herdsman is able to maintain his own cattle, and no one ends up with their desired result. In order to avoid this tragedy,

3   Law No. 89 of April 27, 1896, http://www.japaneselawtranslation.go.jp/law/detail/?id52057, accessed 15 September 2016.

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Legal management of urban space in Japan  499 the common pasture will be divided into parcels and exclusive right of usage attributed to each herdsman. This is a commonplace justification of ownership rights. 2.2  The Inevitability of Residual Commons It is impossible, however, to completely carry through the above-mentioned ‘dual partition of the common space’ and internalize externalities as Hardin or Demsetz envisages. The commons-like nature of urban space will remain or will be rediscovered even after the partition. The nature of urban space as a ‘place’ of encounter can never be fully partitioned and individually owned as a private property, but remains to be placed in the relationships and networks among people. Another typical example of the residual commons is urban landscape. Although the source of good urban landscape is mostly privately owned buildings, the benefit of landscape is commonly enjoyed by various stakeholders in the region such as property holders or residents.4 While the benefit can be preserved if the use of space is appropriately controlled, it can also be easily destroyed by ‘short-sighted quest for profit’ by a few stakeholders (Ito 2006: 20). This commons-like understanding of urban space was clearly articulated in two district court judgments concerning a condominium conflict in a suburb of Tokyo—the Kunitachi condominium conflict (cf. Kadomatsu 2017a): Building owners or residents can enjoy the landscape only when they themselves strive to maintain its beauty. In addition, the landscape can easily be destroyed if any of the users does not observe the rules necessary for its maintenance. One can enjoy the interest in the landscape continuously only when all users of the space form a relationship in which they mutually maintain and respect the landscape. Landscape can be maintained only when all the users of the space observe its rules. It is highly dependent on a consciousness of community of the users of the space.5 There are cases in which the property-right holders establish certain standards on height, color or design for the buildings within the area and thus a certain landscape evolves. When not only the residents but also the society at large considers it to be a good landscape, it gives added value to the lot. Such added value of urban landscape is by its nature different from enjoyment of the natural landscape of mountains or coast, or from enjoyment of historical buildings which are preserved at a cost to their owners. It is the property-right holders who enjoy the added value of the landscape themselves that have brought forth the value by their continuous effort. It required their mutual understanding, solidarity and self-sacrifice. In order to maintain such added value, the above standards must be observed by all the property-right holders. Just one property-right holder can immediately destroy the uniformity of the landscape by a building that violates the standard and deprives other property-right holders of the above added value.6

4   There is a great diversity of stakeholders with a multi-layered interest structure concerning a good landscape, ranging from local residents and landowners to the tourists or the people in general. A district court decision about the interest in landscape shows this diversity. While it affirms the standing of local residents based on the interest in the landscape of a historical harbor, it emphasizes that the value of the harbor landscape is ‘a national asset’. Judgment of the Hiroshima District Court, October 1, 2009, 2060 Hanrei Jiho 3 (Tomonoura). 5   Judgment of the Tokyo District Court, December 4, 2001, 1791 Hanrei Jiho 3. 6   Judgment of the Tokyo District Court, December 18, 2002, 1829 Hanrei Jiho 36.

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500  Comparative administrative law The law has divided the common space into parcels as private property in order to avoid the ‘tragedy of commons.’ However, if we focus on the landscape aspect, the commonslike nature of the space will re-appear. The destruction of good landscape out of the quest for profit brings the ‘tragedy of commons’ back to the stage. 2.3 Private Property/Public Interest Dichotomy and the ‘Minimum Intervention Principle’ Needless to say, the law does not go so far as to assume that the ‘double partition of space’ is the final solution. The law always presupposes the possibility of the restriction of property right based on the ‘public interest.’ Such a private property/public interest dichotomy perspective, however, does not clearly capture the role of other stakeholders. The conundrum of residents’ standing to sue in environment-related administrative litigations shows the limitation of this dichotomy (Kadomatsu 2017a). In addition, ‘the minimum intervention principle’ underpins the whole practice of Japanese land legislation, although it is not a clearly stated constitutional principle. Abiding by this principle means restricting private property only where and insofar as it is necessary to overcome clear and present hindrances to the public interest (Kadomatsu 2006). Thus, there is no guarantee that the actual restriction on the property rights will fit the actual interest structure of diverse stakeholders.7 This point will be further elaborated in the next section, where I describe the actual development of City Planning in Japan.

3. THREE DEVELOPMENT STAGES OF CITY PLANNING IN JAPAN As in many industrialized countries, the task of city planning in Japan underwent three stages: ‘urbanizing society’ in the era of city expansion; ‘urbanized society’ in the era when restructuring of built-up areas became an important concern, and the current era of ‘shrinking cities’ when the strategic and smart shrink of urban area has become necessary in the era of population decrease.

7   One may also suggest a solution according to the Coase theorem (Coase 1960). Public interventions in order to cope with the problem of the externalities of land use may either focus upon a certain regional space such as zoning or neighborhood interest coordination or extend to a wider range of space such as the formation of national land structure or infrastructure development. As for the former, an efficient outcome may be attained as a result of bargaining regardless of initial distribution of property rights, provided that there is no transaction cost. However, there is inherent limitation of setting up ‘rights’ as objects of bargaining. To be sure, we can use private law schemes for the restriction of property, e.g., easement for the preservation of a good landscape. This may function when clear numerical standards such as height restriction serve as the tool for the preservation. However, when the good landscape depends upon more subtle factors such as historical features of the area, legal bargaining will not function well. On the other hand, if we could refine legal tools in order to enable more segmentation of legal entitlements that surround property, there is a risk that we will fall into the tragedy of the anti-commons in which heavy transaction costs will hinder effective use (Heller 1998).

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Legal management of urban space in Japan  501 3.1  City Planning Law 1968—The Law in the ‘Urbanizing Society’ The basic feature of the Japanese City Planning law enacted in 19688 was based on the idea of ‘urbanizing society’. The expansion pressure of urban areas was presupposed. The role of the City Planning Law was to control and guide such pressure so that the orderly development of the cities would be attained. The central concern was the avoidance of housing sprawl. On the one hand, this form of city planning restricted the expansion in certain areas (Shigaika Chosei Kuiki [Urbanization Control Areas]) by imposing regulation. On the other hand, it designated areas to be urbanized in the near future (Shigaika Kuiki [Urbanization Areas]) and established a project plan for the provision of necessary infrastructure (Kadomatsu 2006: 2). As said above, the urbanization pressure was presupposed and the creation of such pressure was not an issue for the city planning. It was left to private initiative governed by the market. The enactment of the 1968 law undoubtedly marked significant progress, which formed a classic structure of the Japanese city planning legal scheme. The legislation and its actual implementation, however, were strongly determined by the ‘minimum intervention principle.’ In the final stage of legislative process, the initial idea of drawing distinction between four types of areas was abandoned and the dichotomy of Urbanization Areas/ Urbanization Control Areas was adopted instead (Ishida 2004: 257–8). The 1968 law defined the Urbanization Area as ‘those areas where urban areas have already formed and those areas where urbanization should be implemented preferentially and in a wellplanned manner within approximately the next ten years.’9 Despite this, the actual designation of Urbanization Areas was far too large, without a realistic prospect of concrete projects or the necessary fiscal capacity. The amendment of the Building Standard Law in 1970,10 together with the 1968 law, set a system of land use zoning, which laid down ‘objective’ numerical standards for buildings without giving any discretion to building authorities (Kadomatsu 2006: 3–4). 3.2  The 1998/2000 Amendment—A Reaction to the ‘Urbanized Society’ As in many western European countries, the pressure for city expansion quieted down in the late 1990s. Urban land use policy shifted its focus from the orderly expansion of the urban areas to the improvement of the quality of living in already built-up areas. Calls for the improvement of ‘amenities’ or the attempts of people to deploy cities for the creation of ‘values’ began to attract policy attention. A report of an advisory body for the Ministry of Construction calls this situation a ‘transition from the urbanizing society to the urbanized society’ (Central Deliberative Council for City Planning 1997). In the ‘urbanizing society’ with the trend of one-way expansion of urban areas, a ‘bird’s-eye’ approach to regulation in the form of objective and numerical regulation did have a certain effectiveness. In the ‘urbanized society’, however, contextual regulations

  Law No. 100 of June 15, 1968.   City Planning Law, Art. 7 para.2. 10   Law No.201 of May 24, 1950.  8  9

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502  Comparative administrative law that ­correspond to individual situations gained importance. In 2004, the Landscape Law11 was enacted. The above-mentioned Kunitachi condominium conflict lawsuits, in which ‘the interest in landscape’ was the central issue, served as a stimulus for the enactment of the law. The regulations in the new law opened the possibility of making a breakthrough in the classical structure of Japanese city planning law. At the same time, local decentralization of city planning regulations proceeded (Kadomatsu 2006: 6–8). A number of competences were transferred from prefectures to municipalities. This decentralization is related to the above-mentioned shift of focus in city planning. Such undefined aims as ‘amenities’ or ‘activation of cities,’ which gained importance in the phase of ‘urbanized society’ were difficult to attain through ‘rationalcomprehensive process model of planning’ led by the central government experts (Cf. Healey 1993). The aims might better be realized by small regional authorities with help from active participation of the citizenry, which possessed ‘local knowledge’ and could claim to have ‘cognitive leadership’ (Kadomatsu 2001). 3.3  Late 2000s―Shrinking Cities Presently, Japanese city planning is faced with new tasks of shrinking cities as a result of population reduction. One of the most difficult tasks in this phase is that the pressure to shrink has not emerged spontaneously but rather must be created artificially. In addition, consultation and coordination among stakeholders has gained importance. While the classic housing sprawl has become less important with the decrease of expansion pressure, the spread of large commercial facilities such as shopping malls in the suburban areas, which became economically profitable as a result of motorization, continues to increase. This brings about changes in the city structure. The center-periphery structure of the cities has been supplanted. Suburban commercial facilities undertake the city-central functions while the classic center has hollowed out. The policy reaction to this trend was the slogan of ‘concentrated city structure.’ The 2006 amendment of the City Planning Law modified decentralization policy to a certain extent. Although the 1998 and 2000 amendments already introduced legal tools for the municipal governments to cope with the sprawl of commercial facilities—such as ‘Special Land Use Restriction Zone,’ and ‘Quasi City Planning Area’ (Kadomatsu 2006: 7–8)— this did not function well. Many suburban municipal governments did not dare to use such tools because they were attracted by the prospect of increased tax revenues and employment that the commercial facilities may bring. Without the active will to intervene, the economic incentive for the facilities created a fait accompli. In order to escape from this classic ‘prisoner’s dilemma’ situation, the 2006 amendment restricted building of large-scale (more than 10,000 square meters) to certain land-use areas. It also emphasized the prefectural governments’ power for large-scale coordination of municipal interests (Kadomatsu 2006: 11–12). This development teaches us a lesson. First, giving municipal governments the legal power for regulation may not function well when there is a conflict of interest between municipalities and there is not an effective scheme of interest coordination. Second, the 11

  Law No.110 of June 18, 2004.

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Legal management of urban space in Japan  503 local decision-making process, with citizen participation and deliberation, may have high democratic normative value. It may also have the potential to mobilize ‘­cognitive ­leadership.’ However, when the ‘default setting’ of the legal situation starts from the freedom to build, and the intentional active intervention of local governments that are required for regulation, economic incentives will continue to drive the trend towards suburban sprawl before any deliberative decision-making will be made. In 2008, the Ministry of Land, Infrastructure and Transportation began the attempt for a comprehensive reform of the City Planning Law. Slogans such as ‘eco-compact city’ or ‘smart shrink’ emerged in the interim report of a deliberative council in the Ministry (Council on Infrastructure Development 2009). However, actual legislation has not yet followed. Instead of the comprehensive reform of the City Planning Law, the Diet passed an amendment of the 2002 Law on Special Measures Concerning Urban Renewal12 in 2014 (Kadomatsu 2006: 8–10). The amendment introduced a scheme of Location Improvement Plan (Ricchi Tekiseika Keikaku) to be enacted by municipal governments. The plan designates ‘habitation-inducing districts’ in order to stimulate concentration of housing. Outside such districts, the notification to the mayor is required for the development of housing. The plan also designates ‘city-function-inducing districts.’ Outside such districts, the notification is also required for the construction of facilities that serve important city functions, such as medical facilities, welfare facilities and large commercial facilities. The scheme is regarded by the ministry to be ‘a higher level version of the municipal master plan.’13 In this era of ‘shrinking cities’, the ‘underuse’ of property becomes a serious problem. The symbolic symptom is the increase of vacant, abandoned housings,14 which has rapidly attracted social attention since the 2010s. The traditional city planning and building regulations cannot cope with this problem, because they focus on the prevention of ‘overuse.’ Apart from extreme situations, the trigger for the administrative intervention will generally be given only in the case of new building construction, or enlargement of buildings, and so on. Hence the law cannot effectively cope with the negative external­ ities created by vacant housings (danger of collapse, hygiene problems, deterioration of landscape, and so on). Many local governments enacted new ordinances to cope with this problem. The national government enacted new legislation in 2014.15 In addition to more active administrative intervention, the measures to facilitate circulation of existing housing are important. Moreover, the conversion of vacant housing into attractive spots for the development of a community has been attempted in various regions. There are several cases of conversion of traditional Japanese folk houses into Japanese inns.

  Law No.22 of April 5, 2002.   Ministry of Land, Infrastructure and Transportation, Ricchi Tekiseika Keikaku no Igi to Yakuwari (The significance and role of Location Improvement Plan) http://www.mlit.go.jp/en/ toshi/city_plan/compactcity_network2.html, accessed 15 September 2016. The scheme of municipal master plans without legal binding power already existed since 1992. 14   According to the estimate by the Bureau of Statistics of the Ministry of Internal Affairs and Communications, vacant housing units in Japan amount to 8,200,000 (13.5 percent of total housings) as of Oct.1, 2013. 15   Law on special measures for the promotion of countermeasures against vacant housing (Law No.127 of Nov. 27, 2014). 12 13

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504  Comparative administrative law These are the attempts to create new values based on the history and memories of the community.

4. TWO MODELS OF LEGAL MANAGEMENT OF URBAN SPACE—‘RIGHTS-BASED MODEL’ AND ‘CONSULTATION AND COORDINATION MODEL’ 4.1  Two Models Admitting that they are still under-development, I would like to propose here two models of the legal management of urban space: a ‘rights-based model’ and ‘consultation and coordination model’ to understand the historical and legal developments I traced above in section 3. The former model divides the common space and gives each stakeholder exclusive rights to use the space (in principle at will). This model is de-centralized in the sense that the rights are distributed among a variety of stakeholders, but on the other hand, within each divided parcel, the power to decide upon its usage is centralized in the property holder. The latter model seeks to develop a certain legal scheme that will facilitate consult­ ation and coordination among stakeholders. Needless to say, these two models are not mutually exclusive. One of the aims of the division of space based upon the idea of the Tragedy of Commons or the Coase Theorem (see 2.1.) was to establish rights with a clear boundary that will fit as objects of transaction, so that negotiations among right-holders will be possible. However, we can still distinguish different features of the models. Based upon this view, the above-described development of Japanese city planning legal schemes can be summarized as follows. In the ‘urbanizing society’ period, the law attempted to regulate urban expansion with a ‘rights-based model.’ However this form of land use law could not fully function because of the ‘minimal intervention principle’ that determined the actual land legislation. The operation of the legal scheme failed to develop adequate rights allocation to fit the actual interest of diverse stakeholders. With the transition to the ‘urbanized society’ and the ‘shrinking cities,’ the importance of the ‘consultation and coordination model’ is increasing. As shown (3.2.), in the phase of the ‘urbanized society’, the attainment of undefined values such as amenities is impossible without participation of residents who can deliberate together over their diverse knowledge and values. The situation in the phase of shrinking cities requires some more explanation. In this era, the demand for the use of space has decreased. In some areas, the problem of ‘­underuse’ has become acute (3.3). On one hand, the clarification of rights will be useful to facilitate market transactions. On the other hand, resident participation and coordination of their interests is essential for the revitalization of the region, because creation of new values will be effective when it is based upon the history and memory of the place.

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Legal management of urban space in Japan  505 4.2 Strengthening ‘the Judicial Check Function vis-à-vis the Administration’: How does it Function? As stated in the Introduction, the opinion of the Justice System Reform Council proposed the re-examination of the administrative litigation system with the aim to reinforce the ‘judicial check function vis-à-vis the administration.’ Based upon the opinion, the Diet amended the Administrative Case Litigation Law in 2004. The content of the amendment was rather lukewarm, but it did have considerable effects. 4.2.1  The ‘legal dispute’ as the role-model of the judiciary Under the present Constitution, Japan maintains a unitary court system which functions under the Supreme Court. The administrative litigation in Japan is conducted by ordinary courts and not by special administrative courts. There exists a special law governing administrative adjudication, the Administrative Case Litigation Law (ACLL).16 However, it is not a self-contained codified set of procedural rules for administrative litigation and the Civil Procedure Code is applied mutatis mutandis for matters not provided in the law. The relationship between administrative litigations and civil litigations is still disputed (Kadomatsu 2009: 145–6). The understanding over the role of judiciary in administrative litigations is strongly determined by the concept of the ‘legal dispute’ (Kadomatsu 2017b). Article 3 of the Court Law provides that the courts have the power to ‘decide all legal disputes, and have such other powers as are specifically provided for by law.’ The Supreme Court defines the concept as disputes ‘that relate to the existence of concrete rights and duties or legal relations between parties’ and ‘that can be finally settled by the application of law.’17 The concept serves as a limitation upon when and by whom a judicial remedy may be invoked. It functions as a gate-keeper. Like in the United States, competence over ‘legal disputes’ is commonly understood to be identical to ‘judicial power’ in the Constitution.18 This understanding of the role of the judiciary is reflected in the limitation of access to administrative litigation under the ACLL. In regulating the ‘complaint litigation’ as the central category of the administrative litigation,19 the law provides two gate-keeping ­limitations: The ‘administrative disposition’ concept as an objective limitation of the subject matter to be handled by the judiciary, and standing to sue as a subjective limitation concerning the eligibility as the plaintiff to challenge the administrative disposition at issue.   Supra note 2.   Judgment of the Supreme Court, Apr. 7 1981, 35 Minshu 1369. 18   Constitution of Japan. Article 76 para 1 stipulates: ‘All judicial power is vested in a Supreme Court and in such inferior courts as are established by law.’ However, if we equate ‘judicial power’ with ‘power over legal disputes,’ it is a difficult question to explain the constitutional nature of the power of the court in ‘other powers as are specifically provided for by law’ (Court Law Art.3). 19   The Administrative Case Litigation Law stipulates four categories of litigation: (1) Complaint (Kokoku) Litigation (judicial review of administrative disposition) (Art.3); (2) Inter-party (Tojisha) Litigation (litigation relating to a legal relationship under public law); (3) Citizen Litigation (litigation based on his/her status that is irrelevant to his/her legal interest); and (4) Inter-agency Litigation (litigation relating to a dispute between agencies of the State and/or a public entity). The first two categories are understood to be ‘legal disputes,’ and the latter two are understood to be ‘other powers as are specifically provided for by law’ (Court Law, Art.3). 16 17

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506  Comparative administrative law The concept of the ‘administrative disposition’ is derived from the traditional German concept of ‘Verwaltungsakt’ (administrative act). According to the Supreme Court, the concept does not include ‘all administrative activities, but is limited to those administrative activities that have direct and particular legal effects on the rights and duties of individuals.’20 The ACLL adopts this concept in defining the ‘complaint litigation’ as a suit against the ‘exercise of public authority’ (Art.3). The other gate-keeping limitation—standing to sue—restricts ‘who’ can invoke the intervention of the judiciary in Complaint Litigation. The ACLL only stipulates that the plaintiff must have a ‘legal interest’ (Art.9) to be admitted to have standing. In determining this ‘legal interest,’ the Supreme Court focuses on the legal ground of the respective administrative disposition and requires that: (i) the subjective interests of the plaintiff should be ‘damaged’ by the disposition; (ii) such subjective interests should fall under the ‘protected realm’ of statutory law, which serves as the legal basis for the disposition; and, (iii) such subjective interests at stake must be ‘specific interests’ of the plaintiff and not entirely absorbed by the ‘public interest’ (Kobayakawa 1998). In sum, the first gate-keeping limitation, ‘administrative disposition’ functions as the regulation of the timing of the judicial remedy. A judicial intervention may be invoked only when the ‘right’ of someone is infringed by administrative activities. The second gate-keeping limitation, standing to sue, defines the stakeholders concerning a certain administrative activity. Here, infringement of ‘rights’ of the plaintiff is not an absolute requirement. Non-addressee (third parties) of the administrative ­disposition may have standing to sue, despite the fact that their ‘rights’ are not infringed in a strict sense. However, they cannot control the timing of judicial intervention. They must b ­ asically wait until the addressee’s right has been affected by the administrative disposition. 4.2.2  Lukewarm amendment, but considerable effects At least concerning the above two ‘gate-keepers’ for access to the administrative litigation, the 2004 amendment of the ACLL was rather conservative. It did not touch upon Article 3, which incorporated the ‘administrative disposition’ concept.21 The amendment did not change the definition of ‘standing to sue’ as ‘legal interest.’ It only stipulated ‘factors to be considered’ in judging standing according to the newly added paragraph 2 of Article 9. Actually, the paragraph was nothing but a codification of the existing Supreme Court case law (Kadomatsu 2009: 156). Ironically, these amendments, which had been criticized by scholars as too lukewarm, did bring about considerable changes in the attitude of the courts. As said, the ‘administrative disposition’ concept was not changed in the amendment, but the Supreme Court began to issue several judgments that relaxed this requirement in the early 2000s, shortly before the 2004 amendment. It did not change the general interpretative framework but began to try more flexible applications (Kadomatsu 2009: 156; Kadomatsu 2017b).

  Judgment of the Supreme Court, Oct. 29 1964, 18 Minshu 1809.   Instead of touching upon the issue of the subject matter of the complaint litigation, the amendment suggested a more active use of another type of administrative litigation, namely the inter-party litigation stipulated in Art. 4. (Kadomatsu 2009: 155–6). 20 21

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Legal management of urban space in Japan  507 Traditionally, the courts have denied the status of ‘administrative disposition’ to city planning decisions, as well as regulatory city planning decisions such as zoning22 and project city planning decisions such as decisions concerning land readjustment projects.23 The basic idea behind the denial was that planning decisions do not directly influence the rights of land and building owners at this stage. However, a Supreme Court judgment in 2008 expressly altered its legal precedent with regard to land readjustment and affirmed the administrative disposition character of the project plan.24 On the issue of standing to sue, the Supreme Court gave a landmark judgment in 2005 (Odakyu Judgment),25 which expressly overturned its judicial precedent and admitted standing to sue of a neighborhood resident in a complaint litigation against a city planning project by the Tokyo Metropolitan Government. This planning project included enlargement of railways by a private company. It is noteworthy, although not altogether peculiar to Japan,26 that a codification of the administrative case law paved the way for the overturning of a judicial precedent (Kadomatsu 2017b). In addition to relaxing of the ‘gate-keeper’ functions, we can observe several interesting court decisions regarding city-planning activities. Let me cite just one example. A Tokyo High Court judgment in 2005 found a city planning decision concerning the widening of a road to be illegal.27 According to the judgment, the prospect of increase in future traffic volume, which served as the basis of city planning, lacked reasonableness because the prospect uses the method of calculating future population based on the ‘remaining capacity’ of respective areas. The court thus rendered a hard look review on the existence of ‘critical factual basis.’28 In sum, the courts seem to have not only accepted the express mandate given by the legislator through the 2004 amendment, but also its general message for more effective relief and protection of rights and interests of citizens (Kadomatsu 2009: 159).

  Judgment of the Supreme Court, April 22 1982, 36-4 Minshu 705.   Judgment of the Supreme Court, Feb.23 1966, 20-2 Minshu 271. Land readjustment projects, which are sometimes called ‘the mother of city planning’ are one of the most important tools in Japanese city planning. 24   Judgment of the Supreme Court, Sep.10 2008, 62-8 Minshu 2029. 25  59-10 Minshu 2645. 26   A comparison with Universal Camera Corp v. NLRB, 340 U.S. 474 (1951) may be interesting. Although the U.S. Administrative Procedure Act of 1946 mostly codified existing administrative procedures and standards of judicial review, the judgment derived from the legislative history that the Congress ‘expressed a mood’ of dissatisfaction with the deferential posture of review. It led the Court to heighten its scrutiny of administrative adjudications under the already existing ­‘substantial evidence’ standard. In the Japanese context, it is debatable whether the Diet had expressed such a ‘mood,’ although such a mood could be seen during the discussion in the Judicial Reform Commission (Blake Emerson brought me this point. I also want to thank Takehisa Nakagawa (Kobe University) for his suggestion). 27   Judgment of the Tokyo High Court, Oct. 20 2005, 1914 Hanrei Jiho 43. This case does not have any relevance to the relaxing of the gate-keeping limitations, because the plaintiff was a landowner whose land might in future be expropriated for the road, who will clearly be admitted standing to sue even before the 2004 amendment of the ACLL (Kadomatsu 2017b). 28   Another example of stricter review can be found in Supreme Court Judgment, Sep.4 2006, 1948 Hanrei Jiho 26 (Rinshi no Mori), in which a city planning project for the enlargement of a city park was in question. 22 23

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508  Comparative administrative law 4.2.3  The judiciary and the ‘rights-based model’ in the context of city planning So far I have confirmed that the Japanese judiciary is slowly strengthening the prospects for intervention in administrative activities in the wake of the 2004 amendment of the Administrative Case Litigation Law. Two gate-keeper functions—‘administrative ­disposition’ and ‘standing to sue’—have been somewhat relaxed. We can also find several court decisions that review legality of city planning more stringently. At the same time, we can observe that this expansion trend is still based on the ‘rightsbased model.’ The role model of the judiciary continues to be determined by the concept of ‘legal dispute.’ As noted above, the Supreme Court has not changed its interpretative framework regarding either administrative disposition of standing. For example, what does the above 2008 Supreme Court judgment that affirmed administrative disposition character of land readjustment project plan mean? It means that the property right-holders can more effectively defend their rights, in that they can file a suit at an earlier time than the rule of the former legal precedent, before a fait accompli of urban development transpires. Of course, this is progress. However, note that the judiciary is a second-order organ that monitors and guarantees the functioning of the first-order legal system (statutory law) created by the legislator. If the first-order legal system is based upon the ‘minimum intervention principle,’ (see 2.3) the more effective judicial remedy would mean that the principle will be more effectively carried through. On the other hand, expanding ‘standing to sue’ might function slightly different. By interpreting the law that serves as the basis of the administrative activities, the court may acknowledge the existence of a ‘legally protected interest,’ not only for the property holders but also for other stakeholders of the urban space. Those stakeholders may be able to invoke the judiciary to judge upon the legality of the expected transformation of the urban space. Here the judiciary may depart to some extent from the ‘right-based model’ and consider a wider array of affected interests. However, there are still limits. First, even when such stakeholders succeed in invoking the judiciary, the issue will move forward to the substantial legality of the relevant administrative activities. Here again, when the statutory law is governed by the minimum intervention principle, it does not change the situation. More importantly, as said above (4.2.1), those stakeholders that are admitted of standing cannot control the timing of judicial intervention. The existence of an ‘administrative disposition’ is a prerequisite before going into the questions of standing. In deciding whether or not an ‘administrative disposition’ has been issued, those stakeholders’ interests cannot play any role. The timing of judicial intervention is determined by when the ‘legal effects on the rights and duties’ (definition of the ‘administrative disposition’) of the property holders―not the ‘legally protected interests’ of the stakeholders― are affected by administrative activities.29 Lastly, I have said that there are interesting court decisions which reinforced judicial 29   In 2006 and 2009, a research institution (Toshikeikaku Kyokai, City Planning Association of Japan) that is affiliated w ­ ith the Ministry of Land, Transportation and Infrastructure, issued two reports with legislative proposals that were not realized. The reports proposed a special system of remedy (either administrative or judicial) that challenges the legality of city planning decisions in general, without considering whether a decision has ‘administrative disposition’ character. In these

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Legal management of urban space in Japan  509 review against city planning decisions. It should be noted, however, that they are all about project-type city planning decisions, including plans for improvement of urban facilities such as railways, roads, and city parks, as well as a plan for urban development projects such as land readjustment. The judiciary has not found an effective tool to review the legality of regulation-type city planning decisions, including plans that restrict land use such as zoning regulations or district planning. 4.3  Possibility of Judiciary Contributing to ‘Consultation and Coordination Model’? I have confirmed above that the present legal governance of urban space is determined by the ‘rights-based model’, which is not ideal in the ages of urbanized society or shrinking cities. I have also suggested that the on-going strengthening of judicial intervention is again determined by the ‘rights-based model.’ Is there a possibility, then, that  the judicial intervention may contribute to the ‘consultation and c­oordination model’? The ‘consultation and coordination model’ aims at a legal scheme that will facilitate consultation and coordination among stakeholders. The primary task of constructing and implementing such a legal system belongs to the legislator and the administration. The judiciary primarily assumes the second-order role of guaranteeing proper enforcement of the system. In addition, however, there may be a chance for the judiciary to function as a stimulus or ‘trigger’ for the coordination. A judgment of the Hiroshima District Court in 2009 (Tomonoura) may hint at such a possibility.30 In this case, Fukuyama City and Hiroshima Prefecture jointly planned a reclamation project in a historic, beautiful harbor in order to build a bridge. The issue in question was the legality of the reclamation license, which is an administrative disposition.31 The plaintiffs argued that the reclamation and the bridge would destroy the historic landscape. The court affirmed the contention of the plaintiffs and ordered ex-ante injunction of the license.32 The defendant—the prefectural governor—appealed to the high court. However, at the same time, the governor established a consultation forum of the residents in the area and organized discussions. After discussions in 19 sessions of the forum over about two years, the governor announced that the prefecture had given up the reclamation project in June 2012.33 The Hiroshima District Court judgment focused on the ‘lack of research and ­consideration’ on the side of administration when it declared the license to be illegal. The reports, the problem of relationship between timing of the remedy and timing of the actual transformation of the urban space are given focus. 30   Judgment of the Hiroshima District Court, Oct.1 2009, 2060 Hanrei Jiho 3. 31   Therefore, technically it is not a city planning case. 32   This type of ‘injunction litigation’ was a newly introduced type of complaint litigation in the 2004 amendment. While the former law only provided ex-post remedy against administrative dispositions such as revocation litigation, the amendment opened the (limited) possibility of injunction litigation and mandamus litigation. 33   However, it still took a long time to get consent of the Fukuyama City and the residents who supported the project. The prefecture finally retracted the application for the reclamation in February 2016.

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510  Comparative administrative law court, so to say, ‘threw the ball back’ to the administrative process. In other words, the ‘feedback function’ of the judicial process was realized in this case. In my view, this feedback was possible because the judgment of illegality was based on the court’s finding that there was an error in the decision-making process,34 namely the lack of research.35 This judicial finding made the above consensus-building attempt possible. It is difficult to determine which aspects of the judicial process facilitate this feedback function.36 It is nevertheless important to think about the future role model of the judiciary that serves as a trigger and stimulus for the facilitation of consultation and coordination of the stakeholders.

5. REFLECTIONS: ON MONITORING ACTIVITIES OF THE JUDICIARY IN THE PRINCIPAL-AGENT RELATIONSHIP We have so far examined a question of legal governance of urban space from a normative perspective. However, can this analysis contribute to a more descriptive question of the role of judiciary, namely about its role in the principal-agent relationship? Several authors propose a theory of judicial review from a perspective of principalagent relationship. For example, Tom Ginsburg understands the raison d’être of the constitutional courts as an insurance for the constitutional drafters who face the risk of losing power in the future (Ginsberg 2003). He also understands the nature of administrative law as a system of ‘meta-regulation’ (Ginsburg 2005: 326). The judiciary can serve as a monitoring tool that solves the information asymmetry between the principal (­ legislator) and the agents (bureaucrats). The above-mentioned proposal of the Judicial Reform Commission for a more effective ‘judicial check vis-à-vis administration’ is based on the

34   As noted, the litigation was an example of newly introduced injunction litigation, but in my view, this was not the factor that made the feedback function possible. Since the injunction litigation is an ex-ante litigation, it is usually not possible to determine that there was a ‘lack of research and consideration’ in the administrative process (the administrative process has not yet finished!). Certain exceptional situations in the Tomonoura case have made it possible, but this is not the usual case. The judgment of ‘lack of research and consideration’ is more fit for revocation litigations, the standard ex-post complaint litigation. 35  The Tomonoura judgment itself does not deal with consultation and coordination process, but with the lack of research. 36   The judicial function of ‘shedding light on neglected values and interests’ may be one of such factors. In some court cases, the judicial process functioned to re-activate values and interests that were (and often are) neglected in the administrative decision-making process. In that way, such values and interests rise to the surface and can be evaluated by a neutral third party. See, for example, Nikko Taro Sugi Judgment (Judgment of the Tokyo High Court, July 13, 1973, 24-6/7 Gyosaireishu 533), which stopped the land expropriation for the expansion of a national road which might destroy an historically important cedar tree, and Nibutani Dam Judgment (Judgment of the Sapporo District Court, Mar. 27,1997, 1598 Hanrei Jiho 33), which declared that land expropri­ ation for a large dam project was illegal because it would destroy ‘sacred sites’ of Japan’s indigenous Ainu people interests. For an English translation, see Kayano et al. v. Hokkaido Expropriation Committee: ‘The Nibutani Dam Decision,’ Mark A. Levin (trans.), in International Legal Materials 38, p. 394 (1999), http://ssrn.com/abstract51635447, accessed 15 September 2016. For details, see Kadomatsu 2017b.

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Legal management of urban space in Japan  511 recognition of the malfunctioning of such monitoring and a hope for more effective form of judicial review. In such analysis of judicial monitoring of the principal-agent relationship, it is import­ ant to think about the contexts and structural constraints of the judiciary. The monitoring tool cannot always check whether the agents’ activities accurately reflect the principal’s interest, only in limited scenarios and only with the limited indicators. In the context of Japanese law, this is highly determined by the self-understanding of the judiciary. First, as noted, the Japanese judiciary limits its function to solving ‘legal disputes.’ Therefore, the situations when it can be invoked will always be limited. We have seen that the rights-based model of the judiciary has its limits in performing effective governance of contemporary urban space. Second, the indicator that can be used in the monitoring is limited to the ‘question of law.’ For the city planning decisions concerning city facilities, the Japanese Supreme Court grants ‘broad discretion to the administrative agency’ because ‘when deciding the sizes and locations of city facilities under such standards, it is absolutely necessary to make determination from policy and technical perspectives while comprehensively considering various circumstances concerning the city facilities.’37 To be sure, such discretionary decisions can also be controlled by the judiciary. Courts may declare an administrative decision illegal when the decision ‘lacks a critical factual basis due to errors in fact-­finding’ or when the agency ‘has not taken into consideration the matters that should have been considered in making determination.’38 Using this formula, some project-type city planning decisions were declared or suggested to be illegal.39 However, what comprises ‘critical factual basis’ or ‘matters to be considered’ must be in principle derived from the statutory law, which often uses vague concepts. The concretization of indicators is a difficult task for the judiciary. Concerning regulation-type city planning decisions such as zoning, the judicial control may be even more difficult. While there is no significant Supreme Court judgment about the legality of this type of planning, we may assume the court will also grant administrative discretion here. Moreover, since such regulation-type city planning decisions require an even wider range of interest coordination, judicial control using ‘critical factual basis’ or ‘matters to be considered’ standards is more difficult. Third, judiciary as a monitoring tool is basically not effective in monitoring against the ‘inaction’ of administrative activities. It may produce a natural bias for the administrators to prefer inaction so that their actions will not be declared illegal in courts. This may be good if we take a standpoint of ‘minimal intervention principle’, but not necessarily so if we are to aim at a new model of urban governance that is fit for the phases of urbanized society and shrinking cities.

37   Judgment of the Supreme Court, Nov.2 2006, 60-9 Minshu 3249, English translation available at http://www.courts.go.jp/app/hanrei_en/detail?id5863, accessed 25 September 2016. 38  Ibid. 39   Judgment of the Tokyo High Court, Oct. 20 2005, 1914 Hanrei Jiho 43 (n.29) (critical factual basis); Supreme Court Judgment, Sep.4 2006, 1948 Hanrei Jiho 26 (n.30) (matters to be considered).

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512  Comparative administrative law

ACKNOWLEDGMENT This work was supported by JSPS KAKENHI Grant Numbers JP15H03290, JP26301008. The main part of its content is based upon the author’s paper in Japanese. (“Toshi Kukan no Hoteki Gabanansu to Shiho no Yakuwari” [Legal Governance of Urban Space and the Role of the Judiciary] in Kadomatsu et al. (eds), Gendai Kokka to Shiminshakai no Kouzou Tenkan to Ho (Structural Transformation of Contemporary States and Civil Society and the Law), Nihon Hyoronsha 2016. The author would like to thank the editors for precious suggestions and great editing work.

REFERENCES Calabresi, G. and A.D. Melamed (1972), ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral,’ Harvard Law Review 85(6), 1089–128. Central Deliberative Council for City Planning, The (1997), Kongo no Toshiseisaku no Arikata ni Tsuite [On the future of urban policies]. Coase, R.H. (1960), ‘The Problem of Social Cost,’ Journal of Law and Economics 3(1), 1–44. Council on Infrastructure Development, City Planning and Historical Landscape Preservation Panel, (June 26, 2009) Interim Report. Demsetz, H. (1967), ‘Toward a Theory of Property Rights,’ The American Economic Review 57(2), 347–59. Ginsburg, T.B. (2003), Judicial Review in New Democracies, New York: Cambridge University Press. Ginsburg, T.B. (2005), ‘The Regulation of Regulation: Judicialization, Convergence, Divergence in Administrative Law,’ in Klaus J. Hopt et al. (eds), Corporate Governance in Context: Corporations, States, and Markets in Europe, Japan, and the U.S., Oxford: Oxford University Press, 321–37. Hardin, G. (1968), ‘The Tragedy of the Commons,’ Science 162, 1243–8. Healey, P. (1993), ‘Planning through Debate. The Communicative Turn in Planning Theory,’ in Frank Fischer and John Forester (eds), The Argumentative Turn in Policy Analysis and Planning, Durham and London: Duke University Press, 233–53. Heller, M.A. (1998), ‘The Tragedy of the Anticommons: Property in the Transition from Marx to Markets,’ Harvard Law Review 111(3), 621–88. Ishida, Yorifusa (2004), Nihon Kingendai Toshikeikaku no Tenkai 1868-2003 [The development of modern and contemporary city planning in Japan 1868-2003], Tokyo: Jichitai Kenkyusha. Ito, Shuichiro (2006), Jichitai Hatsu no Seisaku Kakushin (Policy Innovation Originating from Local Governments), Tokyo: Bokutakusha. Kadomatsu, N. (2001). Jichi Rippo ni Yoru Tochi Riyo Kisei no Saikento [Reflections on land use regulation through legislations of local autonomies]’, in Sumitaka Harada (ed.), Nihon no Toshiho Vol. 2, 321–50. Kadomatsu, N. (2006), ‘Recent Development of Decentralization, Deregulation and Citizens’ Participation in Japanese City Planning Law,’ Kobe University Law Review 40, 1–16. Kadomatsu, N. (2009) ‘Judicial Governance Through Resolution of Legal Disputes?—A Japanese Perspective’, National Taiwan University Law Review 4(2), 141–62. Kadomatsu, N. (2017a), ‘A Misinterpretation or a Productive Diversion?―The Rise and Fall of the Relationship of “Reciprocal Interchangeability” Concept and the Possibility of Reception of a Legal Interpretation,’ in Russell L. Weaver et al. (eds), Comparative Perspectives on Administrative Procedure, The Global Papers Series, Volume III, Durham, N.C.: Carolina Academic Press, 105–28. Kadomatsu, N. (2017b) ‘Taking “Regulatory Courts” Seriously—A Perspective from Japanese City Planning Law,’ in Russell L. Weaver et al. (eds), Comparative Perspectives on Administrative Procedure, The Global Papers Series, Volume III, Durham N.C.: Carolina Academic Press, 213–30. Kobayakawa, M. (1998). Kokokusosho To Horitsujo No Rieki—Oboegaki [Memorandum on legal interests in complaint litigations], in Mitsuo Kobayakawa, Tokiyasu Fujita, Tsuyoshi Nishitani, Tsutomu Isobe, and Mitsuaki Usui,  (eds), Seisaku Jitsugen To Gyoseiho [Achieving policy aims and administrative law], Tokyo: Yuhikaku, 43–55. Sunstein, C. (2005), Laws of Fear: Beyond the Precautionary Principle, New York: Cambridge University Press.

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31.  The courts and public space: France, the UK and the US in historical perspective Thomas Perroud

This chapter considers the historical development of the law of public space in the United States, France, and the UK.1 But what does ‘public space’ mean? In both US and French law, judges define these spaces as ‘affected with a general or public interest.’ More specifically in France, the Conseil d’Etat defines these spaces as ‘affected to the public’s use,’ in other words they are for the public to use and conduct their lawful activities in. They can also be defined by the specific legal regime that applies: public space is property from which persons may not generally be excluded. For the purpose of my comparison, public spaces are open to any members of the public: be they streets, parks, public squares and sidewalks in the city, or the shores of the seas and lakes, as well as natural sites. In all three countries public spaces enjoy special status and privilege, and the administration is not free to manage them as it chooses. The rights of the public are of prime importance for political (assemblies) or commercial purposes, or simply for leisure. They cannot, or should not, be considered private properties. Ideally, the owner (the city, or the government) should not exclude members of the public, discriminate, or even sell to them. Here comes the difficulty. Although the public spaces are open to everyone, legally, they are, very often, government-owned. In other words, the administration enjoys managerial and proprietary powers that could conflict with their publicness. The most obvious threat occurs when a public body wants to sell, rent, or charge admission to these spaces. Furthermore, if entry is open and free, the public spaces may become congested, and users may compete with each other, for example, in holding demonstrations, meetings, parties, and festivals. Some members of the public may object to the behavior of other members of the public. Two difficulties stand in the way of this research: the words used and the scope of administrative law scholarship in the three countries. First, some key words may create confusion. We had to choose between different concepts: public property, public space, public sphere, commons, biens publics, or public sphere. We hesitated between public property and public space. Public property is probably the most accurate, legally speaking. However, this expression can be misleading or raise questions, as these spaces are not always formally the property of the State. Property rights often include the right to exclude, and here, this right is severely curtailed. Also, as we will explain later, the expression ‘public property’ is very well known in French administrative law but not in US or UK law. ‘Public space’ seems the best compromise, because it is not a legal notion in any legal system, and in both languages it clearly d ­ esignates the 1   I use the term ‘UK’ as a general word for the legal system created by the Acts of Union in 1800. The term ‘England’ refers to the case-law of that specific part of the country when the UK did not exist.

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514  Comparative administrative law places of interest, and it is probably the concept that is best understood in French and English. Hence, in all three countries my interest is in public spaces where the government owner enjoys some proprietary and managerial prerogatives. The word ‘commons’ captures part of my meaning. The word is used in the common law world but has completely fallen into disuse in France (although a boom of current research on the topic may revive the notion). The phrase ‘public domain’, mostly used in France, could also have been chosen. The US Supreme Court has used that term,2 but it is rarely used in the UK. Biens publics, in French captures the right meaning in French, but the translation into ‘public goods’ does not express what we want to study. Alternatively, Habermas popularized the term ‘public sphere’ (Habermas 1989 [1962]) and countless studies have been built on his work, but the notion is not precise enough for my purposes and could lead to a misunderstanding of the chapter’s scope. The second difficulty lies in the different coverage of French, UK and US administrative law. They do not have the same scope, and the topic of public space is much more central to French public law than to public law in the UK and the US. At first sight, the topic may seem only a French concern for the purpose of a comparative administrative law handbook. Public space and public property are secondary issues in administrative law scholarship in the common law world. In contrast, government takings of private property and land use law are important topics in their own right in both countries. Why are these topics not central to administrative law? Before going further into the research, some methodological remarks are necessary. Administrative law textbooks in the US are mainly concerned with three broad topics: agencies, administrative procedures, and judicial review, and they focus on the federal level. State and local governments are the prime regulators of land in urban and suburban areas. Hence, land use in settled areas seldom comes before the federal courts apart from constitutional cases dealing with the taking of private property for public use. Strikingly, however, the federal government of the US possesses much more land, both absolutely and relatively, than either France or the UK. The federal government owns 30 percent of US territory, and article 4, section 3, clause 2 of the Constitution regulates the power of Congress over such properties (Merrill 2014). The federal administration, as an owner, enjoys broad powers, and one can assume that it has an obligation to use them for the benefit of the public at large. However, the study of public properties in the US is a marginal concern of administrative law courses, and it is not always studied in courses on property law. The introductory property law course in common law countries is private law; and it is about the private relationship of an individual to his or her belongings. Carol Rose explains that the ideology of the common law may blind scholars to the importance of public properties: ‘Since the advent of eighteenth-century classical economics, it has been widely believed that the whole world is best managed when divided among private owners’ (Rose 1986, 712). The world being only one of private properties, public property can only be a ‘conundrum’ and even an ‘oxymoron’ (ibid.). Furthermore, in his famous article ‘The Tragedy of the Commons’ Hardin (1968) discredited public ownership as leading to waste and overuse: ‘Freedom in a commons brings ruin to all.’ According to Carol Rose, two lines of thinking helped to undermine the importance of 2

  Camfield v. United States 167 U.S. 518 (1897) or Kleppe v. New Mexico 426 U.S. 529 (1976).

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The courts and public space  515 public properties: the common law ideology going back to Blackstone, and a certain kind of economics, of which Hardin is a good example. One could also mention the likely role of what C.B. Macpherson has called possessive individualism that, from Hobbes to Locke, discredited common properties, society being presented as a collection of individual owners (Macpherson 1962). Men, according to these philosophers, are owners of their own person and capacity ‘owing nothing to society for them’ and, consequently, ‘Society becomes a lot of free equal individuals related to each other as proprietors of their own capacities and of what they have acquired by their exercise. Society consists of exchange between proprietors.’ In this society, there is no place for public property, and this may explain the failure to link together administrative law and the law of public property in the common law world. In sum, the law dealing with urban public properties in US law is taught in specialized courses in land use where most of the applicable law is state and local, not federal law, and they are seldom a focus of administrative or property law. Also, strong ideological reasons (the common law, neoclassical economics and political theories) pleaded against the legitimacy of such properties. The background legal norm is private ownership and the right to exclude so that violations of that right are exceptions that override that norm in the interest of such constitutional rights as free speech and the Fifth Amendment requiring takings only for ‘public use’ and with just compensation. In the United Kingdom also and for the same ideological reasons, public properties are not part of administrative law. Administrative law in the UK is, however, broader in scope than in the US. Administrative contracts, liability in tort are part of the curriculum, but property is absent. However, public properties are not absent from property law textbooks (Gray and Gray 2009). However, another factor may explain the UK law on public property: the lack of a clear theory of the State (McLean 2015). French administrative law is very different from its two counterparts. Public property law is a major topic of administrative law scholarship. Among public properties, the public domain (a phrase that is also used in English to designate those spaces that are open to the public) is of major importance. The Conseil d’Etat in the 19th century created an administrative law that completely mirrored private law, it ‘publicized’ private law concepts. Hence, there is a law of public contracts, of public properties, of civil service, in addition to the traditional study of judicial review, the administration, and the decisionmaking process. In other words, the Conseil d’Etat has brought public values into the legal analysis of public bodies as owners or contractors. The law of public properties seems, therefore, to be a hard topic to study, let alone to compare across legal systems with different legal traditions. Yet, comparison is possible, because the questions are often the same: How do you ensure that the State regulates these spaces in ways that pay due respect to personal freedom? The constitutional theory of the public forum in the US that ensures that on parks and highways public bodies do not discriminate or impose political views on protestors, mirrors the French theory of the public domain. The public trust theory in the US also has some resonance in France, where the administration cannot sell the public domain, which is thought to be inalienable. In all three countries, the question of freedom and inalienability is raised, but in different manners that reveal how the three countries control administrative power and protect the public sphere. This chapter tries to show how different conceptions of the State end up protecting the public sphere in different ways, and how, today, privatization threatens these spaces.

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516  Comparative administrative law The following sections trace the historical construction of the public space in England, the US and France, expose and explain the differences, and illustrate the contemporary crisis. In all three countries similar movements exist that must not hide the profound crosscountry differences of the law of public space.

1. THE CONSTITUTION OF PUBLIC SPACE IN ENGLAND AND THE UNITED STATES The constitution of public space required two innovations: the separation of the public and the private in the Sovereign, a theory often called the two bodies of the king, and the freedom of citizens to use public spaces; both were creations of liberalism. Each evolution translates into different legal mechanisms. However, they are closely linked because the State became a separate corporate public body composed of citizens and was no longer a private human being (the King). Only then could citizens have a right to use the public sphere. In other words, if a legal system considers that the State can regulate public space as a private owner (as some US cases did in the 19th century), citizens cannot assert any rights to use these spaces. The public space can then be defined as those properties that the king cannot alienate, for they are available to the public, that is, to the citizenry, for enjoying their liberties. 1.1  The Incomplete Separation of the King and State in the United Kingdom Kantorowicz and Maitland chronicled the emergence of the notion of the Crown as a separate entity from the King in England from the 12th century (Kantorowicz 1957; Maitland 1919). For as long as the King and Crown are one, there cannot be any public space. The first statement that the King cannot alienate certain rights and properties of the Crown goes back to 1257 and the Councillors’ Oath: ‘the essential factor was that Henry II created a de facto inalienable complex of rights and lands which later, in the thirteenth century, came to be known as the “ancient demesne” and which formed, in the language of Roman Law, tire bona publica or fiscal property of the realm.’ Doing thus, the King ratified the idea that some parts of the Royal domain were not his and was affected to the common utility and that the ‘Crown referred to the public sphere and to common utility’ (Kantorowicz 1957, 344). Despite these changes, the idea of inalienability in English law never became a binding principle. Kantorowicz discusses whether the principle was finally incorporated into the Oath. The historical fact, however, is that English kings alienated huge parts of their lands and had to resort quite often to acts of resumption to annul the gifts made: Maitland counts three in the 15th century and says the last one happened in 1700 to get back lands in Ireland. But the idea then was to preserve the King’s revenue so that he did not need to ask Parliament for further funds (Maitland 1919, 432). In reaction to the alienation made by Charles II and James II and, after the Glorious Revolution, by William III, the first Act of Parliament sought to prevent the Queen from alienating lands in the future.3 But 3

  Crown Lands Act 1702.

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The courts and public space  517 this Act, says Maitland, makes no distinction between the Queen in her private and her public capacity. That distinction occurred only in 1800 under a statute that allowed the Monarch to own land in a private capacity. This is the first legal expression of a publicprivate distinction in the English State. 4 The Crown in England has never been completely the ‘legal personification of the public sphere,’ and, therefore, came to be treated as a ‘private person of full age and capacity’ (McLean 2015, 131). The process of applying private law principles (such as property) to public law did not happen in the UK, as it did in France. As Loughlin puts it: ‘The Crown has, in practice, provided a poor substitute for the idea of the State. The main reason for this is that the monarchical structure of our system of government has frustrated any attempt systematically to unravel the “public” from the “private” aspects of the Sovereign’s responsibilities . . . the King could not be separated from his Crown’ (Loughlin 1999, 33), to the effect that, during Queen Victoria’s time, special legislation was needed to confer ordinary power on the Queen to grant leases, for example. In sum, no legal principle compels the State to manage its properties in the public interest. Thus, on the one hand, the property of the State remains, in essence, private. On the other hand, over time, common properties were legislatively and judicially reduced (Bonyhady 1987). Parliament passed several enclosure acts from 1760 to 1845 that converted commons into private property. It was mainly the courts that over 600 years ‘greatly reduced the public’s rights of access to and taking from the countryside.’ In 1789, in Ball v Herbert,5 the King’s Bench held that there is no general right of towing, that is, to use river banks for the purpose of navigation. In addition, in Blundell v Catterall in 18216 the same court was of the opinion that there is no right to use the foreshore for recreational purpose, bathing and crossing the adjacent land to access the sea. Bonyhady quotes other cases from the 19th century limiting the public’s rights to create footpaths, bridleways and carriageways (Bonyhady 1987, 6). In these cases, the idea that private property brings more efficient use of resources and that private landowners would be better regulators is prevalent. In his dissent in Blundell v Catterall, Best J. argues, unsuccessfully, for the public rights: The principle of exclusive appropriation must not be carried beyond things capable of improvement by the industry of man. If it be extended so far as to touch the right of walking over these barren sands, it will take from the people what is essential to their welfare, whilst it will give to individuals only the hateful privilege of vexing their neighbours.

Another instance where common law judges were manifestly insensitive to the rights of the public concerns the Stonehenge case of 1905,7 one of the most impressive megalithic remains in the UK. Judges refused to hold that the immemorial use of the road leading to the stones could lead to a right of access and to wander at large. The public has very few legal rights in public places in the countryside. Pollock argued, however, that this is counterbalanced by a de facto right to wander in open air in the countryside (Pollock 1883).

    6   7   4 5

Crown Private Estate Act 1800. 100 E.R. 560. 106 E.R. 1190. Attorney-General v Antrobus Chancery Division, [1904] A. 335 ; [1905] 2 Ch. 188.

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518  Comparative administrative law 1.2 The Vindication of the Rights of the Public in England and the US: The Notions of Public Trust and Public Forum 1.2.1  The public trust In the absence of any clear distinction between public and private, how did the rights of the public develop? Indeed, English and US law found ways to grant rights to the public through the notion of public trust (Deveney 1976). The concept comes from political phil­ osophy. Indeed, John Locke uses this notion quite often to describe the limits of constitutional powers. In Chapter 13 of the Second Treatise he bases the limit of each constituent power and even the legislative, on a fiduciary relation (Locke 1690, Chap. 13). He uses the trust as a core concept to limit even the absolute power of the legislative branch. This explains why the trust would prove useful to control alienation of public spaces. The trust is something that binds all powers. During the Middle Ages the public space was appropriated by lords and kings and as we saw, the distinction between the public and the private only appeared much later. The first document vindicating the rights of the public in certain spaces is the Magna Carta. It contains provisions on the use of rivers and the coast. However, one should not read the provisions of the Charter too widely, it essentially vindicates the rights of the barons against those of the King. But later, it became the legal source for the protection of navigation. For example, in Rex v Clark of 1706,8 Chief Justice Holt uses the Charter to hold that to hinder the course of a navigable river is against Magna Charta. It is therefore used to uphold the rights of navigation. The other major step in the intellectual construction of public rights is Hale’s Treatise De jure Maris (1667), whose influence in England and the US would be long lasting. It contains the first attempt to theorize the rights of the public. Contrary to the French position, which we will explain later, in the common law world, the rights of the public cannot be based on the appropriation of the King’s lands or those of any public body (precisely because most public spaces like the foreshore were actually held by private people), but are juxtaposed. In other words, Hale argues that, in ports, one could find three different kinds of rights: the jus privatum (in the form of a private right or title) can be held by either the Crown or a private individual; the jus regium lies in the King and expresses its police powers used for the public’s safety and welfare (it cannot be transferred); finally, the jus publicum gives the public limited rights, such as navigation, rights that even the King cannot violate. So, three kinds of rights coexist for ports and should be respected, even by the King. The rights of the public, in this instance, are limited to navigation and would be differently defined in another context. But, in Hale’s writings, there is no trace of a public trust doctrine. The public trust doctrine only developed in the 19th century, although the idea of the trust in public law is much older. In the 19th century, courts took the public trust doctrine in two directions. In England courts used it to prevent the misuse of public money by local governments (Barrat 2006). In the US it became the core notion for the vindication of public rights. The theory of the public trust gave legal protection to the public space. After the Revolution the property of the public domain was transferred from the King to 8

  88 E.R. 1558.

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The courts and public space  519 the American States.9 These spaces are, therefore, regulated by State law. The first legal expression of the doctrine occurred in Arnold v. Mundy in the Supreme Court of New Jersey10 (Blumm 2010). The Supreme Court cited this case in Martin v. Waddell’s Lessee (1842),11 a conflict over the property of oyster fisheries in the public rivers and bays of East New Jersey. The land in question had been granted by the King of Great Britain to the Duke of York who then transferred it to 24 persons, who later surrendered to the Crown their powers of government and retained private property in the land. Justice Taney here expresses the duties of the owner of the public space in terms of trust: The dominion and property in navigable waters, and in the lands under them, being held by the king as a public trust, the grant to an individual of an exclusive fishery in any portion of it, is so much taken from the common fund entrusted to his care for the common benefit.

The landmark federal case recognizing the doctrine is Illinois Central Railroad v Illinois.12 In this case, the legislature granted an immense portion of the lakeshore to the Illinois Central (Kearney and Merrill 2004). At issue was the legislature’s effort to repeal the public property rights conveyed in the Lake Front Act. Justice Stephen Field held that the State had no power to alienate the land in the first place (Kearney and Merrill 2004, 801): The State can no more abdicate its trust over property in which the whole people are interested, like navigable waters and soils under them, so as to leave them entirely under the use and control of private parties . . . than it can abdicate its police powers in the administration of government and the preservation of the peace.

Hence, ‘any grant of the kind is necessarily revocable, and the exercise of the trust by which the property was held by the State can be resumed at any time.’ The public trust doctrine forms thus the basis of the inalienability of land designated as ‘public space.’ Later, in Shively v. Bowlby,13 the Supreme Court decided that all questions about property rights in the bed of navigable waters and associated shore would be governed by State rather than federal law. The only federal role was to preserve navigation, that is, by preventing obstructions to waterways. This meant that the public trust doctrine became a matter of State, not federal law, and today there are as many public trust doctrines as there are States. Also, the doctrine seems limited to navigable waters. A comparative analysis of the doctrine in Eastern and Western States shows that some States in the US have expanded the notion to very different kinds of uses (Craig, 2007; Craig 2010). The notion of public trust protects public spaces in the US, but it is not a federal protection. In contrast, the takings clause of the US Constitution protects private property from being converted to public property without just compensation.

    11   12   13    9 10

Shively v. Bowlby 152 U.S. 1 (1894). 6 N.J.L. 1, 10 (1821). 41 U.S. (16 Pet.) 367 (1842). 146 U.S. 387 (1892). 152 U.S. 1 (1894).

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520  Comparative administrative law 1.2.2  The notion of public forum The US developed a constitutional doctrine to vindicate citizens’ freedom to use public spaces, called the public forum doctrine. Here the question is the extent to which the State can regulate the freedom of expression in public spaces. First, judges had difficulty in distinguishing between the States’ acting in a public or a private capacity. For example, in Commonwealth v. Davis in 189514 of the Massachusetts Supreme Court, Oliver Wendell Holmes considered the State as a regular private owner that could, as could any private owner, prevent the exercise of freedom of expression. In this case Holmes found constitutional a Boston ordinance that provided that no person shall, except by a permit from the Mayor, ‘make any public address’ in or upon any of the public grounds of the city. He writes that: For the Legislature absolutely or conditionally to forbid public speaking in a highway or public park is no more an infringement of the rights of a member of the public than for the owner of a private house to forbid it in his house. When no proprietary right interferes, the Legislature may end the right of the public to enter upon the public place by putting an end to the dedication to public uses.

This theory would later be denounced with judges using the public trust language and the public forum doctrine to neutralize the State powers attached to property and to vindicate the public’s rights. This shows to what extent the creation of the public sphere is linked to the recognition that on certain spaces public bodies cannot act as a private owner, that the right of property must be modified in order to protect civil and political rights. Indeed, in the 1939 case, Hague v. CIO,15 the US Supreme Court uses the public trust language to transform the relation between public bodies and their properties. The Mayor of Jersey City, New Jersey, had in 1937 used a city ordinance to prevent labor meetings in public places and to stop the distribution of literature pertaining to the Committee for Industrial Organization’s cause, deemed to be communist. The Court struck down the ordinance saying: Wherever the title of streets and parks may rest, they have immemorially been held in trust for the use of the public and, time out of mind, have been used for purposes of assembly, communicating thoughts between citizens, and discussing public questions. Such use of the streets and public places has, from ancient times, been a part of the privileges, immunities, rights, and liberties of citizens.

With the civil rights movement, a more demanding version of free speech was elaborated under the name of the public forum (Post 1987). The seminal case is Police Department of Chicago v. Mosley.16 It is not our goal to enter into the subtleties of the public forum doctrine, but the US Supreme Court has embarked on a categorization of public properties under more or less stringent conceptions of free speech. What is important for us is that, under the public forum doctrine, the concept of the public space is finally recognized and given firm ground in the US.

  167 U.S. 43 (1897).   307 U.S. 496 (1939). 16   408 U.S. 92 (1972). 14 15

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The courts and public space  521 1.2.3 A change in the common law: the contemporary emergence of a reasonable access standard to the public space There are signs of a rising awareness in the common law courts of a general need to protect access to public space without relying on constitutional principles (Gray and Gray 2009). These developments are similar to French developments although they occurred later in the common law, spurred by the civil rights movement in the US. Gray and Gray speak of a quasi-public property jurisprudence now spreading throughout the common law world (Gray and Gray 2009, 1333). This movement can be explained by social choices and a reaction against the privatization (and mainly commercialization) of public spaces. Although some judges may have said that the proprietary rights of a public authority are not different from a private owner, it is now broadly agreed in England that there exists a ‘critical’ distinction between the legal position of a private landowner and that of a landowning public authority. A public authority enjoys no unfettered discretion in the exercise of its responsibilities . . . it is not therefore lawful for a public body simply to do exactly what it wishes with its own land (Gray and Gray 2009, 1339).

Conversely, private entities that operate businesses advertised as open to ‘the public’ (like a mall) are not completely free to exclude individuals who seek access. According to Gray and Gray the common law rule seems now to require a reasonable access standard. There are precedents in the US (at least in New Jersey17) and in New Zealand,18 but the cases in England are not very clear. Indeed, in CIN Properties Ltd v. Rawlings19 the court upheld a shopping mall ban on a group of young people. The ban was afterwards reinforced by a court injunction whose effect was to ban this group in perpetuity from a large part of the center of their home town. The ruling was afterwards unsuccessfully challenged before the European Commission of Human Rights that declared the case inadmissible because of the failure of the UK to ratify the protocol on freedom of movement (Gray and Gray 1999).20 The youths in question, after having been acquitted of all charges of criminal activity, were nonetheless under a lifelong civil sanction. The result was their exclusion from their town’s shopping facilities, and they could not access many public services, a sort of exile. Later, the European Court of Human Rights in Appleby v. United Kingdom21 did not accept the claim that free speech conferred a right of entry to a shopping mall in all circumstances. The Court accepts the new importance of shopping malls in citizens’ lives but does not want to interfere unless the essence of the right is destroyed (for example if an entire city is owned by a private company).

17   Uston v. Resorts International Hotel Inc, 445 A.2d 370 (N.J. 1982); Green Party of New Jersey v. Hartz Mountain Industries Inc., 752 A. 2d 315 (N.J. 2000); Raleigh Avenue Beach Association v. Atlantis Beach Club, 879 A.2d 112 (N.J. 2005). 18   Sky City Auckland Ltd v. Wu [2002] 3 N.Z.L.R. 621. 19   [1995] 2 EGLR 130. 20   Mark Anderson and Others v. United Kingdom (1998) 25 E.H.R.R. 218. 21   [2003] ECHR 222.

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522  Comparative administrative law

2. FRANCE: THE ELABORATION OF A PUBLIC PROPERTY LAW In the US and the UK there is no comprehensive legal regime regulating the relation of government bodies to their properties or resolving the public law responsibilities of private landowners. Private property law has not been transformed into a public law regime for the purpose of establishing and protecting public space. The strongest theory is the public forum doctrine, but it is limited to speech, and only applies in the US. Here and there a private law conception of the State prevails. We will try to explain the law of public property in France and why there is such a marked difference between France and the US and the UK. The distinctive feature of French law is the way that public law draws on the private law concept of property to generate a distinctive public property law. During the Ancien Régime, the King and the Lords appropriated public spaces, and the idea that the Kingdom was privately owned by the King was common (one must also have in mind that feudal property cannot be defined as an exclusive right over a property, indeed in feudal law the prerogatives over a property are many). To oppose the private appropriation of the res publicae some jurists in the Middle Ages developed the theory that the King was the guardian of those assets (a theory close to the trust image): It is certain that the true property of the roads does not belong to the King. For it cannot be said that the roads are part of their domain, but they are of the category of things that are extracomercium, whose property is thus in no-one, but the use to everyone. For this reason, they are called public and the Sovereign Prince is their guardian, not as those properties that are part of his domain but as the guardian and protector of the public good (Loyseau 1608).

Here, Loyseau tries to find a basis to limit the power of the King over the public assets using guardianship. In the 17th century, other lawyers tried to separate the King from the res publicae using the notion of guardianship (Domat 1767). The first legal effort to separate the public from the private of the King is common to England and France: the creation of the notion of the Crown. The creation of the Crown puts the public domain outside the reach of the King’s power. Some assets must survive each King, and none is able to dispose of them. The rule of inalienability helps to preserve the King’s revenue and limit recourse to taxation. The rule is formally introduced as a fundamental law of the kingdom by the Edit de Moulins in 1566. The edict distinguishes a fixed inalienable domain that must pass from one King to another and another part that can be managed more freely. It is against this backdrop that the first attempt to elaborate a theory of public property was made in the 18th century (Lorry 1764–65). Lorry asks whether navigable rivers can be treated as private property. He argues that, in fact, rivers are managed, that is, someone exercises the prerogatives of ownership. However, while being able to receive some ‘impression’ of property, he says, they are nonetheless allocated to public use and not to the private use of citizens. In other words, the public power owns these assets for the public. He says: ‘this public property lies in the perception of the revenues of the property, while the public use must be free, and the public power cannot curtail this public use’ (Lorry 1764–65, 16). He transposes the notion of private property to the State,

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The courts and public space  523 the name of property is a legal name that indicates the right to exclude (. . .). What an inconvenience to apply it to this context. The property will belong to Society, that is to say, to the public power that exercises the rights attached to it. This property will be used not for the private use of society, but for their common uses (Lorry 1764–65, 34).

With the French Revolution, the Crown property became the Nation’s property. The Civil Code lists roads, streets, rivers, shores of the sea as belonging to the public domain. The Revolution did not change the nature of the public domain. But the Revolution achieved something else, which may explain the major difference between the law of the public space in France, on the one hand, and the UK and the US, on the other. The Etats Généraux nationalized all the properties of the Church on November 2, 1789, in order to solve the fiscal crisis of the State. In addition, the property of the aristocrats who had emigrated was also confiscated. In sum, with the French Revolution the property of the Crown, of the Church and of some major landowners was transferred to the State. No such expropriations occurred in the UK or the US. In the 19th century the doctrinal conception of public property was slow to take shape. The Civil Code incorporated the concept of public domain, providing that some things belong to no-one and their use is common to all. However, its mention in the Civil Code meant that it became a topic for research by private lawyers rather than experts in public law. That is probably why some writers use the private law notion of guardianship to explain the relation between the public domain and the State. The culture of the lawyers who study public property can affect the way that they conceptualize it. Guardianship is close to the trust institution, and both are private law concepts. In the common law world, the lack of a public law focus may explain the way public properties are researched (or not researched for that matter). In 19th century France, the situation is identical. The main writer, who also influenced American judges in the 19th century (Deveney 1976, 53), is Victor Proudhon (Proudhon 1833–34). At first glance the notion of guardianship seems rooted in pre-Revolutionary legal concepts even though the Revolution changed the conception of property. Against the feudal conception of property where many people could claim some prerogatives over one plot of land, the Civil Code promotes a conception of property characterized by individual enjoyment and power to exclude. Against this backdrop, it becomes difficult to envisage a new public notion of property where use is common to all. Also, the 1789 Declaration considers property as an individual and natural right of man, not of a natural body. These elements explain why it was at first difficult for French lawyers to develop a notion of public property. Hauriou (1892) took the last step on the road towards a full concept of public property that was adopted by most administrative law scholars. Hauriou starts from two very simple observations. First, public bodies operating in the public domain actually exert proprietary prerogatives (making a claim for the restitution of some property, possessory action, etc.). Hence, it would be unrealistic to deny that they do not have property rights. Furthermore, public spaces belong to the public at large, but the public cannot exercise its rights: it is thus more realistic and simpler to confer property rights on the State that enjoys the necessary legal personality to exercise the prerogatives attached to the right, even though the State embodies the public only imperfectly. Hauriou says (using some words that mirror the trust language of the common law countries) that the State has a fiduciary responsibility to the public that allows it to protect them easily and to draw from them their maximum utility. He creates the notion of administrative property: ‘it is an

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524  Comparative administrative law administrative property that must be attached to the public power and that is characterized, in its effects, by the destination of the property to the public utility’ (Hauriou 1911, 694–5). With Hauriou, French law finally adopts the notion of public property that strikes a balance between the requirements of publicness and the realist observation that only public bodies can protect such property. The notion also helps to get rid of the private law conception of the domain. Public property has a public nature because it will be exercised by a public (governmental) body for the public. Although Benoît Plessix did not make a comparative analysis in his master work on the use of private law in the making of administrative law, he is right to conclude that: ‘It really seems that there exists a French conception of the public property’ (Plessix 2003, 415). Hauriou’s solution did not come from thin air. After a century-long debate over the right of property and the proper rights to give the public, a balance was found in the 1870s. French administrative law and the doctrine of public service are closely linked to ­‘solidarist’ ideas. The 19th-century struggle between liberalism and socialism found a solution in the ‘solidarist’ movement, closely linked to the emergence of administrative law and the social state in France. The solidarists, like Bourgeois (Bourgeois, 1902) managed to give legitimacy to the idea of social property, that is, of a new property law that would incorporate the requirements of society and solidarity (Crétois, 2014). Bourgeois built his theory on a severe critique of individualism. Bourgeois and Hauriou’s thoughts were deeply influenced by the new discipline of sociology and especially by Durkheim.22 It seems there was a consensus at that time for a more social conception of property that helps one to understand how the concept of public property developed. The jurisprudential foundations of the legal regime of public spaces in the US, the UK and France are therefore different although the three countries tend to ask similar fundamental question: How do you define ‘public spaces’ and how should the law ensure that such spaces are managed to further the public interest?

3. COMPARATIVE CONSIDERATIONS: PUBLIC TRUST, PUBLIC FORUM AND PROPRIÉTÉ PUBLIQUE Because we are comparing jurisprudential concepts, it is difficult to assess precisely whether, in a particular case, the legal treatment would be different. The public trust doctrine seems narrow (mainly concerned with navigable waters) but many statutes in the UK and the US protect other public spaces (highways, parks, commons, etc.). Also, in the US some States have enshrined the public trust doctrine in their constitutions, which gives public space, however defined, a high degree of protection. In France, the rules of public property law are only enforceable against public bodies so there could be no case similar to Illinois Central. There are debates about elevating the rules of the public domain to constitutional level, but that has not happened, although one could say that Illinois Central essentially protected the police power of the State, not the general

22   Other thinkers in the 19th century certainly played a role in giving legitimacy to a more social concept of property: Fouillée and Duguit (Crétois 2014, 311–22).

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The courts and public space  525 public.23 In this sense, a similar result could be achieved in France because the police power of the State cannot be delegated to a private party.24 Apart from this, the theories differ widely in the degree of protection they afford to the public interest. In French administrative law the public property of any public body is divided in two: the public and the private domains. Public spaces are in the public domain; therefore they receive a high degree of protection: they are inalienable, they are immune from seizures and no adverse possession can arise. On the contrary, the private domain can be managed as private property. Obviously, much turns on the definition of the public domain. The law of public properties was recently codified (Code général de la propriété des personnes publiques) so the definition is now statutory, though it was a judicial creation. The public domain of a public body (the State, local governments and public corporations) ‘comprises the lands, belonging to it that are either allocated to the direct use of the public or to a public service insofar as it has been specially designed for the performance of such missions’ (article L2111-1). It comprises most public spaces from the sea, the seashore, rivers, highways, public places, utilities’ networks. Public bodies enjoy wide power to protect the interests of the public: the private use of the public domain must be expressly authorized, and the State should charge private businesses that operate there. If the public interest requires it, such uses can be terminated (no right in rem can be acquired on the domain). Furthermore, on the public domain, liberties are protected: in this respect, the public domain is also the functional equivalent of the public forum doctrine. It is a principle of administrative law that the ‘common’ use of the public domain is free. At the time of this writing, the government has declared a state of emergency allowing the executive to take measures banning assemblies. Some marches were banned, especially during the Paris Climate Change Conference, but the administrative judge can review the proportionality of the decisions. The court’s role is important in assuring the protection of the public interest. The rules on standing to obtain judicial review are very generous in France compared to the US, so the public, whether individually or in a group, can easily challenge the regulatory or management decisions of a public body over its properties. French and US perspectives on standing could not be more opposite: whereas French administrative law sees judicial review as a way to keep the administration within its defined powers and standing is consequently open; in the US judicial review seeks to protect individual rights first. At least two cases in the US demonstrate this: Norton v. Southern Utah Wilderness Alliance,25 and Lujan v. National Wildlife Federation.26 Both cases deal with the reviewability of government management decisions involving public lands, and in both cases plaintiffs were found to lack standing. The main achievement of French administrative law lies in its generous standing doctrines and in the elaboration of a comprehensive legal framework to vindicate the rights of the public in the use of public spaces. In the US, these rights are protected, if at all, largely through constitutional law, probably because of the inability of the common law

    25   26   23 24

146 U.S. 387, 454. N° 2003-473 DC. 542 U.S. 55 (2004). 497 U.S. 781 (1990).

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526  Comparative administrative law to integrate public values and because most land use law is governed by state and local, not federal, law.

4. CONCLUSION Although there are differences in the way each country protects public space, some common goals were achieved: vindicating the rights of citizens and curbing State power. But one lesson of this chapter is the difficulty that common law systems have in adapting to public values. Usually, the stereotypical comparison between civil and common law systems emphasizes a sharp public/private law distinction in civil law systems compared to common law systems. However, the common law, by placing land use law in the private law category, has had difficulty dealing with public values as they affect land use. The French experience, in contrast, built much of its public property law on the shoulders of private law concepts and then added public service values. In this sense the public/private distinction is, in fact, less strong and more permeable in France than is the UK and the US. At present, the public sphere, slowly elaborated and protected by courts in the three countries, is experiencing paradoxical movements. On the one hand, an expanding privatization movement began in the 80s. The privatization of the public space has led to the decline of the bourgeois public sphere that Habermas diagnosed in 1962, ‘from a public critically reflecting on its culture to one that merely consumes it’ (Habermas 1989 [1962], 172). On the other hand, there are signs of the increasing relevance of the public space, e.g., the Arab Spring, the Indignados, and the Occupy Movements. These developments were supported by intellectual efforts that demonstrated the efficiency and importance of commons. Elinor Ostrom, for example, has shown that common management of lands is not necessarily inefficient. The topic of the commons is widely researched in the legal and political science academy on both sides of the Atlantic but, unfortunately, has failed to translate into strong public policies, although recent legislative enactments in the UK did increase some public rights over the countryside or commons.27 Against that backdrop, this chapter has recalled the long process by which liberal societies in the Western world sought to protect public values. That process needs to continue and, especially in land use, to incorporate public values into the increasingly dominant sphere of the private market.

REFERENCES Barratt, John (2006), ‘Public Trusts,’ Modern Law Review 69(4), 514–42. Blumm, M.C. (2010), ‘The Public Trust Doctrine – A Twenty-First Century Concept,’ Hastings West-Northwest Journal of Environmental Law & Policy 14, 105. Bonyhady, T. (1987), The Law of the Countryside: The Rights of the Public, Abingdon, Oxford: Professional Books. Bourgeois, L. (1902), Solidarité, 3rd ed., Paris: Armand Colin. Craig, R.K. (2007), ‘A Comparative Guide to the Eastern Public Trust Doctrine: Classifications of States, Property Rights, and State Summaries,’ Penn State Environmental Law Review 16(1), 1–113.

27   The Countryside and Rights of Way Act 2000, and the Commons Act 2006 strengthen the rights of citizens to access the open lands and commons in the countryside for recreation.

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The courts and public space  527 Craig, R.K (2010), ‘A Comparative Guide to the Western States’ Public Trust Doctrines: Public Values, Private Rights, and the Evolution Toward an Ecological Public Trust,’ Ecology Law Quarterly 37(1), 53­­–197. Crétois, P. (2014), Le renversement de l’individualisme possessif: de Hobbes à l’État social, Paris: Classiques Garnier. Deveney, P. (1976), ‘Title, Jus Publicum, and the Public Trust: An Historical Analysis,’ Sea Grant Law Journal 1, 13–82. Domat, J. (1767), Les Loix civiles dans leur ordre naturel, le Droit public et Legum Delectus, Paris: Despilly. Gray, K. and S.F. Gray (2009), Elements of Land Law, 5th ed., Oxford: Oxford University Press. Gray, K. and S.F. Gray (1999), ‘Civil rights, civil wrongs and quasi-public space,’ European Human Rights Law Review 1, 46–102. Habermas, J. (1989 [1962]), The Structural Transformation of the Public Sphere An Inquiry into a Category of Bourgeois Society, Cambridge, MA: MIT Press. Hale, M. (1667), ‘De Jure Maris et Brachiorum ejusdem,’ reprinted in Stuart Moore (1888), A History Of The Foreshore And The Law Relating Thereto, 3rd ed., London: Stevens & Haynes. Hardin, G. (1968), ‘The Tragedy of the Commons’, Science 162, 1243–8. Hauriou, M. (1st ed. 1892; 7th ed. 1911), Précis de droit administratif et de droit public, Paris: Larose. Kantorowicz, E.H.  (1957), The King’s Two Bodies: A Study in Mediaeval Political Theology, Princeton, NJ: Princeton University Press. Kearney, J.D. and T.W. Merrill (2004), ‘The Origins of the American Public Trust Doctrine: What Really Happened in Illinois Central,’ University of Chicago Law Review 71(3), 799–931. Locke, John (1690), Two Treatises of Government, London: Awnsham Churchill. Lorry, P-C. (1764–65), Mémoires sur les matières domaniales, ou Traité du domaine by Lefèvre de La Planche, Paris: Desaint et Saillant. Loughlin, M. (1999), ‘The State, the Crown and the Law’, in Maurice Sunkin and Sebastian Payne (eds), The Nature of the Crown, Oxford: Oxford University Press. Loyseau, C. (1608), Traité des seigneuries, Paris: A. L’Angelier. Macpherson, C.B. (1962), The Political Theory of Possessive Individualism Hobbes to Locke, Oxford: Clarendon Press. Maitland, F.W. (1919), The Constitutional History Of England, Cambridge: Cambridge University Press. McLean, J. (2015), Searching for the State in British Legal Thought: Competing Conceptions of the Public Sphere, Cambridge: Cambridge University Press. Merrill, T. (2014), ‘Property Clause’, in The Heritage Guide to the Constitution, David F. Forte and Matthew Spalding (eds), Washington, D.C.: Regnery Publishing, pp. 278–81. Ostrom, E. (1990), Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge: Cambridge University Press. Plessix, B. (2003), L’utilisation du droit civil dans l’élaboration du droit administratif, Paris: Éditions Panthéon-Assas. Pollock, F. (1883), The Land Laws, London: Macmillan. Post, R. (1987), ‘Between Governance and Management: The History and Theory of the Public Forum,’ UCLA Law Review 34, 1713–835. Proudhon, V. (1833–34), Traité du domaine public, ou de la distinction des biens considérés principalement par rapport au domaine public, Dijon: Victor Lagier. Rose, C.M. (1986), ‘The Comedy of the Commons: Commerce, Custom, and Inherently Public Property,’ University of Chicago Law Review 53(3), 711–81.

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PART V ADMINISTRATIVE LAW AND THE BOUNDARIES OF THE STATE

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PART A PUBLIC AND PRIVATE

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32.  Three questions of privatization Daphne Barak-­Erez*

Privatization cuts through borders and cultures and is driven by a complex set of factors, partly ideological and partly economic. It can lead to new forms of government action and should therefore be a major focus of public law, both constitutional and ­administrative.1 Privatization decisions are policy choices, but these choices also have legal relevance. Its opposite, nationalization, has always been discussed not only as a matter of public policy but also as a matter of law, due to its impact on property rights. This understanding should serve as a catalyst for further study of the public law of privatization. The current financial crisis has reinvigorated discussion of nationalization initiatives in the form of bailout programs or partial government takeovers. Nevertheless, nationalization is still perceived as an exception, which retains as its long-­term goal a return to private ownership. The current crisis is yet another illuminating example of the import­ ance of regulating private activities, a central issue to any discussion of the public law of privatization. Legal scholarship has already begun discussing the implications of privatization for public law but, so far, without offering a general framework for analysis. By contrast, I argue that, rather than meriting some merely doctrinal adjustments, privatization is a fundamental process that calls for the re-­evaluation of public law, leading to the development of a new sub-­area focusing on the public law of privatization.2 This chapter offers an initial outline of a public law of privatization. Specifically, it presents a model for analyzing questions of privatization from a public law perspective, which aims to reflect the complexity of the social and economic challenges posed by privatization processes. It deals with the social and distributive implications of privatization decisions as well as with their potential effect on human rights, rather than only with managerial-­utilitarian aspects. My approach rests on the distinction between three different questions raised by privatization decisions. The first question considers the boundaries of privatization: are there any limitations on the types of actions or types of powers that can be privatized? The second question relates to the administrative process of privatization: what are the *  Justice, Supreme Court of Israel. Formerly Professor of Law and Stewart and Judy Colton Chair of Law and Security, Faculty of Law, Tel-­Aviv University. I thank the participants of the ‘Comparative Administrative Law’ Workshop at Yale Law School for their comments, Omer Netzer for research assistance, Ofra Bloch for technical assistance with citations and Batya Stein for editing. 1   Obviously, privatization may also be of interest in the context of other legal fields, such as labor law, concerning the rights of employees whose workplaces have been privatized, or private law, given that the growing role of private entities in the public sphere may lead to increasing demands for businesses to assume social responsibility. 2   Such sub-­specialties have been developed in other areas of government activity, for example, government procurement.

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534  Comparative administrative law constraints that should apply to the implementation of a privatization decision? For example, is there a duty to set a privatization policy before proceeding with a concrete privatization initiative, or is there a duty to disclose information regarding privatization initiatives? The third question refers to the outcome of privatization and its regulation: which legal regime should apply to privatized activities, and will these activities be subject to special regulation or special duties? The chapter does not assess the proper scope of privatization, which is usually determined by ideologies and political philosophies. Accordingly, decisions on the scope of privatization are usually left to the public arena. The distinction between privatization policy and the law of privatized entities should thus be carefully preserved although, as explained below, deferral to the political arena may also have its limits. I proceed as follows. Section 1 explicates the different meanings of the term ­‘privatization’. Section 2 summarizes the traditional public law approach to privatization. This approach recognized that privatization might raise specific legal questions, but it generally supported limited judicial intervention in this area, focusing mainly on equality in the competition for business opportunities created by privatization. Section 3 points out the ‘blind spots’ in the traditional discussion, and highlights additional legal questions that need to be examined. The chapter concludes by suggesting directions for developing a new public law of privatization.

1.  PRIVATIZATION’S MANY FACES A comprehensive framework for a discussion of privatization must be preceded by a description of its characteristics and its scope. Traditionally, privatization has been identified by the transfer of government assets – land or holdings in government-­owned companies – to private hands. Although such transfers have usually been the first expressions of privatization policies,3 privatization is a far more complex phenomenon, and consequently lacks a universally accepted definition (Starr 1988). Generally speaking, privatization aims to reduce government intervention in social and economic life. This aim may be reached through diverse means, including contracting with private companies for the supply of public services that the state believes it is obliged to supply4 and leaving room for private activity in new sectors through government passivity.5 Awareness of the multivalent nature of privatization is essential for several reasons. First, defining a phenomenon and identifying its scope in the social and public reality are

  See, for example, in Israel: Chapter 8-­1 of the Government Companies Law 1975.   Views on government obligations to supply services vary in accordance with one’s political philosophy as well as with the economic categorization of some services as ‘public goods’. In fact, even the latter categorization may be controversial. For instance, a lighthouse is a classic example of a public good, yet some criticize this classification by pointing to examples of privately operated lighthouses (Coase 1974, Van Zandt 1993). 5   This categorization of privatization formats is based on a report prepared by the author for the XVI Congress of the International Academy of Comparative Law held in 2002 (Barak-­Erez 2006), and a recent revision (Barak-­Erez 2009). Due to the pace of developments in the field of privatization, the present analysis differs from former writings in some of the details. 3 4

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Three questions of privatization  535 necessary for developing suitable forms of legal regulation. Second, non-­standardized terminology, with different authors using the same term for different actions and disregarding relevant distinctions, makes analysis difficult. In some cases, privatization involves the complete withdrawal of the government from certain areas, based on the recognition that citizens would be better served by the free market. In others, responsibility and even management remain in the government’s hands, and privatization merely means that a private entity supplies a social service under government oversight. In yet other cases, privatization entails the government’s withdrawal from the obligation to supply services on an equal and universal basis and an undertaking to provide them only to those who can afford to pay for them. The analysis that follows points to a wide range of cases, which reveal privatization’s many faces. Some of these cases are closer to the core case of privatization, and others are more peripheral. All, however, share a number of similarities: all entail a broader role for private bodies in social and economic life, intensive cooperation between the government and private bodies and the application of private market logic to government action. The discussion takes as a starting point existing traditions regarding the scope of government involvement in different sectors. Government withdrawal from areas where it has been active in the past will be included as acts of privatization.6 1.1  Establishing and Selling Government Companies The first signs of a privatization policy are usually government efforts to establish state-­owned businesses – be they corporations owned by the central government or municipal companies under local government control. Historically, the establishment of government-­owned corporations was a form of government involvement in economic life, channeled through a business activity. At a later stage, however, the activities of these companies became the basis for further privatization initiatives. First, the very existence of these companies represents a constant temptation to transfer areas of operation from the authorities to the companies they control. When an operation is shifted to a company, it is restructured so as to accrue profits.7 Often, the way to achieve this goal is to charge for services that had been supplied for free in the past. Second, when the policy of selling assets to private bodies becomes acceptable, the most convenient form of implementation is to sell the shares of government-­owned corporations to private investors. If a government activity selected for privatization does not already operate through a company, an expedient first step is to set it up as a government-­owned corporation;8 and the selling of the company’s stock is the next phase. The policy of selling companies owned by public authorities is probably one of the best known indications that ­privatization has occurred.9

6   Accordingly, the analysis is not based on a normative assumption concerning the proper scope of government action. 7   Profit-­ making is the dominant ethos of corporate management. In this spirit, Israel’s Government Companies Law 1975 clarifies that a government company, unlike an administrative authority, should usually conduct itself in light of commercial considerations. 8   This was the model adopted in the privatization of British Petroleum. 9   For example, in Britain, the government sold its shares in Cable & Wireless, British Petroleum, Jaguar Motors, and Rolls-­Royce.

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536  Comparative administrative law 1.2  Government Activity through Private Contractors (Outsourcing) Another pattern of privatization is the gradual reduction of the administrative functions performed by the authorities, which are replaced by private contractors hired for this purpose. Outsourcing is currently a major form of privatization (Harden 1992, Stevenson 2008). It began with the transfer of technical activities in such areas as construction, garbage collection, school bussing, and computer services. In time, contracting with external entities gradually expanded to matters that are technical by definition but also contain discretionary elements, such as tax collection services. The next stage involved a transfer of government functions by devolving a significant measure of discretion to private entities, such as the operation of welfare-­to-­work programs (Diller 2000: 1128, 1198–9) and the establishment of privately owned and privately operated prisons. Occasionally, this type of privatization also has the potential to influence public service indirectly, for instance, when the training of public service professionals is privatized. 1.3  Construction of Public Infrastructure Projects by Private Investors (BOT Initiatives) Governments frequently contract with private entrepreneurs to build new infrastructure projects. The private firms undertake not only to build the project but also to operate it, and they are granted special concessions during the period that follows the construction phase. Government collaboration with private entrepreneurs stems mainly from a desire to secure private funding for the initial stages of construction. The concession-­owners, who bear the costs of the project, ensure a profitable return on their investment through its long-­term operation, during which they charge a fee for its use. In this model, known as build-­operate-­transfer (BOT), private investors build the infrastructure at their own expense, operate it over a period of time granted to them in advance and, at the end of it, transfer ownership or control of the project to the state. This type of privatization has been used for transportation and water infrastructure projects among others (Malinsky 1996). 1.4  Licensing and Granting Permits in New Sectors When private activity replaces government action, the public sector often accomplishes this by granting licenses to private service providers. In the area of education, for example, a growing tendency to privatize is evident in the licensing of new private schools and universities, thus partially avoiding the need to establish more public schools and public universities. In the area of telecommunication, many governments licensed private companies to operate cellular phone networks as this new technology became available. This is an example of privatization, although no transfer of shares or other assets was involved. The central difference between privatization through outsourcing and privatization through licensing is that, when outsourcing, the authorities still recognize a basic ­responsibility to supply the service, unlike the case of privatization through licensing.

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Three questions of privatization  537 1.5  Privatization by Omission through Limited Government Activity At times, the state contributes to the privatization of certain activities by failing to act effectively in a particular area, thereby making room for private initiatives. Areas such as education and health illustrate this particular process. Thus, for example, when the public education system provides limited hours of study or a poor quality of teaching, more parents opt for private education (Gillette 1996). In some cases, the missing government operation is not due to the withdrawal of a service that had been supplied at a better level in the past, but rather to the government’s failure to respond to a new public need. 1.6  Providing Services for Fees Privatization also occurs when the relevant agency continues its activity but starts to collect a fee for the services it supplies – a growing phenomenon in public facilities such as parks and museums.10 Sometimes this happens when an activity is shifted from the government to a government-­controlled company that operates as a separate, profit-­ making budgetary unit. Privatizations of this type, however, can also be effected through the agencies’ direct collection of fees. Generally, fees are levied for services provided at a level higher than the usual public standard. 1.7  Commercialization of the Public Space Traditional government activity created an area free from commercial activity, but in conditions of budgetary restraints commercial elements are gradually entering the public space. For instance, when the authorities collect fees for advertising on signs, they privatize the public space. Consequently, the face of the public space is determined, inter alia, by the wishes and preferences of bodies that can afford to pay for advertising. Similarly, when advertising is permitted in educational institutions in exchange for a fee, the public space of the school that had been immune to the commercial market is partially privatized. 1.8  Cooperation with Third-­sector Bodies Another type of privatization is the institutionalized cooperation between the government and third-­sector funds and associations known as non-­governmental-­organizations (NGOs). This cooperative arrangement permits the performance of tasks that the government would have fulfilled had it not been pressed by budget limitations. Examples include cooperation with private associations that help the poor. Although cooperation between the third sector and the authorities may not always be perceived as privatization, it should be viewed as such when it is institutionalized and part of the agencies’ standard operation (Minow 2000).

10   See, for example, the Israeli case of HCJ 8676/00 Adam Teva V’din-­ Israel Union for Environmental Defense v. Municipality of Raanana 59(2) PD 210 (2004) (henceforth the Raanana Park case).

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538  Comparative administrative law 1.9  Voucher Systems Under a voucher system, the government provides services also by subsidizing their purchase from private suppliers, such as private schools or private health-­care providers (Trebilcock et al. 2000, Alexander and Alexander 2004). Rather than a direct income transfer, the voucher is tied to the purchase of particular goods and services and may cover a proportion of the market price or allow beneficiaries to obtain free services subject to dollar limits or other constraints.

2.  THE TRADITIONAL APPROACH TO PRIVATIZATION The traditional starting point for the debate on privatization has been to view it as a policy matter that provides only a limited role for public law. The legal discourse on privatization has accordingly been confined to ‘islands’ of limitations, without addressing it as a central challenge for public law. This section introduces this ‘narrow’ perspective on privatization in order to expose its limitations. 2.1  The Boundaries of Privatization: Loose Limitations The prevalent view used to be that the decision to privatize does not raise legal questions. The few limitations applied to privatization decisions addressed specific concerns, such as purchase of assets by hostile bodies. 2.1.1  Constitutional neutrality The traditional baseline assumed that privatization does not raise constitutional concerns. In Israel, Chief Justice Barak contended that the Basic Laws of the state could live with both a capitalist and a socialist system,11 a viewpoint that seems reasonable as long as privatization refers only to the sale of assets. The sale of many government companies indeed lacks any constitutional meaning, and although decisions on such issues may be the subject of disputes, these should be confined to economic and ideological issues. But when privatization changes its nature and is extended to include social services and even core government functions, the assumption that constitutional law is extraneous should be reassessed.12 11   According to Chief Justice Barak: ‘the Court applies judicial review. It checks the legitimacy of the law, not its wisdom. The question is not whether the law is good, efficient, or justified. The question is whether it is constitutional. A “socialist” legislator and a “capitalist” one might legislate different and contradictory laws, which will all fulfill the demands of the limiting paragraph. Indeed, the basic laws are not a plan for concrete policy. Privatization and nationalization could both exist in their framework. Market economy or central management of the economy can both find a living space, as long as the economy activity – which harms the human rights – will fulfill the demands of the limiting section.’ HCJ 1715/97 Bureau for Inv. Advisors v. Minister of Finance 51(4) PD 367, 386 (1997). 12   In the past, when the forms of privatization were more limited, I shared the view that, as a rule, constitutional law should not limit decisions to privatize but focus only on the consequences of privatization (Barak-­Erez 1999b, 2001). However, the new patterns of privatization have led me to reconsider this view.

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Three questions of privatization  539 Furthermore, constitutional law has sometimes been used to encourage privatization. An illuminating example is the Canadian case of Chaoulli,13 in which the Supreme Court of Canada held that the prohibition on private health insurance in Quebec violated the basic rights of the petitioners, who sought private insurance because of the unsatisfactory level of public health care.14 European law also has not been neutral concerning privatization trends and, in fact, has served as a driving force that encouraged member states to introduce privatization initiatives (Verhoeven 1996). 2.1.2  The ultra vires principle and anti-­delegation presumptions Theoretically, the ultra vires principle could act as a potential limitation on the scope of privatization, assuming that privatization decisions require legislative authorization. In practice, however, the ultra vires principle has not functioned in this fashion because the power to contract out was assumed to be implied in the provisions empowering agencies to act in their specific areas of concern. The courts did not require an express authorization to engage in privatization. In any event, the ultra vires principle cannot function as a significant barrier when the legislature authorizes administrative agencies to contract out, as is the case in many countries.15 2.1.3  Limitations on the transfer of rights to foreign entities Other limitations have originated from concerns about transferring ownership of assets vital to the economy or the security of the state (electric infrastructure, for example) to foreign entities or to corporations that might be controlled by citizens of foreign countries. The initial phase of the sale is easier to control because the authorities can subject it to specific terms (such as the purchaser’s citizenship). Controlling later transfers is harder, however, because ownership is no longer in the state’s hands. For this purpose, special mechanisms were developed, designed to limit the transfer of assets with a bearing on national interests to third parties, even when ownership is already private. These mech­ anisms are either ‘golden shares’, which give the state (or one of its agencies) the right to veto future business transactions,16 or legislation that defines conditions for the transfer of ownership in the stock of the privatized company.17   Chaoulli v. Attorney General of Quebec [2005] 1 SCR 791.   More specifically, the Canadian Supreme Court held that the prohibition infringed the rights protected by the Quebec Charter of Human Rights and Freedoms, which protects the rights to life and security of the person. 15   In Britain, the Deregulation and Contracting Out Act 1994 allows for many functions of ministers or office holders to be exercised by others, including non-­civil servants such as private contractors, though this does not apply to judicial or legislative functions or to powers affecting personal liberty or the search or seizure of property. A similar act applies also to local government – Local Government (Contracts) Act 1997. 16   ‘Golden shares’, however, restrict the free movement of capital and are therefore liable to be struck down in the context of European law unless justified on grounds of security or public policy. See: Case C-­98/01 Commission v. UK (2003) ECR I-­4641 (golden share in British Airport Authority held a breach). The British government frequently held ‘golden shares’ in privatized companies. It later dispensed with them in most cases, but refrained from doing so in the area of electricity (Prosser 1997). 17   See, for example, in Israel: Security Corporations Law (Protection of Security Interests) Law 2005. 13 14

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540  Comparative administrative law 2.2  The Decision-­making Process in Privatization: Equal Opportunity and Fairness The traditional discourse about privatization focused on issues of equal opportunity and fairness. The key question in this context used to be how to ensure the optimal allocation of the new opportunities created through privatization, concerning both the right to equality and the maximization of economic benefits. The recognition that the decision to privatize creates a temptation to rely on irrelevant and inappropriate considerations, from favors to close associates and up to the taking of bribes, intensified the debate (Rose-­ Ackerman 1999: 35–8). Accordingly, the main emphasis used to be on the development of mandatory bidding rules (or at least mandatory competition between several potential contractors)18 and on rules concerning conflicts of interest (in order to prevent the involvement of interested parties in the selection of the winner).19 2.3  The Regulation of Privatized Functions and Activities Traditionally, privatization policies went hand-­in-­hand with ideologies resisting state involvement, neglecting the importance of accompanying privatization with appropriate regulation not only of the economic aspects of the privatized activity but also of the norms that private bodies should follow in performing quasi-­governmental functions. Accordingly, private agents substituting for public authorities were only partially subject to norms of public law, and regulation remained ambiguous. In the US, the ‘state action’ doctrine has been interpreted narrowly and was limited only to activities that substitute the state’s ‘traditional functions’. Specifically, it was applied to private prisons but not to private housing for the elderly and other privatized social services (Barak-­Erez 1995). In other jurisdictions as well, the courts have tended to be hesitant in the application of public law norms to private bodies, in varying degrees. In Israel, these bodies were defined as hybrids in order to express their combined character, comprising private and public aspects simultaneously. The first decision of the Israeli Supreme Court in this area related to a government-­owned corporation, the Israeli Electric Corporation.20 According to the precedents of the Israeli Supreme Court, however, the rationale for implementing public law in such cases was not government ownership but other substantive consider­ ations, such as the nature of the function fulfilled by the company (a vital activity such as the production and supply of electricity) or its monopolistic status.21 In Britain, the public law standards of the Human Rights Act of 1998 apply only to entities that meet the criteria of a ‘public authority’ according to this Act, which include ‘any person certain

18   See, for example, in Israel: Mandatory Tenders Law 1992. See also Hansen (2003) (addressing the focus on competition and discussing competition in government procurement in New York, while pointing to the limits of the focus on competition rules). 19   Accordingly, many attacks on privatization decisions focused on issues of corruption and on the preference of associates. For challenges to privatization on this basis in India, see: Delhi Science Forum v. Union of India AIR SC 1356 (1996); Public Interest Litigation v. Union of India 8 SCC 606 (2000). 20   See HCJ 731/86 Microdaph Ltd v. The Electricity Corporation 41(2) PD 449 (1987). 21   See CA 294/91 The Burial Society ‘Jerusalem Community’ v. Kastenbaum 46(2) PD 464 (1992).

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Three questions of privatization  541 of whose functions are functions of a public nature’.22 In practice, this definition was narrowly interpreted, leaving outside the Act a private care home under contract with a local authority that provided accommodation to elderly residents.23

3.  THE NEW PUBLIC LAW OF PRIVATIZATION The discussion so far shows that public law doctrines address privatization only partially – they do not offer a comprehensive approach to privatization and deal only with specific aspects. Traditionally, the focus of attention has been the relationship between the privatizing agency and the participants in the privatization process, while the public aspects of privatization have been relatively neglected. In other words, the most ­important ­questions have remained on the periphery. This chapter proposes a more comprehensive approach that follows the three issues presented above – limitations on privatization decisions, the process of privatization, and the regulation of privatization. My analysis will recognize the contributions of scholars who have begun to address the substantive questions raised by privatization, and will also locate the discussion within the broader picture that emerges from the ­distinction between the three stages described. 3.1  The Boundaries of Privatization 3.1.1  Constitutional boundaries The traditional premises of the public law of privatization warrant reconsideration. Privatization decisions are unquestionably a matter of policy and, normally, should not be shifted from the political arena to the constitutional sphere. Nevertheless, I challenge the convention that a decision to privatize is solely a matter of policy. The public/private boundary should be addressed through two forms of analysis – an institution-­based analysis and a rights-­based analysis. The institution-­based analysis asks whether certain activities ought not to be privatized because they are an integral part of the state. The rights-­based analysis asks whether the privatization initiative includes safeguards against infringements of fundamental rights by private agents that assume responsibility for functions formerly performed by public officials. Institution-­based analysis   There is no universal definition of a state’s core activities. Views on this matter differ widely, ranging from the ‘night-­watchman’ conception of the state, whose primary task is to ensure personal safety (Nozick 1992) to notions of a developed welfare state, with a wide spectrum of approaches in-­between: identifying the state with the use of violent force, with activities that signify sovereignty, with s­ upplying public goods, and so forth. The difficulty of formulating a legal position on this matter also reflects the different understandings of the public tasks that are being privatized. In the area of education,

  Section 6(3)(b) of the Human Rights Act 1998.   YL v. Birmingham City Council [2008] 1 AC 95.

22 23

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542  Comparative administrative law for instance, advocates of privatization insist that educational services can be supplied by private entities under state supervision because they perceive education as a product.24 In contrast, opponents of privatization assert that the values of equal and democratic civil education are likely to be eroded if educational services are supplied by private entities, even under state supervision.25 Given the diversity of traditions in this regard, the definition of core government functions that cannot be privatized under any circumstances would thus be relatively narrow, and most privatization initiatives would not be constitutionally precluded. Some constitutional provisions may be interpreted as ruling out the privatization of certain activities, but even they may leave room for experiments. Constitutional texts usually include provisions defining the main branches of ­government – the executive, the legislature and the judiciary. One can read these provisions as implying that a complete privatization of their functions would simply not be possible. In the American context, for example, the Constitution probably implies that Article III courts cannot be privatized,26 and that the power to legislate cannot be delegated to private professionals.27 At the same time, these general provisions do not define the scope of executive functions. For example, should the government provide education through a public education system, or can it also rely on private schools?28

24   Milton Friedman, who endorsed the application of free-­market principles to education, outlined a plan for running private education: ‘Governments could require a minimum level of schooling financed by giving parents vouchers redeemable for a specified maximum sum per child per year if spent on “approved” educational services. Parents would then be free to spend this sum and any additional sum they themselves provided on purchasing educational services from an “approved” institution of their own choice. The educational services could be rendered by private enterprises operated for profit, or by non-­profit institutions. The role of the government would be limited to insuring that the schools met certain minimum standards, such as the inclusion of a minimum common content in their programs, much as it now inspects restaurants to insure that they maintain minimum sanitary standards’ (Friedman 1962: 89). 25   Realizing the civic-­democratic objectives of education is contingent on the way schools are run. Integration, for example, cannot be achieved only by supervising the registration stage, but rather through the ongoing management of the school, including the way it divides students into classes and learning groups (Gutmann 1987: 66–8). According to this approach, state intervention cannot be limited to the prevention of harm or fraud in the quality of the service provided, contrary to Friedman’s example of state regulation of restaurants. As Gutmann explains, ‘Were our public interest in regulating schools as analogous to our interest in regulating restaurants as Friedman suggests, it would be hard to explain why we should subsidize schooling for every child. A necessary condition for justifying public subsidy of schools – but not of restaurants – is the fact that citizens have an important and common interest in educating future citizens’ (ibid: 67). 26   Despite his capitalistic approach, which espouses minimal state intervention in social and economic life, Milton Friedman maintained that one of the state’s most prominent functions is to define and interpret property rights. Coordinating economic activity through a free exchange is based on the premise that we have ensured, through the government, ‘maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework’ (Friedman 1962: 27). This view implies that limitations should be imposed on the privatization of judicial functions. 27   The non-­delegation doctrine (A.L.A. Schechter Poultry Corp. v. United States, 295 US 495 (1935)), may apply here. 28   Scholars have attempted to interpret constitutional texts to infer limitations on privatization, despite the lack of specific provisions. See Beermann (2001: 1509–19, discussing the US

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Three questions of privatization  543 The privatization of prisons illustrates the relatively opaque nature of constitutional texts on these matters. Do constitutional texts on executive power imply that the executive branch must perform functions traditionally associated with sovereignty? This argument was raised in Israel in a petition seeking to challenge the first attempt to establish a private prison in the country.29 In the US, the question of what functions are ‘­inherently governmental’ is not asked at the constitutional level but in the context of applying Circular A-­76, which uses this terminology to define limits on contracting-­out (Verkuil 2007: 125–7). In any event, this argument is obviously relevant only to some ‘core’ activ­ ities (such as policing and intelligence services), but not to many others that are at the center of current privatization initiatives, such as education, health, and welfare. Defining a ‘core’ of executive actions risks indirectly legitimizing the privatization of all the functions that do not fall within the definition. In the US, a constitutional analysis of this sort is problematic in the area of corrections because the privatization of prisons is already a living reality.30 Rights-­based analysis    From a human rights perspective, one should ask if privatization initiatives are liable to infringe fundamental rights. Thus, for example, the privatization of enforcement and punishment powers has significant potential to infringe liberty and dignity, because these powers would be exercised by corporations guided by economic incentives against people removed from, and possibly even despised by, society. Arguably, the state could allay this concern with effective administrative supervision over the oper­ ation of the private prison or of other privatized endeavors in this area.31 However, effect­ ive supervision over actions conducted on a daily basis and involving a high degree of discretion and immediacy, such as policing, is not easy to devise.32 Constitution); and Mullan and Ceddia (2003, discussing the Canadian Charter of Rights and Freedoms). 29   HCJ 2605/05 Academic Center for Law and Business, The Human Rights Section v. The Minister of Finance, 63(2) PD 545 (2009). The Israeli Supreme Court refrained from deciding on this aspect of the petition, since the majority of justices were willing to accept it based on arguments that addressed the alleged infringement of the human rights of prisoners. Even so, Chief Justice Beinisch, in the leading opinion of the court, expressed sympathy with the argument stating that the power to detain constitutes part of the ‘hard core’ of executive power, which cannot be privatized. 30   For an overview of the history of the privatization of prisons in the United States, see Gold (1996: 359). See also: Hart et al. (1997: 1151). The privatization of prisons is based on the distinction between the allocation of punishment (through the judicial process), which is not privatized, and its administration, which has been privatized. Even the administration of prisons, however, involves discretionary decisions that affect prisoners’ daily life and discipline. 31   On supervision as a condition for the constitutionality of privatization, see Metzger (2003). 32   A noteworthy example is the failure of the American authorities to supervise the administration of the Abu Ghraib prison in Iraq, which was operated by a private contractor (Schooner 2005). The Israeli Supreme Court has accepted an even more radical view and argued that, in and by itself, the operation of the power to detain by private actors constitutes an infringement of the constitutional rights to human dignity and liberty, even barring specific concerns about effectiveness of supervision. See supra note 29. In other contexts, privatization may affect social rights. For example, when privatization entails charging fees for certain social services, it could affect social rights in systems that recognize such rights. Thus, it may be necessary to examine whether, after privatization, health or education services still guarantee universal access and prevent discrimina-

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544  Comparative administrative law 3.1.2  The ultra vires principle and anti-­delegation presumptions Because privatization is an important policy choice, privatization initiatives should be based on explicit legislative authorization, ensuring that they have resulted from a democratic decision-­making process.33 The traditional application of the ultra vires principle did not insist on specific authorization for privatization decisions. This view should be reassessed for actions that outsource policy-­making and administrative discretion. At the same time, requiring legislation is not sufficient because major privatization decisions have often been based on legislative schemes.34 The privatization process needs to build in additional ­democratic checks at an early stage, as explained below. 3.2  The Decision-­making Process in Privatization The process preceding the decision to privatize is highly significant. It is vital to develop legal doctrines able to guarantee that privatization decisions include public debate, broad participation, and public access to relevant information. The decision-­making process resulting in a privatization decision should take into account its effects on the quality of the services provided to the public and should enable public scrutiny. Discussions of privatization decisions have usually focused on the issue of competition, that is, on ensuring that not only top politicians and their close associates are benefited. From this ­perspective, rules of bidding and contracting are important. By contrast, I argue that reformers should also scrutinize the process preceeding the decision to privatize. Generally speaking, privatization decisions should be grounded in a pre-­formulated policy shaped by processes marked by public participation and freedom of information rights. 3.2.1  A duty to formulate policy Informed decisions regarding privatization ought to require the administration to formulate a general policy on privatization before promoting specific initiatives. Thus, for instance, before entering into a contract with a private education network for the privatization of a specific school, the agency should formulate a policy on the very idea of transferring public schools to private management. The duty to formulate a policy

tion. Nevertheless, privatization of a social service will not necessarily result in a constitutional violation (as when the service is supplied by a private entity that is funded or subsidized by the state). In some ‘mixed’ examples, the potential for rights infringement involves both a civil rights and a social rights aspect, as when the police wish to charge demonstrators for the expense of po­licing  their  demonstration. See HCJ 2557/05 Majority Headquarters v. Israeli Police (12 December 2006). 33   Israeli law, for example, maintains a presumption against the delegation of powers to private  contractors. See: HCJ 2303/90 Filipovitz v. The Registrar of Companies, 46(1) PD 410 (1992). At the same time, the Israeli Supreme Court was willing to accept administrative initiatives aimed at developing market activities, even when these initiatives were not based on an express legislative authorization, when they were presented as additions to the authority’s ordinary public activity (for example, collecting entrance fees for a new municipal park built as an addition to the regular parks operated in the city). See the Raanana Park case, supra note 10. 34   The Israeli law enabling the establishment of a private prison was enacted with hardly any public debate, as was the legislation in the area of workfare.

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Three questions of privatization  545 on privatization shifts the focus from the question of the ‘minimum’ that the state must do; to a duty to justify the change, even when the state continues to provide the required minimum.35 3.2.2  Participation rights Requiring public participation in the decision-­making process that leads to privatization is consistent with the global trend of reinforcing the democratic dimensions of the administrative process.36 To guarantee meaningful participation, privatization initiatives should be publicized long before their implementation, to enable the public to submit comments and objections. Public participation at the formal stage of rule-­making, however, is not enough. Privatization initiatives often involve outsourcing. In those cases, many significant details are set out in the contract with the private entity or even in the tender that preceded it, and not in regulations. Therefore, besides guaranteeing meaningful participation, the tender and the proposed contract must also be suitably publicized, because at least some of their terms are likely to include matters of public significance such as, for example, the terms that define the living conditions of inmates in a privatized prison or the training and professional background of the guards. 3.2.3  Administrative transparency and information rights Meaningful participation must be based on information. To promote the democratization of the privatization process, guaranteeing the public’s formal ability to present views and objections is not enough. Privatization law must also ensure access to information on the details of the privatization tender and of the contract signed with the private agent (both the formal contract and the details of the transaction as carried out in practice). Disclosure of these details is crucial in order to evaluate whether the payment offered for the privatized assets and other business opportunities was appropriate, as well as to monitor both the execution of the contract by the private party and the supervision of the services it provides to the public (when the privatization initiative does not only involve the sale of assets). For example, the quality of the diet that the privatized prison operator is obliged to provide the prisoners is an issue suitable for public debate. The

35   The need for this development in Israeli case law emerged in the debate surrounding a decision to hand over the management of the only public high school in the city of Sderot to a private school network. From the petitioners’ perspective, this decision was especially problematic because of the religious character of the private network. The Israeli Supreme Court rejected the petition in a highly contextual manner, referring to the respondents’ declaration of their intention to maintain the school’s secular character. At the same time, it also added in a more general fashion that ‘Great caution is required when a municipal education authority hands over its responsibilities and the management of an educational institution to an association. . . In this issue, it is appropriate for the ministry of education to formulate a principled stance regarding the policy that guides the author­ ities in this issue.’ HCJ 7947/05 The Chairman of the City of Sderot Parents’ Committee v. Ministry of Education, Culture and Sports (unpublished, 28 August 2005). A caveat is in order: the obligation to formulate a policy does not necessarily contradict the option of including in it gradual and exploratory steps regarding, for instance, beginning with a limited and experimental framework. The objectives and the monitoring process, however, must be defined at the start. 36   For the potential of privatization to curtail participation, see Smith (1993: 213–16).

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546  Comparative administrative law democratization of privatization initiatives must thus be based on the full disclosure of, or at least the guaranteed access to, all details of the contractual relationship with the private entity, ­including the terms of the proposed contract and the terms of the final deal.37 Information on privatizations must be provided both at the government’s initiative and in response to specific requests for disclosure. Agencies may be reluctant to disclose details of their contracts with private entities, in order to protect trade secrets or confidential public information, such as the details of the security system in a private prison. In most cases, however, these contracts ought to be open to public scrutiny in order to facilitate public debate and supervision of the privatization initiative. The presumption should always be in favor of disclosing the contracting details. Therefore, if the government seeks to prevent disclosure, it should be required to provide detailed reasoning in support of its position.38 Just as transparency is the accepted norm in commercial transactions involving a broad public interest, such as the issuing of stock, it should also prevail in privatization projects. 3.2.4  Judicial review of privatization tenders and contracts Some worry that privatization transactions will not provide governments with adequate compensation, especially because political decisions tend to prioritize short-­term revenues. If the transaction is competitive, as in a tender, suitable remuneration is at least partially guaranteed, unlike the case of transactions negotiated in the absence of competition. In addition, courts must be willing to review the value of the consideration, at least in extreme cases, and to apply relaxed standing rules that permit private petitions because identifying those directly affected by inappropriate consideration in privatization transactions may not be easy. Judicial review should also address the question of whether the privatization contract guarantees adequate wages and sets appropriate standards of service. 3.2.5  Securing competition The privatization process should also guarantee competition in the market, either through legislation specific to the privatized market, such as legislation on electricity production and supply, or through the application of the general antitrust law. The goal of promoting competition in the privatized market may conflict with the interests of the government as an asset owner interested in obtaining the highest price. If the sale of government assets is accompanied by monopoly powers, revenues from

37   Compare Feiser (1999: 55–62, offering to expand the implementation of the Freedom of Information Act (FOIA) to ‘private entities controlling information of interest to the public’). To some extent, corporate law may also serve as a basis for disclosure (insofar as publicly traded companies are concerned) (Beermann 2002: 1721–24). 38   One example relates to an Israeli tender for establishing a privatized prison. The Association for Civil Rights in Israel requested access to the tender documents but was only allowed to see some of them at the tenders’ committee offices without receiving a copy. A petition was submitted on this issue, but the litigation led to a compromise and ended without a principled ruling. See Adm. Pet. App. 3637/05 The Association for Civil Rights in Israel v. The Finance Ministry (19 December 2005, unpublished).

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Three questions of privatization  547 the sale are expected to rise, but the result can be low level and expensive services. Rules should therefore seek to counterbalance the government’s incentive to sell without making provisions for competition. One option might be a duty to obtain professional assessments of the effects of the planned privatization on the market. Although this procedure may not, and perhaps should not, prevent the sale of monopolies, the state should take the implications of such a transaction into account. Any decision regarding the sale of a government company that enjoys aspects of exclusivity, be they few or many, places the government in an obvious conflict of interest between its ambition to maximize profits and the public interest in competition.39 In these circumstances, the government should not decide this matter alone, and the power to define the applicable competitive aspects of the proposed privatization should be vested in an independent antitrust agency. 3.2.6  Privatization by omission and its unique hurdles Privatization by omission – meaning privatization that derives from administrative passivity and leaves the ground open to private operators – raises special questions. Inaction is harder to review than action, despite their similar implications. For instance, in a decision to privatize a public hospital, one might ask what would happen if the government, rather than selling the hospital, instead closed the only public hospital in the area while simultaneously enabling a private hospital to start operating. An even more complex case would be one where the government intentionally abstains from building new schools given the adequate supply of private schools. Judicial review is thus vital, even in situations of administrative passivity, and the court might find that the government has refrained from inquiring whether the available public institutions meet the needs of the public. 3.3  The Regulation of Privatized Functions and Activities Finally, the ongoing regulation and supervision of privatized bodies and functions is of paramount importance.40 Cumulative experience shows that the success or failure of privatization initiatives correlates with the quality of the regulation that accompanied them (Prado 2008). Assuming that many areas of public activity will be privatized notwithstanding the controversy surrounding privatization, long-­term regulation is a crucial issue.41 Regulation should set standards for the operation of privatized activities. The 39   A potential conflict of interests exists even when the company is owned and operated by the government. However, it is exacerbated by privatization if the government wishes to maximize profits from the sale of its assets. An additional fear is the private body’s future exploitation of its monopoly power. 40   As Justice Zamir of the Israeli Supreme Court explained: ‘The state’s abdication of the duty of supplying services and necessities must be followed by supervision of the private sector’s supply of services and necessities. The open market gives the private sector an opportunity to accumulate great economic power. Economic power can also corrupt. . . and especially in free market conditions, the state is required to protect the weak.’ See HCJ 7721/96 Union of Insurance Assessors v. the Inspector of Insurance 55(3) PD 625, 650 (2001). 41   For an argument in favor of focusing on the supervision of privatized bodies in the US context, see Minow (2000).

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548  Comparative administrative law potential for criminal sanctions42 and tort actions43 in cases of grave infringements of rights is important, but not sufficient, and regulation should take various forms: direct application of constitutional duties, statutory regulation, and regulation through conditions in the tender and in the contract. The objective of this part of the analysis is to examine the potential of ‘publicizing’ privatized bodies, that is, subjecting them to public norms and public supervision (Freeman 2003). 3.3.1  Regulation through constitutional standards When private actors function as de facto substitutes for the government in fulfilling important public functions, they should be subject to duties similar to those that would have applied to the government had it performed the same activities. The doctrinal way to achieve this goal may vary among legal systems, in accordance with their views on the application of constitutional principles to private actors. In the US context, the way to achieve this goal could be based on the state action doctrine, which applies, in principle, also to private actors that perform traditional functions of the government or work in close connection with it (Barak-­Erez 1995). However, the relatively narrow interpret­ ation of this doctrine in the case law, which applies it only to a relatively small core of governmental activities, poses a problem. Although this narrow interpretation would not be a barrier to the application of constitutional standards to private actors performing traditional military functions, this would not be the case with respect to many other privatized activities (Barak-­Erez 1999a).44 Substantively, a private corporation should be considered a government-­affiliated entity when, de facto, it serves as a replacement for a public operation (for instance, when it is the only private school in a locality without a public school)45 or when the extent of the authorities’ intervention in the management of the private body is significant (for instance, through meaningful funding of the private operation). This definition will enable the application of public law to private bodies that

42   An interesting question in the context of criminal law is whether special offenses that have traditionally applied only to public officials, such as bribery, are pertinent to employees of private corporations who perform public functions. See, for example, in Israel: Crim. F. H. 24/08 Barak Cohen v. The State of Israel (unpublished, 2 March 2009). 43   For an action involving a privatized prison, see Richardson v. McKnight, 521 US 399 (1997). In this case, the US Supreme Court declined to apply to employees of a private prison the qualified immunity that would have applied to employees of a government prison in similar circumstances. 44   See, for example, Blum v. Yaretzky, 457 US 991, 1008–12 (1982) (holding that a private nursing home’s decision to discharge or transfer Medicaid patients to a lower level of care without notice and without opportunity for a hearing did not constitute state action, despite state funding, licensing, extensive regulation of facilities, and specific regulations requiring periodic reassessment of patients’ needs); Rendell-­Baker v. Kohn, 457 US 830, 840–43 (1982) (finding no state action on the part of a private high school to which almost all students had been referred from public schools, despite extensive state regulation and funding of the private school). Only rarely does the US Supreme Court treat private parties as state actors. See: Brentwood Acad. v. Tenn. Secondary Sch. Athletic Ass’n, 531 US 288, 291 (2001) (holding that a private association incorporated to regulate an athletic competition between public and private secondary schools can be considered a state actor for First Amendment purposes). 45   This standard requires one to decide whether to define certain services as public. One option is to ask whether the private operation substitutes for a public operation by providing a service that is considered a basic social right, such as health or education.

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Three questions of privatization  549 replace the government and will do so without infringing on the freedom of corporations that operate alongside the authorities rather than instead of them (such as, for instance, afternoon complementary education in private frameworks). 3.3.2  Statutory regulation Statutes that enable privatization should include provisions stating the duties and the supervising mechanisms incumbent on private actors. Effective review of decision-­making processes in privatized bodies must be a significant factor when evaluating the constitutionality of a privatization initiative. A detailed statutory regulation is also a valuable investment because the drafting process is likely to expose the difficulties of effective supervision and may even lead to a reconsideration of the decision to privatize. Another factor arguing for a statutory framework law is that privatized activities are often operated by large multinational corporations that may be relatively insensitive to public criticism unless bound by legal rules. Statutory provisions should also address decision-­making processes within privatized bodies. It may be appropriate to apply public law norms to such matters as granting the right to a hearing to those dependent on the company’s decisions and the right to receive information (to enable public debate regarding its operations).46 A further issue requiring regulation is the management of public databases by computer systems and private information technology companies. Although assistance from private bodies for database management belongs to the technical and allegedly non-­ problematic sector of privatization, control of information has significant consequences for the public sphere. First, the private operation of government databases could limit public access to information. Second, citizens must be guaranteed the right to correct possible ­inaccuracies in their files when managed by private contractors.47 3.3.3  Contractual regulation The privatization contract should also play a central role in the regulation of the privatized activity.48 The duties of the private entity, ­especially with regard to the protection of human rights, should be defined both in the tender and later in the actual contract. Concerning the tender, broad standing in court should be established to permit challenges to decisions that ignore the original terms of the tender. Concerning the contract, several points bear emphasis. First, the privatization contract can set the terms of employment and the wages of workers employed by the private contractors. The contract should ensure that the efficiency of the privatization project does not result from the violation of employees’ rights or from the employment of staff lacking proper skills and training. Second, the privatization contract should include provisions on equal access to the privatized services, making non-­compliance with any of these conditions a breach of contract. In some cases, the privatization contract should also create a supervision mechanism for the prices charged by the private entity. The privatization endeavor is often intended to 46   In other contexts, such as the privatization of utilities, regulation may concentrate on other issues such as, for example, equal access and universal provision (Prosser 2000). 47   See also O’Harrow Jr. (2005: 125–9; addressing the problem of unreliable private databases in the US). 48   For an analysis of privatization contracts as relational contracts, see Davidson (2006).

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550  Comparative administrative law release the government from the need to set prices, by transferring this process to the market. Some privatized activities, however, are not subject to market competition, or at least not to a sophisticated one. Moreover, the supply of vital services should be guaranteed even for those who cannot afford to pay. In the context of social and welfare-­related services, the contract should also include detailed provisions regarding the procedural rights of the privatized services’ recipients, such as hearing rights, rights to examine information, and so forth. The privatization contract should also regulate the compensation due to the private contractor if and when the government decides to terminate the contract. This is a point of crucial importance, because the danger of incurring significant costs in the event of withdrawal from a privatization initiative may lead the government to refrain from action even when it concludes that the initiative has failed to achieve its goals or has led to other unwanted consequences.49

CONCLUSION Privatization is likely to continue to be a central phenomenon in the economic and social life of many countries, and public law must address it as such. This chapter attempted to do this by distinguishing between three spheres: the boundaries of privatization, the privatization process, and the regulation of privatized actions. It also called for an analysis that extends beyond the commercial and efficiency aspects of privatization policies to include their impact on full citizenship and on government-­citizens relations. This expanded focus should be the core of the ‘new’ public law of privatization.

REFERENCES Alexander, Klint, and Kern Alexander. 2004. ‘Vouchers and the Privatization of American Education: Justifying Racial Resegregation from Brown to Zelman’, University of Illinois Law Review, 2004: 1131–53. Barak-­Erez, Daphne. 1995. ‘A State Action Doctrine for an Age of Privatization’, Syracuse Law Review, 45: 1169–92. Barak-­Erez, Daphne. 1999a. ‘Civil Rights in the Privatized State: A Comparative View’, Anglo-­American Law Review, 28: 503–34. Barak-­Erez, Daphne. 1999b. ‘Constitutional Limitations on Privatization in Israel’, Alfredo Mordechai Rabello, ed., Israeli Reports to the XV International Congress of Comparative Law, Jerusalem: Harry and Michael Sacher Institute for Legislative Research and Comparative Law, 317–32. Barak-­Erez, Daphne. 2001. ‘Human Rights in an Age of Privatization’, Labor, Society and Law, 8: 209–24. Barak-­Erez, Daphne. 2006. ‘Applying Administrative Law to Privatization in Israel’, Alfredo Mordechai Rabello, ed., Israeli Reports to the XVI International Congress of Comparative Law, Jerusalem: Harry and Michael Sacher Institute for Legislative Research and Comparative Law, 47–68. Barak-­Erez, Daphne. 2009. ‘The Privatization Continuum’, Private Security, Public Order, Simon Chesterman and Angelina Fisher, eds., Oxford: Oxford University Press, 71–85. Beermann, Jack M. 2001. ‘Privatization and Political Accountability’, Fordham Urban Law Journal, 28: 1507–57.

49   This consideration jeopardizes, for example, the possibility of effective supervision of a private prison. In principle, privatization contracts in this area may grant the state a step-­in right, but the government might be deterred from relying on this provision if the expected compensation to the private concession holder is excessive.

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Three questions of privatization  551 Beermann, Jack M. 2002. ‘Administrative-­law-­like Obligations on Private[Ized] Entities’, UCLA Law Review, 49: 1717–37. Coase, Ronald H. 1974. ‘The Lighthouse in Economics’, Journal of Law and Economics, 17, 357–76. Davidson, Nestor M. 2006. ‘Relational Contracts in the Privatization of Social Welfare: The Case of Housing’, Yale Law & Policy Review, 24: 263–316. Diller, Matthew. 2000. ‘The Revolution in Welfare Administration: Rules, Discretion, and Entrepreneurial Government’, New York University Law Review, 75: 1121–220. Feiser, Craig D. 1999. ‘Privatization and the Freedom of Information Act: An Analysis of Public Access to Private Entities Under Federal Law’, Federal Communications Law Journal, 52: 21–62. Freeman, Jody. 2003. ‘Extending Public Law Norms through Privatization’, Harvard Law Review, 116: 1285–352. Friedman, Milton. 1962. Capitalism and Freedom, Chicago: University of Chicago Press. Gillette, Clayton P. 1996. ‘Opting Out of Public Provision’, Denver University Law Review, 73: 1185–220. Gold, Martin E. 1996. ‘The Privatization of Prisons’, Urban Lawyer, 28: 359–99. Gutmann, Amy. 1987. Democratic Education, Princeton: Princeton University Press. Hansen, Janna J. 2003. ‘Limits of Competition: Accountability in Government Contracting’, Yale Law Journal, 112: 2465–507. Harden, Ian. 1992. The Contracting State, Buckingham, Philadelphia: Open University Press. Hart, Oliver, Andrei Shleifer, and Robert W. Vishny. 1997. ‘The Proper Scope of Government: Theory and an Application to Prisons’, Quarterly Journal of Economics, 112: 1127–61. Malinsky, Laura A. 1996. ‘Rebuilding with Broken Tools: Build-­operate-­transfer Law in Vietnam’, Berkeley Journal of International Law, 14: 438–64. Metzger, Gillian E. 2003. ‘Privatization as Delegation’, Columbia Law Review, 103: 1367–502. Minow, Martha. 2000. ‘Partners, Not Rivals?: Redrawing the Lines between Public and Private, Non-­profit and Profit, and Secular and Religious’, Boston University Law Review, 80: 1061–94. Mullan, David, and Antonella Ceddia. 2003. ‘The Impact on Public Law of Privatization, Deregulation, Outsourcing, and Downsizing: A Canadian Perspective’, Indiana Journal of Global Legal Studies, 10: 199–246. Nozick, Robert. 1992. Anarchy, State and Utopia, New York: Basic Books. O’Harrow, Robert Jr. 2005. No Place to Hide, New York: Free Press. Prado, Mariana Mota. 2008. ‘The Challenges and Risks of Creating Independent Regulatory Agencies: A Cautionary Tale from Brazil’, Vanderbilt Journal of Transnational Law, 41: 435–503. Prosser, Tony. 1997. Law and the Regulators, Oxford: Oxford University Press. Prosser, Tony. 2000. ‘Public Service Law: Privatization’s Unexpected Offspring’, Law & Contemporary Problems, 63: 63–72. Rose-­Ackerman, Susan. 1999. Corruption and Government: Causes, Consequences, and Reform, Cambridge, UK: Cambridge University Press. Schooner, Steven L. 2005. ‘Contractor Atrocities at Abu Ghraib: Compromised Accountability in a Stream­ lined, Outsourced Government’, Stanford Law & Policy Review, 16: 549–72. Smith, Steven Rathgeb. 1993. ‘The New Politics of Contracting: Citizenship and the Nonprofit Role’, in Helen Ingram and Steven Rathgeb Smith, eds., Public Policy for Democracy, Washington, DC: Brookings Institution Press, 198–260. Starr, Paul. 1988. ‘The Meaning of Privatization’, Yale Law & Policy Review, 6: 6–41. Stevenson, Druvi D. 2008. ‘Privatization of State Administrative Services’, Louisiana Law Review, 68: 1285–312. Trebilcock, Michael J., Ronald J. Daniels, and Malcolm Thorburn. 2000. ‘Government by Voucher’, Boston University Law Review, 80: 205–32. Van Zandt, David E. 1993. ‘The Lessons of Lighthouse: “Government” or “Private” Provision of Good’, Journal of Legal Studies, 22: 47–72. Verhoeven, Amaryllis. 1996. ‘Privatization and EC Law: Is the European Commission “Neutral” with Respect to Public versus Private Ownership of Companies?’, International & Comparative Law Quarterly, 45: 861–87. Verkuil, Paul R. 2007. Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do About it, Cambridge, UK: Cambridge University Press.

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33.  Contracting out and ‘public values’: a theoretical and comparative approach Jean-­Bernard Auby

When ‘public tasks’ are entrusted to private actors through contracts – be they ‘Private Finance Initiative’ (PFI) contracts in Great Britain, ‘concesiones de obras publicas’ in Spain, ‘délégations de service public’ in France, public-­private partnerships of various kinds elsewhere – how can we ensure that these tasks are performed in ways that respect ‘public values’? By that, I mean, of course, the core legal principles that public bodies must themselves respect when they act directly. These principles are both substantive (such as respect for fundamental rights, transparency, non-­discrimination, or proportionality) and procedural (such as due process, or notice and comment rulemaking). This question is neither quite new nor particularly old. It raises intellectual and legal conundrums that administrative law must confront if it is to respond to current developments in state/ society relations. It is, one might say, a characteristically post-­modern administrative law question. The chapter is organized as follows. Section 1 defines the basic, generic risks inherent in contracting out, so that my comparisons can really focus on comparable matters. Section 2 argues that one must distinguish between two different – although related – problems: those that concern applicability and those that concern enforcement. Section 3 then claims that all legal systems, and, most importantly, all systems of administrative law, find these problems difficult to solve effectively. In conclusion, Section 4 sketches out some hypotheses that could explain why administrative law systems have that difficulty.

1. CONTRACTING OUT: THE RISK OF PUBLIC VALUES AVOIDANCE 1.1  The Concept of Contracting Out Can lawyers coming from different jurisdictions agree on the meaning of ‘contracting out’? Perhaps, but only if they acknowledge that the concept refers to all types of situ­ ations in which the state contracts for public functions with entities that are not themselves public authorities. Of course, in any particular system at any one time, drawing a clear line between what is, and what is not, a public function can be difficult. Nevertheless, all major legal ­traditions permit private entities to perform some ‘public’ functions. Thus, the common law tradition includes an old case-­law on regulation of public utilities (Guttman 2000) and some civil law systems have long incorporated concession mechanisms (Cossalter 2007). As long as one does not equate contracting out with privatization, no major disagree552 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 552

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Contracting out and ‘public values’  553 ment remains about what the phenomenon entails. In most legal systems, privatization refers to the asset sale of state-­owned industries. By contrast, contracting out mechanisms entrust a private entity with a task that remains under public supervision and is not purely left to the market. That said, public authorities externalize some of their duties using a range of legal forms, and these forms can vary significantly even within a particular system.1 But in using the term ‘contracting out’ here, I restrict myself to arrangements that are based upon a contract. I thus exclude externalization based on legislation or a unilateral ­governmental decision.2 Another definitional difficulty remains: distinguishing between the contracting out of public duties and pure procurement contracts. As Alfred Aman (2005) puts it, the latter entails ‘contracting for commercial services necessary to carry out agency duties’, whereas the former includes ‘outsourcing the very duties the agency was created to undertake or fundamental responsibilities that flow from these duties’. Making this distinction is not always an easy task, as is very well shown by the difficult problems faced when courts seek to separate contracts subject to the European law on procurement from other contracts – often of the ‘contracting out’ type (Bovis 2006). 1.2  The Rise of Contracting Out Even if contracting out existed in earlier periods,3 it has flourished since the 1970s and 1980s in connection with new public management policies that became widespread in all industrialized countries in the second half of last century. In the United States, for example, outsourcing as well as contracting out expanded in such areas as social services, health services, education, water provision, power provision and, as is well known, in prison management (Freeman 2000). In Australia and New Zealand, the same kind of policy was applied to prisons, health services and education (Domberger and Hall 1996, Saunders and Yam 2004). In Great Britain under Thatcherism and continuously afterwards – even if with noticeable interruption – governments have followed a firm policy of promoting, and even in some cases requiring, public entities to externalize any activities susceptible to more efficient performance by private agents. Local governments were particular targets. They were obliged by a 1988 statute to weigh the respective benefits of direct service provision versus contracting out each time they undertook a new activity. Legislation soon followed concerning the outsourcing of various state activities, such as prisons, roads and bridges. The central government attempted to provide overall economic and legal shape to these

1   The forms also evolve over time. For example, in Europe the new forms of public-­private partnerships that are developing are often significantly different from the more traditional concession-­ type forms of externalization. 2   The concept of ‘contracting out’ also excludes situations in which a particular public duty is entrusted to a specialized public agency. Even though this situation does not remove the duty in question from the public apparatus, in some systems it is still understood as a form of externalization. 3   In the United States, Daniel Guttman (2000) traces some examples from the first decades of the 20th century.

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554  Comparative administrative law various forms of externalization, most prominently through the framework called the ‘Private Finance Initiative’ (PFI) (Auby 2007a). In France, from the 1980s on, a similar trend of contracting out public duties was discernible, particularly apparent, once again, at the local government level. In the early 1980s, France adopted significant decentralizing reforms, giving local authorities full responsibility for public services that previously were only partly under their responsibility, if at all. Quite often, local governments opted not to operate these activities directly, but instead to entrust private companies with their provision, most importantly in fields such as water provision, transport and waste management. In the late 1980s, central governmental authorities attempted to extend externalization to certain of their own public services, although with more limited success (Richer 2008). What is striking is that these contracting out practices did not exclude core functions of the state, including duties normally understood as characteristic of sovereignty. This includes security missions as well as, as previously mentioned, prison management. As Donald Kettl (1993) has noted, almost all types of services have been subject to ­contracting out somewhere in the world. One must also realize that the contracting out has not been limited to the domestic sphere; it has also developed at the international level. Laura Dickinson (2006), in particular, has given a remarkable account of the evolution of contracting out in the international realm, in two major respects. First, some states contract out portions of their foreign aid policies, as well as some diplomatic functions, and even core military functions. The United States thus entrusted private companies with certain key security functions in Iraq. And Sierra Leone has even used private contractors to engage in direct combat. Second, international institutions also have begun to outsource some of their duties. A prime example is the United Nations High Commissioner for Refugees (UNHCR), which has entered into partnerships with hundreds of NGOs around the world for services including refugee protection, community services, field security, child protection, ­engineering and telecommunications in emergency relief situations. At the regional level, the European Union provides another important example. The EU frequently externalizes the implementation of some of its policies, in particular in the development area (Craig 2006: 52 ff., Auby 2007b, Péraldi-­Leneuf 2009). It often channels its aid to developing countries through local entities, termed ‘non-­state actors’ in the EU jargon.4 A recent regulation on food-­aid policy and food-­aid management and special operations in support of food security defines the conditions that non-­profit-­making non-­governmental organizations must meet in order to be eligible to obtain Community financing for food-­aid operations.5 1.3  Public Values? Obviously, the concept of ‘public values’ is subject to debate, especially in comparative terms. For purposes of this discussion, let us understand the concept as referring to

4   See Communication from the Commission of 7 November 2002 on participation of non-­state actors in EC development policy, COM(2002) 598 final. 5   Council Regulation (EC) no. 1292/96 of 27 June 1996.

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Contracting out and ‘public values’  555 general legal limitations that govern public bodies when they act to protect the rights of the citizens and the interests of the society as a whole. Public values are not, however, just about limitations but also about privileges. A problem could arise, for example, if a contracted-­out entity seeks to claim the privileges and immunities that public officials enjoy (Guttman 2000). That is not, however, the issue we consider here. Public values may be either substantive or procedural. Procedural values relate to the way public authorities must decide or the processes through which they must act. Due process and reason-­giving are prominent examples. Substantive values relate to the content of public decision-­making: proportionality and respect for human rights, for example. Obviously, there is some degree of overlap between the two categories. Some fundamental rights may interfere with administrative procedures and act as limits to the possible content of decisions: freedom of speech, for example. Nevertheless, the distinction gives one an idea of the range of limitations encompassed within the concept of public values. Because domestic public law has a longer history, one can find a wider consensus regarding the meaning of public values at the domestic level. The inventory varies from one system to another, but along some rather constant lines. On the procedural side are rules concerning due process, fair hearing, reason-­giving and the like, as well as transparency, access to information, limits on conflicts of interest and corruption (Freeman 2000, Guttman 2000). On the substantive side are rules regarding respect for the fundamental rights of citizens, proportionality, non-­discrimination, respect for pluralism, perhaps even subsidiarity (Minow 2002). In the international realm, until quite recently, public values of the type we are discussing would have been confined to humanitarian law, complemented by treaties concerning crimes of war, genocide and so on. Today, a vast array of international rules concerning human rights provides an additional source of public values. Furthermore, a trend is progressively revealing itself whereby international bodies submit themselves to principles similar to those that apply to internal administrative bodies, and not only those concerning human rights. It is one of the purposes of the ‘Global Administrative Law’ movement to explore and promote the application of such principles (Kingsbury et al., 2005). At the regional level, it is now broadly recognized that European Union law includes an administrative law dimension, with principles very similar to the public values that apply to domestic public bodies (Schwarze 2006, Auby and Dutheil de la Rochère 2007). 1.4  The Threat to Public Values Contracting out can be, and sometimes effectively is, a means of extending the application of public values to privatized service-­providers. Public contracts are sometimes used as a regulatory tool to impose some public principles on private bodies where these principles would not normally apply. Respect for public values is simply included in the contractual obligations (Freeman 2000, McCrudden 2007). This possibility does not mitigate the reverse problem: unless the contract is specific, contracted-­out public duties and the entities which are entrusted with delivering them tend to escape the application of public values. Strikingly, it is in those countries where recourse to contracting out has been most widespread that scholars have raised the threat to public values most vigorously. The

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556  Comparative administrative law c­ ollective volume edited by Michael Taggart (1997) exploring ‘the province of administrative law’, as well as the work of Mark Freedland (1994, 1998) on the British PFIs, raised the seminal alarms. More recent work has stressed how, in an increasing number of cases, outsourcing occurs in contexts where harms to fundamental rights are particularly likely: for example, education, health-­care and prisons (Aman 2005, Minow 2002). Similar concerns arise in the international context if military or quasi-­military functions are outsourced or where development aid tasks are externalized.6

2.  A TWOFOLD PROBLEM: APPLICABILITY, PROCESSES Of course, one approach to the problem of contracting out and public values is to define more clearly in legislation those areas which may not be contracted out – perhaps a list of core governmental functions or a catalogue of public tasks whose execution affects human rights in a particularly sensitive manner. In French law, for example, there is some case-­law – not much, but some – concerning the kind of public tasks that administrative authorities cannot transfer to entities pursuant to contrats de délégation de service public. The central concern of this jurisprudence pertains to what French administrative law calls police administrative, which includes, more or less, those activities that entail command and control regulation, excluding those situations where offences have been committed. In English law, the Deregulation and Contracting Out Act of 1994 (1994, chapter 40) attempted to list core public functions that cannot be contracted out, including those interfering with individual liberty and those entailing the power of entry into, search or seizure of any property. In the United States, the Fair Act of 1998 also defines inherently governmental functions which cannot be externalized, including those which can significantly affect the life, liberty or property of private persons. Supreme Court decisions have also suggested that some governmental functions, such as tax collection or fire and police protection, might be non-­delegable (Freeman 2006, Verkuil 2006). However, experience suggests that such efforts are often unreliable. Because these lists are defined by legislation, they can be overturned by subsequent legislation. Perhaps more importantly, they often rely upon such vague standards that it is not difficult for governments that seek to contract out to claim that the standards do not apply to their project. Nevertheless, the problem remains of developing legal methods to promote respect for public values by private entities operating public functions pursuant to contract. This raises a question of applicability (A) and a question of enforcement (B).

6   A quite original situation is ICANN, which is basically contracting out with the US g­ overnment, but also has a strategic role in the matter of Internet Domain Names. That makes it a particularly apt example of the problem we are trying to analyze (see Froomkin 2000).

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Contracting out and ‘public values’  557 2.1 The Problem of Applicability: Bring in Contracted-out Entities within the Orbit of Public Values Let us start with the idea that, normally, private entities need not comply with public values in the same manner as a public agency. Sometimes, of course, similar principles apply to both public authorities and private sector entities (for example, prohibitions against discrimination based on race or sex, rules on trade unions). But the substantive and procedural public values to which public entities are subject have not been designed to apply to private entities. The function of public values is to protect society against the state and its abuses, not to protect society from private entities. We recognize here the well-­known issue of the potential ‘horizontal’ effects of human rights. Under limited exceptions, to which we return below, human rights norms generally have only ‘vertical’ effects, and as such, private parties may only invoke them against public authorities. This rule holds not only in the domestic but also in the international context. A prime example is the European Convention on Human Rights, which, under the prevailing case-­law of the European Court of Human Rights, does not have ­horizontal effects.7 We must also realize that, given the nature of private entities, it is difficult to subject them to public values (like transparency) which normally apply to government functioning. Transparency rules are particularly difficult to replicate in the private context because information generated by private entities may constitute ‘proprietary’ information, while information generated by public bodies is ‘owned’ by the public (Mashaw 2006). Moreover, public-­private distinctions also have a bearing on any limitations we might fairly impose on transparency, for example, ‘business’ secrets versus ‘diplomatic’ secrets. Therefore, the imposition of public values on private entities performing public functions under a public contract is a special case. It requires the development of a legal framework in order to extend the applicability of public values to the private realm. There are four mechanisms by which to accomplish this task: (a) The outsourcing contract itself, which may include requirements that the contractor respect a range of public values. In this case, the applicability of public values becomes a matter of contractual negotiation. (b) Legislation (including, perhaps, the Constitution) may explicitly require the application of a range of public values to private entities that carry out public duties pursuant to contract. This may include the incorporation of public values into general private law (for example, commercial law or the law on non-­profit associations), as well as special provisions concerning entities which perform public tasks. (c) Judicial decisions may hold that a private entity operating pursuant to a public contract should be treated like a public body for the purpose of applying some public value because of the function the private entity assumes and/or because of the links it has with public institutions. (d) A fourth route for incorporating public values is to make sure that they are

7  ECtHR, Young, James and Webster v. the United Kingdom, Judgment of 13 August 1981 (App. No. 7601/76; 7806/77).

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558  Comparative administrative law i­ncorporated in self-­regulation mechanisms. Public authorities could then contract out only with entities which voluntarily submit themselves to self-­regulation that enshrines respect for some public values. The same methods are potentially available in the international area with two qualifications. In the international context, of course, legislation is not made in the same way, and the extension of public values to private entities in the international field could result from either international agreements or domestic legislation. Similarly, any judicial extension of public values could take place within either international or domestic forums. 2.2  The Problem of Enforcement: Who and How? Who is in a position to hold contracted-­out entities to account when they violate public values? It is not enough to determine possible ways in which public values can apply to contracted-­out entities. Law is not just a matter of substance. It is also crucial to determine by whom and through what kind of procedures these entities can be induced to respect those values. To the first aspect of the question, the answer seems to be as follows: (a) The first protector of public values should be the contracting public authority. It can play that role at least insofar as respect for these values has been included in the contract’s provisions. (b) Respect for public values can also be the concern of other public authorities: parliaments, government monitoring agencies, ombudspersons and so on: in short, public authorities in charge of public ethics. (c) Then, there are various types of directly concerned private persons: in particular, users of the contracted-­out service and members of the contracted-­out entity’s staff. (d) Lastly, there is the ordinary citizen whose human rights may be affected by the contracted-­out entity – because her private life is affected. Further, political opponents, civil society associations, etc. may wish to challenge perceived violations of rights. (e) In the international arena, the stakeholders are not very different, but they will often be represented by governments, which are sometimes the only bodies with access to legal fora of control. What are the procedural means through which contracted-­out entities can be induced to respect public values? (a) When respect for public values is part of the outsourcing contract’s provisions, then, the most direct way is simply contractual supervision that includes monitoring the contractor’s respect for public values. When that is not the case, the public authority may have some influence on a private entity that hopes for a contract renewal. (b) In addition, other routes may be available through the courts. If they exist, who has access to them? Is judicial review available for decisions of the outsourced private body or for decisions of the contracting public authority, and who has standing?

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Contracting out and ‘public values’  559 Where public values have been infringed, are there other remedies, in contractual or tortious liability for example, and who has access to them? (c) Outside of court review, other processes may exist to monitor possible violations of public values by contracted-­out entities. For example, contracted-­out activities will sometimes be directly supervised by political bodies: parliaments, governments, bodies made up of governmental representatives in international organizations.   Contractors will sometimes be under the scrutiny of other types of monitoring institutions, which can be general ones, such as ombudspersons or budgetary supervisors or special watchdogs in charge of a particular public service. In some cases, these monitoring institutions will include a representative of third parties, such as consumer protection associations or the users of the contracted-­out public services. (d) In situations where respect for public values is linked to contractor self-­regulation, then it is mainly the industry’s internal procedures that will enforce standards. In some cases, associations of professionals act as a collective guarantor of the public values accepted by their members.

3.  WHAT DOES COMPARATIVE LAW SHOW? Which law will one particular outsourcing contract be subject to? If the public party is a domestic public body, the contract will normally be subject to that country’s law. However, if the private party is a foreign entity, and, in particular, if the contract is to be executed abroad, the – public and private – parties can agree to submit it to another national law, which can be that of the private contractor, that of the place of execution or another body of law altogether. Generally speaking, contracts made by international organizations are subject to the rules which the parties have chosen – in accordance with the principle that governs, for all international contracts by the Rome Treaty of 19 June 1980. Parties can opt for the law of the state where the contract will be implemented or any other law, including the one of the organization. At present, there is a trend to exclude the reference to a national legal system and instead to submit the contract to general principles, possibly of international law (Seyersted 1967). This trend does not apply, however, to contracts made by European institutions, for which one national law is normally chosen (Auby 2007b). That said, even where the one domestic law applies, some international law can be involved as well because the international contracting institution may have a specific legal framework for its own contracts: this is the case for the European Union, whose contracts are subject to special rules, laid down in two 2002 Financial Regulations. For that reason at least – there are others, as we shall see hereafter – the comparative law overview we present is both horizontal – based on national systems of law – and ­vertical – that is, it includes pieces of international law solutions. 3.1  The Problem of Applicability Do outsourcing contracts often actually impose respect for public values on private ­contractors? It does happen on occasion. In the United States, for example, contracts

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560  Comparative administrative law made with privately run prisons will often require compliance with constitutional federal and state standards for prison operations and inmates’ rights (Freeman 2000). We have also already noted that public contracts are sometimes used as regulatory tools, and, in that respect, are sometimes a way of imposing on private parties respect for public law principles that are not normally applicable to them, or are applicable, but with weaker implications. In Australia, for instance, some governmental guidelines subject governmental procurement contracts to a requirement that the bidder conforms to statutes concerning gender discrimination (Saunders and Yam 2004). It is difficult to say, however, if this kind of practice is frequent. Comparative law includes some examples of case-­law where a contracted-­out entity is considered to be a public body for the purpose of applying public law principles. For example, the US Supreme Court, in Lebron v. National Railroad Passenger Corporation,8 held that, because of the way it had been created and the public purposes it pursued, it was appropriate to consider the government corporation in question an ‘agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Government by the Constitution’. Under British law, a similar issue arose regarding the applicability of the Human Rights Act, which was adopted in 1998 in order to transpose into national law the European Convention on Human Rights. The question was whether it applied only to public bodies strictly speaking, or also to private bodies assuming public functions (Bonner and Graham 2002). So far, the House of Lords has refused to apply the Act to private bodies,9 but scholars have expressed the view that it is appropriate to apply the Act to private bodies, at least in some cases (Oliver 1999). The French courts have long accepted that decisions of certain private institutions operating pursuant to a public contract could effectively be of an administrative nature. In those cases, the institutions are subject to review by administrative courts that could then check their observance of public law principles. A famous case, decided by the Tribunal des Conflits in 1968, concerned Air France, then a contracted-­out entity (now entirely privatized).10 It held that an internal regulation adopted by Air France had the nature of an administrative act and thus the administrative courts had jurisdiction over the case. European law provides additional examples of a similar extension of public values to private entities. The European Court of Justice has held that private organizations in charge of public functions could infringe basic principles of European treaties (for example, freedom of circulation, free movement of goods or capital, etc.), even though these principles are normally targeted only at public bodies (Wernicke 2007). There do not seem to be many pieces of legislation that stretch the concept of public values to cover contracted-­out situations, but, still, some examples can be found. Some freedom of information acts apply their transparency rules to private entities in charge of public functions. Thus, the French 1978 ‘loi sur l’accès aux documents

  513 US 374 (1995).   For example, in YL v. Birmingham City Council, [2007] UKHL 27 (House of Lords), a case concerning a person who had been placed in a private care home by the local City Council. 10   Tribunal des conflits (TC) [Conflicts Tribunal],  Epoux Barbier v. Air France, 15 January 1968, Rec. p. 789.  8  9

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Contracting out and ‘public values’  561 a­ dministratifs’ makes the rules applicable to information held by public authorities also applicable to private institutions in charge of a public service. The US Freedom of Information Act is not, by itself, applicable to private institutions, but, in 1998, it was complemented by a ‘Shelby Amendment’, which requires ‘Federal agencies to ensure that all data produced under an award will be made available to the public . . . under the Freedom of Information Act’ (Guttman 2000). Even if it is purely soft law, one international law example can be mentioned. It is the ‘Montreux Document’, adopted in 2008 by 17 states, and which contains rules and good practice, inspired by international humanitarian and human rights law, that should apply to private military and security companies operating in armed conflicts.11 In practice, are public values ever imposed on contracted-­out entities because of ­self-­regulation or private law legislation that replicates those values? It probably does, for example through accreditation mechanisms: public authorities can restrict contracting out opportunities to entities which have received an accreditation and make sure that, among the conditions the companies must meet in order to be qualified, some are related to their observance of public values (for example, concerning their staff’s legal treatment or the way they will treat their consumers). Lack of comparative information on this aspect makes it impossible to say if there are frequent practices of this type. 3.2  The Problem of Enforcement If public values that are included in contractual provisions are infringed, what can the contracting authorities do? They can always ask a judge to hold the contractor contractually liable and possibly ask them to terminate the contract. They can terminate the contract, and possibly, before that, inflict penalties on the contractor by themselves if they have that power under the contract. In some systems, the power of sanctioning the contractor and even of terminating the contract will belong to the public contractor even if it has not been mentioned in the contract. This is the case in the French administrative law tradition – and in jurisdictions whose public contracts law has been inspired by the French tradition, such as Spain, where the power of unilaterally terminating a government contract when it is not respected by the contractor is considered to be the essence of public contracts (Richer 2008). In terms of judicial redresses, substantial variations exist. (a) In jurisdictions where the concept of ‘public law contracts’ is accepted, litigation concerning this kind of contract is dealt with by administrative courts and submitted to the usual procedural and substantive rules of administrative law. There is, however, a significant reservation: in general, administrative courts can only be accessed for challenges aimed at the public party in the contract or for claims made by the public party against its contractor, not for complaints from citizens who are users of the outsourced activity. The latter will, therefore, encounter difficulties in inducing the administration or the contractor to respect their rights, to respect the rules governing the contract and so on.

11   Montreux Document on pertinent international legal obligations and good practices for States related to operations of private military and security companies during armed conflict, United Nations, General Assembly, A/63/467 – S/2008/636.

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562  Comparative administrative law French administrative law provides a partial remedy. In 1906, the Conseil d’Etat ruled that users of a delegated public service could ask the administration to intervene when the company performing the service infringed its contractual obligations and in case of a refusal, challenge the administration before an administrative court.12 Another limitation on citizen redress normally derives from the fact that not all contracts made by public bodies are considered ‘public law contracts’: public authorities also enter into ‘private law’ contracts. Theoretically, litigation concerning the latter comes under the jurisdiction of ordinary courts. However, some of the administrative laws we are referring to here allow partial judicial review in the Conseil d’Etat for decisions that are ‘detachable’ from the overall contract. (b) In jurisdictions where the concept of ‘public law contract’ is unknown, the scope of judicial review, and of corresponding substantive and procedural rules, will obviously be even narrower (Drewry 2000). It will not necessarily be absent, however. In common law systems, in fact, part of the litigation concerning public contracts can be submitted to judicial review: in English law, for example, when the public authority’s contractual capacity is debated, judicial review procedures can be used. This is also possible, according to recent case-­law, in cases initiated by companies whose bid has not been accepted in procurement contracts devolution procedures. Except for these limited reservations, public contracts litigation, in common law systems, does not fall within the perimeter of judicial review. Actually, the techniques of judicial review would probably not be adapted. For instance, some American authors suggest that it would not be possible to extend to contractual litigation the usual deference judges have towards administrative interpretations in judicial review procedures (Freeman 2000). The main flaw commentators point at in the way common law systems deal with public contracts litigation is that, generally speaking, they do not provide citizens who are not parties with efficient remedies if they are affected by the way the contract is implemented. Hence, users of an externalized public service or other affected persons cannot obtain either judicial review or review under the common law. This solution is not absolute, however. For example, US courts have sometimes admitted third-­party beneficiaries to bring breach of contract claims (Aman 2005, Guttman 2000). (c) Is the scope of judicial redress different when it comes to contracting out ­internationally? In practice, the difference does not seem very large since outsourcing contracts made at the international level, whether by state institutions or by international organizations, are generally submitted to one domestic law. Three kinds of complementary remarks must be added, however. First, international case-­law recognizes that, in certain situations, violations of inter­ national law by private entities could lead to their state’s international liability because the latter did not do what it should have to prevent those violations.13 This jurisprudential line can be followed in cases involving infringements of public values by contracted-­out entities.

12   Conseil d’Etat (CE) [Council of State], Syndicat des propriétaires et contribuables du quartier Croix-­de-­Seguey-­Tivoli, 21 December 1906, Rec. p. 962. 13   For example, United States Diplomatic and Consular Staff in Tehran (United States of America v. Iran), Judgment, ICJ Reports 1980, p. 3 (24 May 1980).

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Contracting out and ‘public values’  563 Second, in countries where a universal jurisdiction rule is accepted – in the United States, for example, with the Alien Torts Claim Act – corresponding procedures could apply to a contracted-­out institution charged with breaching humanitarian law for example. Third, in some cases, international courts have jurisdiction over litigation concerning contracts made by international organizations: thus, when contracts made by European Union bodies entail an arbitration clause, the European treaties provide that the European Court of Justice always has jurisdiction. This gives the Court the opportunity to apply principles of European public law. Contracting out is often conducted in a way that is largely out of reach of parliamentary supervision. This is noted frequently by commentators (Freeman 2000, Saunders and Yam 2004) and has been stressed by analysts of British PFI contracts (Freedland 1994, 1998). In some jurisdictions, political and judicial supervision complement each other – or the defects of one are compensated for by the advantages of the other – notably in terms of the protection of citizens’ rights affected by contracted-­out activities, by the possible recourse to ombudsmen, parliamentary commissioners for administration, or médiateurs. In Great Britain, the Parliamentary Commissioner seems to play a significant role in this respect. Commentators from Australia mention a similar situation (Seddon 2009).

4.  CONCLUDING REMARKS All legal systems find it difficult to ensure that contracted-­out public duties are performed in a way which is respectful of basic public values. It is difficult to bring the mixture of public interest and private concerns – which is the essence of contracting out – into the sphere of these public values. The problem seems especially acute in systems in which the concept of a ‘public law contract’ is not accepted: common law systems, some of the continental legal systems as well, such as the German or the Italian. In various common law jurisdictions, an academic debate has arisen about the suggested ‘publicization’ of the public contracts regime. Some authors (Freedland 1994, 1998, Taggart 1997, Davies 2006) argue that it would be a good idea to promulgate special rules for public contracts, in order to help addressing the various difficulties that are conveyed by the rise of contract in the public sphere. These authors suggest that, in particular, this reform would be the best way to ensure that public contracts and contracted-­out public activities incorporate public law values. Are systems in which there is a concept of a ‘public law contract’ – such as the French one – less uneasy on these issues? It is difficult to give a general answer. In those systems, contracts which fit in the concept remain within the orbit of public law and, therefore, normally do not escape from the reach of public law values. For example, in French administrative law, entities which are entrusted with the performance of a public service – by the way of a ‘délégation de service public’ – are supposed to respect some corresponding fundamental principles – equality, continuity, for example – as well as some statutory rules applicable to all entities providing public services, as has been mentioned. However, it would be too optimistic to claim that enforcement of these principles and rules, if infringed by private contractors, is efficiently guaranteed. But one can also ask if ‘in

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564  Comparative administrative law house’ public activities always respect public values. The answer is, of course, negative: this is a matter for regulation, of incentives for contracted-­out activities and for activities carried out ‘in house’ as well.

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Contracting out and ‘public values’  565 Saunders, Cheryl and Kevin K.F. Yam. 2004. ‘Government Regulation by Contract: Implications for the Rule of Law’, Public Law Review, 15: 51–70. Schwarze, Jürgen. 2006. European Administrative Law, London: Sweet and Maxwell. Seddon, Nicholas. 2009. Government Contracts: Federal, State and Local, 4th edition, Annandale, NSW: The Federation Press. Seyersted, Finn. 1967. Applicable Law in Relations between Intergovernmental Organizations and Private Parties, Academy of International Law, Leyden: A.W. Sijthoff. Taggart, Michael, ed. 1997. The Province of Administrative Law, Oxford: Hart Publishing. Verkuil, Paul R. 2006. ‘Public Law Limitations on Privatization of Government Functions’, North Carolina Law Review, 84: 397–470. Wernicke, Stephan. 2007. ‘Au Nom de Qui? The European Court of Justice between Member States, Civil Society and Union Citizens’, European Law Journal, 13: 380–407.

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34.  Organizational structure and culture in an era of privatization: the case of United States military and security contractors Laura A. Dickinson*

Privatization is a central problem for comparative administrative law. Administrative law mechanisms and procedures protect what many scholars have termed core ‘public values’ (Freeman 2000; Auby 2010; Dickinson 2011). When governments privatize functions that their own employees have performed in the past, these public values are often subverted. By transferring tasks to contractors, governments reduce the power of tools such as delegation limits, transparency, insistence on adherence to procedural regularities, and judicial oversight. Designed to constrain governmental employees, many of these mechanisms of accountability and oversight fail to effectively control contractors. Within the United States, scholars and policymakers have long debated the merits of handing over domestic governmental roles—including education, policing, prison management, welfare programs, and health care—to private contractors (Freeman and Minow 2009). Of course, such privatization dates far back in U.S. history, but the trend accelerated in the late twentieth century and prompted new discussion about an ‘Era of Privatization’ (Symposium: Public Values in an Era of Privatization 2003). While some commentators have extolled the cost savings that privatization may bring, others have expressed deep misgivings (e.g., Domberger and Jensen 1997), arguing that privatization threatens to erode legal and democratic accountability (Dolovich 2005). They argue that, because private actors are usually not subject to the constitutional and administrative law norms that apply to governments (Metzger 2003), any purported efficiency gains from privatization may nevertheless weaken mechanisms that protect important public values.1 Others worry that, beyond reducing accountability, privatization fosters structural societal problems such as inequality (Satz 2016). Meanwhile, a middle ground position embraces privatization while seeking new mechanisms for extending public values through contract (e.g., Freeman 2000), democratic participation (e.g., Aman 2004), and other modes of accountability.2 In the past 15 years, this debate about domestic privatization has expanded to include the growing outsourcing of military and foreign affairs. During this period, the U.S. vastly extended the role of military and security contractors to perform a breathtaking array *  An earlier version of this chapter was originally published in Susan Rose-Ackerman and Peter Lindseth, eds, Comparative Adminsitrative Law (Edward Elgar 2010). The revised chapter builds on data and discussion in Laura A. Dickinson, Outsourcing War and Peace: Preserving Public Values in a World of Privatized Foreign Affairs (Yale Univ. Press 2011). 1   And such efficiency gains are themselves a matter of dispute. See, e.g., Sclar 2000. 2   I discuss such alternatives in the context of foreign affairs privatization in Dickinson 2011; 2006; 2005.

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Organizational structure and culture in an era of privatization  567 of functions (Commission on Wartime Contracting 2011). Indeed, at the high point of the conflicts in Iraq and Afghanistan, the U.S. deployed more than 260,000 contractors, a number equaling or even exceeding the number of troops (Commission on Wartime Contracting 2011). And while the overall number of contractors has receded since then, many policymakers agree that they are now a permanent fixture of our military and secur­ity establishment (US Senate 2007; Schwartz 2009), especially as military strategies increasingly turn to cyberwarfare, drones, and other autonomous weapons systems, all areas where contractors routinely play a crucial, though often hidden, role. Other countries, developed and developing, democratic and authoritarian, from the global north and the global south, have also outsourced a variety of foreign affairs functions (McFate 2014; Percy 2008; McFate 2015; Singer 2004). Foreign affairs privatization, and in particular military and security privatization, thus presents significant problems for comparative administrative law. To be sure, the foreign affairs activities of governments, let alone those performed by contractors, may at first blush seem to fall outside the domain of administrative law. The bedrock of U.S. administrative law, the Administrative Procedure Act (APA), famously exempts ‘military and foreign affairs functions’ from its rulemaking obligations (5 U.S.C. § 553(a)). Probably for this reason, many administrative law scholars simply ignore foreign policy agencies such as the U.S. Department of Defense and the Department of State. Yet there is no reason why these agencies should be shielded entirely from the obligation to respect core administrative values of public participation, transparency, and accountability. Indeed, the political impetus for the APA itself derived in part from perceived wartime administrative overreach, and the Administrative Conference of the United States recommended as far back as 1973 that Congress eliminate the exemptions (Administrative Conference of the United States 1973). And while Congress has thus far not acted on the recommendation, even without amendment the APA’s exemption is only for military and foreign affairs functions. It does not exempt the foreign affairs agencies as a whole from the APA. Indeed, as I contend elsewhere, much of what these agencies do might plausibly fall outside the scope of the exemption (Dickinson 2017). For example, when the Defense Department designs a health care system for veterans, or the Army Corps of Engineers supervises construction of a dam, such activities are arguably not strictly ‘military.’ Privatization only augments this claim: as the Department of Defense and the Department of State hand more and more responsibility over to contractors, they turn more and more into regulatory agencies that supervise and manage the vast defense industry. In this context, scrutiny of these agencies’ compliance with administrative law values is entirely appropriate. Yet administrative law mechanisms of accountability and constraint, designed largely before the recent privatization trend, are especially anemic when governments outsource foreign affairs. Although all privatization decisions tend to shield acts from the scrutiny or accountability a government actor would receive, the lack of oversight is even more of a problem in the military context where contract bidding is largely secret and conducted under expedited rules, contract monitors are often absent, even simple recordkeeping is problematic, and the public is less likely to know what is happening on the ground or to put pressure on domestic political actors to address harms to noncitizens overseas. Direct legal accountability is also more difficult (though not impossible) because international courts tend to be too weak and domestic prosecutors are less likely to pursue extraterritorial cases, and because tort suits against private contractors

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568  Comparative administrative law operating in military contexts abroad face a variety of procedural and political hurdles (Dickinson 2011). Of course, some of these problems might be ameliorated by reforming international and domestic legal and regulatory regimes. Indeed, elsewhere I have surveyed the breakdown of formal legal mechanisms of accountability and constraint to control U.S. foreign affairs contractors. And I have suggested new legal frameworks for incorporating ‘public law’ values in the face of privatization, including reform of government contracts, modification of transparency rules, extension of extraterritorial criminal jurisdiction, and reinterpretation of tort liability rules.3 But the problem is much less about the formal legal framework and much more about the subtle ways in which norm compliance actually operates on the ground. After all, legal rules are often followed not because of the formal existence of a norm, but because of more inchoate processes through which relevant actors internalize the norm (Ewick and Silbey 1998). This is particularly true with regard to international law, which is less likely to be enforced through coercive power. Accordingly, foreign affairs privatization offers a useful case study for considering how organizational structure and culture operate to affect compliance with public law values. These questions of organizational theory and the impact of organizations on norm compliance have received insufficient attention within administrative law theory and practice. Yet, they are essential questions if we are to identify the particular attributes of governmental bureaucracies and private corporations that are more likely to lead to protection of ‘public law values’ (e.g., Freeman 2000). In the domestic context, scholars across various disciplines have attempted to isolate structural features of institutions that might make them more or less likely to foster a rule-abiding culture (e.g., Williamson 1995; March 1988; March and Simon 1993; Scott 1987; Simon 1957; Taylor 1984; Meyer and Scott 1983; Powell and DiMaggio 1991; and Rubin 2005). As such, we might fruitfully begin to apply the insights of this organizational theory literature to the comparative (RoseAckerman and Lindseth 2010) and global administrative law discussion (e.g., Kingsbury et al. 2005). Using factors culled from this literature, I develop a lens through which to scrutinize the impact of military and security privatization on organizational structure and culture. I examine the organizational structure and culture of the U.S. military, and in particular the role that uniformed military lawyers have played as ‘compliance agents’ to promote and protect the public values instantiated in international humanitarian law and U.S. military law. Here I draw on qualitative empirical data I gathered through interviews with military lawyers in the Judge Advocate General (JAG) Corps.4 These lawyers, who are regularly embedded with troops in combat and consult daily with commanders, have, to a large degree, internalized the core values inscribed in international law—respect for human rights and the imposition of limits on the use of force—and seek to operationalize those values. Of course, the lawyers are not always successful, and it would be simplistic to assume that their accounts prove that the U.S. military always obeys international law. But their stories strongly suggest that the presence of lawyers on the battlefield can

3 4

  For a longer discussion of possible reforms, see Dickinson 2011.   For a more detailed account of this interview data, see Dickinson 2011, Ch. 6.

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Organizational structure and culture in an era of privatization  569 help produce military decisions that are more likely to comply with international legal norms. Just as importantly, military lawyers seem most likely to function effectively and encourage legal compliance if certain specific organizational features are present. These findings track the organizational theory literature about what makes compliance officers within firms effective. Accordingly, the experience of JAG officers suggests links between organizational structure and legal compliance. Building from this study, I argue that differences in organizational structure and culture (and not just differences in the applicable legal regime) may be a principal reason that the rise of private military firms threatens these core public law values. Thus, if we are to address how to maintain public law values in an era of privatization, we must take seriously the question of organizational structure and culture, its importance, and the ways it might be shaped. Fortunately, we are beginning to see innovative forms of regulation emerging that take organizational structure and culture into account. For example, a recent partnership among private industry, governments, and the human rights community has produced the International Code of Conduct for Private Security Providers and an accompanying oversight mechanism, which, along with the development of industry standards for the secur­ ity industry, offer potential paths forward for promoting and protecting public values within private security contractor firms. To be sure, the jury is still out on precisely how effective these new forms of hybrid regulation will be. Nonetheless, the lens of organizational structure and culture is a useful one through which to evaluate these developments. Part 1 of this chapter introduces basic insights gleaned from the varied, diverse literature on organizational structure and culture regarding which organizational characteristics tend to make compliance agents within organizations, including lawyers, more and less effective. Then, drawing on my study of JAG lawyers operating in Iraq, I emphasize the role that organizational structure and culture play in the effectiveness of these attorneys. Part 2 suggests that, while such organizational structures have often been lacking in the private military and security context, some interesting new reform efforts hold promise because they could help address these organizational structure and culture issues. A brief conclusion identifies other contexts in which an analysis of organizational structure and institutional culture might help open up new avenues of inquiry for administrative law scholars. By taking issues of organizational structure and culture seriously, we can see that fostering greater compliance may sometimes be less a matter of writing new regulatory provisions or increasing judicial oversight and more a matter of subtly influencing organizations and the norms they inculcate. This is a key lesson for administrative law more generally, and it suggests intriguing lines of comparative inquiry both within and beyond particular national systems. And while understanding the processes of norm inculcation can be extraordinarily difficult, only by focusing on these more intangible features of organizational structure and institutional culture can we begin to address a world where states are not the only relevant agents of law compliance, and where private corporations with radically varying institutional structures are frequently the relevant agents of administrative law.

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570  Comparative administrative law

1.  ORGANIZATIONAL THEORY AND MILITARY LAWYERS Despite important work over the past 60 years (e.g. Simon 1957), organizational theory still has not been sufficiently integrated into the study of either administrative or international law. Yet this literature, particularly if further developed to focus on those institutions that apply and inculcate legal norms, holds tremendous promise and could meaningfully reshape many administrative law debates, especially those that concern privatization. Of particular importance to our analysis here is the question of how best to ensure that compliance agents within an organization, such as lawyers, can most effect­ ively help ensure compliance with central rules and values of the organization as well as various public norms. Accordingly, this Part first summarizes some of the core insights in the field regarding successful compliance agents. Then, I will build on my qualitative study of military lawyers to suggest that these lawyers operate within institutional structures that the organizational theory literature predicts would likely have some positive impact on compliance. 1.1  The Importance of Organizational Structure and Institutional Culture Organizational theorists have long recognized that group norms and internal organizational structures can further (or hinder) an organization’s goals, as well as the goals of individuals within organizations. These theorists are a diverse group spanning multiple disciplines, from law (Rubin 2005; Rhode 2000; Abel 1989) to economics (North 1990; Williamson 1996) to sociology (Meyer 1983) to political science (Moe 1995) to anthropology (Douglas 1995). Moreover, they study a wide range of organizations, from corpor­ ations (Hart 1989; Rock and Wachter 2001) to private associations (Abel 1989) to public bureaucracies. Thus, it is difficult to generalize about this literature, and a detailed survey is beyond the scope of this chapter. Instead, I will focus on some of the core structural features within organizations that this literature has identified as important in helping to ensure a culture of compliance with external norms, such as legal rules. To begin, it is clear that the formal governance structure of an organization is key (March 1988; March and Simon 1958; Scott 1987; Simon 1957; North 1990; Williamson 1996). Thus, leaders within an organization can define and seek to fulfill the ­organization’s purposes by giving formal incentives and setting penalties (Williamson 1995). Other structural factors are also important. For example, Serge Taylor (1984) has argued that the ability of compliance personnel to monitor lower-level employees and then report back to higher-level employees within the firm increased compliance. As Ed Rubin describes (2005, 374), without such a compliance program: an employee who decides to engage in legally risky behavior. . .may have nagging doubts about the wisdom of doing so, but will suppress some of those doubts in reporting to his superior, who will, in turn suppress some of the doubts that were expressed to her in reporting to her superior.

Accordingly, the existence of a compliance unit, combined with the ability of compliance employees to report misconduct up a chain of command independent of the operational employee management chain, may thereby enhance compliance. Beyond simply the formal organizational structures are the informal institutional features that can help build (or undermine) a culture of compliance. As Walter Scott notes

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Organizational structure and culture in an era of privatization  571 (1995, 39), ‘shared values and meanings, internalized by participants, [can] constitute a strong system of control, much more powerful than one based exclusively on material rewards or on force’ (Scott 1995, 39). The critical point, here, is that culture matters, that it varies across organizations, and that ‘[w]hat the individual is going to want is not entirely his own idea, but consists largely of the kinds of ideas the social environment inspires in him’ (Douglas 1995, 102). Meanwhile, the organization itself may also be affected by outside influence. Scholars of corporations, for example, have considered whether elements of national culture have an impact on individual and group behavior within particular firms (Pascale and Athos 1981; Tasker 1987; Litt et al. 1990). Sociologist John Meyer has examined how norms within professional educational associations influence an organizational member’s practices (Meyer 1983; Meyer and Rowan 1991). Meyer and others also note the existence of ‘global scripts,’ whereby institutions begin to speak about their organizations in similar terms based on a prevailing influential narrative (Benavot et al. 1991, 145). International law scholars Derek Jinks and Ryan Goodman have argued that states follow such scripts promulgated through the international system in making and implementing treaty obligations (Goodman and Jinks 2004). This scholarship is significant because it suggests that organizational culture is not just an internal matter, but can actually be impacted by external forces, including laws, norms, values and aspirational targets. This means that articulating (and defining) administrative or international law norms may have a real impact on institutions, even absent mech­ anisms of enforcement. This literature also suggests that training regimens can have lasting effects on institutional culture by changing the normative space within that institution. Of course, organizations might simply adopt the forms of the external script without imbibing or inculcating the rule. For example, a corporation might adopt compliance or audit requirements simply as a formality without any significant change in internal organizational culture. Moreover, what distinguishes a purely formal shift from one that has a deeper valence can be difficult to distinguish, and the seepage of an institutional change may take years to become truly part of institutional culture. What is clear, however, is that organizational culture is one of the most important elements in determining which organizations will behave in preferred ways and pursue jobs in accordance with preferred norms and values. Moreover, from the organizational theory literature, we can begin to tease out those structural elements that will help ensure that compliance agents within an organization—such as lawyers—are actually effective at inculcating values and affecting the behavior of operational employees. These compliance agents are likely to be most effective, it appears, if: (1) these agents are integrated with other, operational employees; (2) they have a strong understanding of, and sense of commitment to, the rules and values being enforced; (3) they are operating within an independent hierarchy; and (4) they can confer benefits or impose penalties on employees based on compliance (Rubin 2005; Taylor 1984). Accordingly, we must consider the degree to which the organizational structures of the military track the four features described above, thereby contributing to a culture of compliance with public law values. And, if the organizational structure of the uniformed military does contribute to a culture of compliance, then we will need to consider such organizational and institutional factors when understanding law compliance more generally, both within the military and in other settings, public and private.

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572  Comparative administrative law 1.2  Military Lawyers on the Battlefield Uniformed military lawyers—career judge advocates—are essentially the compliance unit within the military for purposes of enforcing commitment to the rule of law. These lawyers work to ensure that commanders and troops obey the rules of engagement that operationalize the law of armed conflict in a particular war or occupation. The core public value undergirding this body of law is the principle that the use of force, even in an armed conflict, is limited. Specifically, troops may not target civilians, and the use of force must be proportional to the risk or danger present. Military lawyers are essential to inculcating this public value into military culture. Interviews with more than 20 uniformed military lawyers who served primarily in Iraq and Afghanistan indicate that the current military structure includes all four elements of a successful compliance unit that were discussed above.5 Judge advocates mingle with operational employees, the commanders and troops on the battlefield. They help devise the rules of engagement and train troops in those rules, both before they deploy and in the war zone, and they provide ongoing advice to commanders and staff. These lawyers also describe a strong sense of commitment to the rules and the values that underlie them. And while the uniformed lawyers face challenges in establishing credibility, an independent chain of command—which obliges the lawyers to report incidents and which serves as a source for supplemental guidance in the field and a basis for promotion that is separate from the operational employees—helps bolster the lawyers’ independence and objectivity. Furthermore, uniformed lawyers play a key role in ensuring that commanders impose sanctions on rule breakers within the military justice system. Of course, even having all of these organizational features in place is no guarantee of norm compliance, but there is evidence to suggest that the military lawyers do exert a very real impact on military operations. My interview data is described in far more detail elsewhere (Dickinson 2011, Ch. 6), but here I underline the four basic elements of organizational structure that seem most relevant to creating an effective culture of compliance with international law norms. 1.2.1  Integration of accountability agents with operational employees The U.S. military has, since Vietnam, vastly expanded the role of judge advocates in operational activities. Judge advocates now serve alongside commanders on the battlefield, giving advice on troop discipline, fiscal decision-making, vetting targets, and interpreting rules of engagement. This intense integration of lawyers with officers and troops on the battlefield appears to be essential to the lawyers’ ability to inject legal norms and values into the decision-making process. The lawyers emphasize that their position on the battlefield gives them the opportunity to interact at the moment that the decisions are made, and the lawyers are in the room when the commander and staff lay out the battle plan. It 5   Initially, I interviewed 20 judge advocates, each of whom had served in either Iraq or Afghanistan or both during the previous five years and who had encountered private military contractors. I received permission from the Army JAG School in Virginia, and most of the interviews were conducted at the school. Each of these 20 had been in the JAG Corps for approximately eight years and was at the school for a second round of training. Several additional judge advocates were identified for interview through the so-called ‘snowball method’: they were mentioned by one or more of the initial interviewees.

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Organizational structure and culture in an era of privatization  573 is precisely this kind of co-mingling of accountability agents and operational employees that, according to organizational theory, increases the effectiveness of these agents. In addition, according to the judge advocates, the integration of lawyers and troops also enhances the lawyers’ credibility, because it demonstrates they are participating in a common mission; although they are lawyers, they are soldiers first and foremost. As one judge advocate noted, ‘When you’re a jag at the brigade level, you have to assume a soldier role, not just a lawyer role. You don’t earn trust unless you do the soldier part’ (JAG Officer #5 2007). We also see the judge advocates carefully translating their legal advice into operational terms, making it clear to commanders that the JAG’s job is not to say no, but rather to help their commanders achieve their objectives for the mission. As one judge advocate put it, ‘you can’t be Dr. No’ (JAG Officer #8 2007). Even if a particular course of action posed legal problems, ‘our job was to give an alternative course of action that would accomplish the goal without the legal concerns’ (JAG Officer #8 2007). 1.2.2  Commitment of accountability agents to legal rules and underlying values The judge advocates expressed a strong commitment to the legal rules and the underlying values they reflect. Indeed, they see their role as the guardians of ethics within the military, and all those interviewed tended to describe their role in similar terms. Thus, one judge advocate said that uniformed lawyers have an ‘ethical duty’ to protect the applicable rules and laws, including the rule regarding the use of force (JAG Officer #2 2007). Another described his role as standing for ‘integrity and to be the commander’s conscience . . . not like an inspector general but rather an internal conscience’ (JAG Officer #2 2007). And yet another said, ‘we’re the organization’s ethics counsel’ (JAG Officer #8 2007). This ethical role is viewed as having both an internal and external component, encouraging integrity within the military as well as advancing the military’s mission in the eyes of the broader public in the U.S. and elsewhere in the world. As one judge advocate expressed, ‘we can only fight the global war on terror by holding onto our core values, [and by] establishing the rule of law’ (JAG Officer #4 2007). 1.2.3  The need for an independent hierarchy Judge advocates also cite their ability to seek what they call ‘top cover’ through an independent chain of command within the JAG Corps as key to their effectiveness. This path of alternate authority—separate from the commander to whom the judge advocate is assigned—provides backup when a commander is reluctant to listen to the assigned judge advocate. For example, a judge advocate working with a brigade commander might seek the advice of a judge advocate at a higher level in the chain of command: [You might seek] top cover if you want higher level support. . . . if your commander doesn’t seek your advice, or if you advise your commander that the course of action he wants to take is a violation of law. It’s relatively common for a judge advocate at the brigade level, for example, to seek advice from the lawyer at the division or corps level and ask, ‘could you look at this and see if I’m right’ (JAG Officer #6 2007).

The ability to report incidents up an independent chain of command appears to give judge advocates leverage in trying to persuade commanders to follow a particular course of conduct. For example, one judge advocate reported that his ability to report

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574  Comparative administrative law i­ndependently helped him convince a reluctant commander to report an incident of potential abuse. As this judge advocate noted, ‘you can go through the divisional chain, if you need to’ (JAG Officer #1 2007). This judge advocate noted further, ‘sometimes you can win an argument [with the commander] if you say you have to report . . . you may burn a bridge, but it is necessary’ (JAG Officer #1 2007). Finally, although the commanders to whom they are assigned do evaluate the judge advocates, performance reviews and promotion decisions are primarily the responsibility of senior uniformed lawyers, not the commander. This structure helps insulate the judge advocates and gives them greater independence. 1.2.4  The importance of sanctioning authority In protecting the public values embedded in military rules, judge advocates can investigate soldiers who violate those rule, and recommend that soldiers be brought before courts in the justice system internal to the military, where they may be tried and punished. In addition, even non-criminal acts that violate military rules can result in discipline. Penalties can range from full-fledged criminal punishment to administrative penalties such as reductions in pay or rank, or dishonorable discharge. The judge advocates are therefore central enforcers of military discipline. *** It is, of course, impossible to say for certain how effective the four organizational features summarized above are in actually protecting public law values on the ground. And of course the perceptions of the judge advocate lawyers are bound to be somewhat self-serving. Nevertheless, my study suggests that, at the very least, having an independent Judge Advocate General corps embedded with troops has some constraining effect by injecting public values into volatile wartime contexts.

2. ORGANIZATIONAL STRUCTURE AND CULTURE AND THE PROBLEM OF PRIVATE MILITARY AND SECURITY CONTRACTORS By contrast, private military and security contractors have historically fallen outside this organizational accountability framework. While they may have received some training in rules regarding the use of force, that training did not typically include updated advice on the battlefield about how the rules apply in specific scenarios. Contractors also did not receive ongoing situational advice from military lawyers or even from private lawyers employed by the firm itself. Indeed, although contract firms employed lawyers, those lawyers did not typically spend time on the battlefield and did not have the same independent chain of command available to uniformed military lawyers. Finally, the accountability system that applied to troops did not govern contractors. Thus, privatization weakened many crucial, though subtle, mechanisms of compliance with public values. If organizational structure and culture matter, then the next question is: what implications does this observation have for reform efforts when governments privatize? While there are clearly no easy answers, an approach focused on organizational structure may open up possible lines of inquiry that might not otherwise be considered. For example, following the model of the Judge Advocate General corps, Congress or federal agencies

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Organizational structure and culture in an era of privatization  575 might try to mandate—via contract or regulation—a more direct role for governmental accountability agents. Thus, the judge advocates, or perhaps other accountability agents such as contract monitors, might assume an expanded role in training, interacting with, and disciplining contractors. In other words, reforms might seek to bring the firms and their employees more within the organizational structure and culture of the government. An alternative approach might be to incentivize, or impose, organizational reforms within private military and security firms themselves. In recent years significant developments have emerged on both fronts. Initially, reformers focused on the first path. Congress expanded the jurisdiction of military courts to allow contractors to be tried under the Uniform Code of Military Justice,6 and judge advocates now have the authority to investigate and prosecute cases of contractor misconduct (Gordon 2008). This authority remains limited, however, as there are only a small number of offenses that would apply to contractors, and judge advocates cannot bring a case unless central command approves (Gordon 2008). In addition, the authority appears to apply only to Department of Defense contractors (Stafford and Goodwin 2008). Since Congress conferred the authority in 2007, the military has only prosecuted one case against a contractor. And while the Court of Appeals for the Armed Forces upheld the conviction of the contractor in that case, significant concerns remain about the constitutionality of trying civilians in military courts (Vladeck 2016). Thus, although military judicial oversight now exists, it is a last resort when the civilian justice system does not work, and its constitutionality is uncertain. Judge advocates or other governmental actors might also assume more authority over contractors before the commission of an offense. For example, the Department of Defense has issued a rule that would require security contractors to receive training from judge advocates (Sacilotto 2009). The State Department has gone farther and adopted a rule requiring that agency diplomatic security personnel ride along with State Department security contractors when travelling (US Government Accountability Office 2008). This rule aims to integrate agency accountability agents with contractors, which, as we have seen, appears to be one institutional feature that tends to cause increased compliance. Incorporating military and security contractors within the organizational culture of the foreign policy agencies has been limited, however. For example, even under the State Department’s rule, the agents accompanying contractors do not have authority to impose sanctions, and they do not have an independent hierarchy with clout in the upper echelons 6   The John Warner National Defense Authorization Act for Fiscal Year 2007, Pub. L. 109–364, §552, 102 Stat. 2083, 2217 (2006) extends the jurisdiction of the Uniform Code of Military Justice (2009) (UCMJ), to apply ‘[i]n time of declared war or a contingency operation’ to ‘persons serving with or accompanying an armed force in the field’ (Uniform Code of Military Justice 2009, § 802(a) (10)) (new text emphasized). A ‘contingency operation’ is defined more broadly than a declared war and includes, for example, a military operation designated by the Secretary of Defense as an operation in which the Armed Forces may become involved in hostilities or military actions against an enemy of the United States or against an opposing military force, or that results in a call, order, or retention on active duty members of the uniformed services by the President during a time of war or national emergency (10 U.S.C. § 109(a)(13) (2009)). Thus, contractors can now be subject to prosecution by court-martial for violating the UCMJ if they serve with or accompany an armed force in the field in a contingency operation, such as Operation Iraqi Freedom or Operation Enduring Freedom in Afghanistan.

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576  Comparative administrative law of contractor firms. Thus, a more ambitious approach would be to try to recreate the full panoply of organizational features that the military established post-Vietnam. Such features could be mandated either as terms in the contracts with private firms or through direct regulation. And though it is debatable how best to implement these organizational features outside the uniformed military context, this is an area that should be considered seriously in any effort to reform the contracting process. Although efforts along the first track have fallen short, reforms along the second track have gained momentum. Several promising initiatives appear to create incentives for private firms to encourage the establishment of the organizational structures and professional culture necessary to protect public values. For example, a coalition of actors from the human rights community, industry, and government has produced a voluntary International Code of Conduct for Private Security Service Providers,7 along with a governance and oversight mechanism to enforce the Code.8 Many of these same actors have also jointly created an industry standard for the security industry in the U.S., known as PSC-1, and are working to develop similar standards in other countries and at the international level. The Code and oversight mechanism offer at least the promise of a forceful tool to incentivize private security firms to adopt specific organizational practices to protect the public values embedded in international human rights and humanitarian law. They are an offshoot of an inter-governmental process that resulted in the Montreux Document on Pertinent International Legal Obligations and Good Practices for States Related to Operations of Private Military and Security Companies During Armed Conflict and are the product of many years of dedicated work by an unlikely alliance of actors in a strikingly open and transparent process (Dickinson 2013). Significantly, this arrangement is a true public/private partnership and not mere industry self-regulation. Firms that sign onto the Code explicitly commit to a detailed set of principles—including clear limits on the use of force, torture, and sex trafficking—culled from international human rights and humanitarian law treaties and made directly applicable to private firms. Firms also agree to adopt specific organizational practices, including training and vetting of employees, as well as internal oversight and monitoring of those employees. Further, they undertake to provide accountability for grievances brought by third parties who might be injured by their employees. And significantly, this is not just a fig-leaf statement of principles or aspirational goals; the companies agree to subject themselves to independent certification and monitoring, as well as mediation of disputes, by the Association set up under the Code, and this Association includes not just industry players, but governments and human rights NGOs as well. The industry standard for private security firms, PSC-1, followed a similar process and takes a similar approach (DeWinter-Schmitt). A standard recognized by the American National Standards Institute (ANSI) in March 2012, PSC-1 outlines quality management standards for private security firms. Like the Code, PSC-1 contains quite strong normative commitments that instantiate key values embedded in human rights and humanitar7   International Code of Conduct for Private Security Service Providers (2010), available at https://perma.cc/8V2P-DPAT. For an evaluation of the Code and its enforcement mechanism, see Dickinson 2013. 8   International Code of Conduct for Private Security Service Providers’ Ass’n, Articles of Association (2013), https://perma.cc/WDP8-BJQD.

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Organizational structure and culture in an era of privatization  577 ian law and applies them specifically to private firms. Also like the Code, PSC-1 mandates a series of structural organizational practices, including training, oversight, and accountability, that firms must adopt in order to be deemed in compliance with the standard. And the standard mandates independent certification. Other countries are developing similar standards for private security firms. The jury is still out on the effectiveness of either mechanism. With respect to the Code, much will turn on the resources allocated to the Association charged with monitoring and oversight, and how robustly Association staff implement their mandate. PSC-1 does not provide for its own enforcement, but rather piggybacks on the processes, including certification, that apply to other business management standards. Here, one question will be whether the personnel who certify that a firm has adopted the standard are actually knowledgeable enough in the underlying substantive norms (including human rights law) to fully understand whether the firm in question has complied. Another issue is whether either mechanism sets up accountability agents with enough authority and legitimacy to make a difference within the private firms. And yet another is whether governments will require companies to participate in either or both mechanisms before awarding contracts. The Department of Defense has said that certification under PSC-1 will be a pre-requisite for security firms to receive future contracts, and both State and DOD have indicated they will closely scrutinize whether a security firm belongs to the Code, even if they do not formally require Code membership. Finally, these promising developments for private security contractors do not extend to new areas of military outsourcing, which have received relatively scant attention, such as the armies of contractors who help operate drones or participate in cyber-operations. Approaches to regulation that include attention to organizational structure and culture could be beneficial in these domains as well. Thus, through governmental regulation, independent industry efforts, or hybrid publicprivate partnerships, contract firms might create internal organizational structures to enhance compliance with public law norms and values. Such efforts would involve firms adopting the kinds of reforms that the military adopted post-Vietnam with regard to its judge advocates, including the establishment of compliance units or ombudspersons within the firm who would accompany operational employees in theater, advise commanders, report through an independent chain of command, and have authority to confer benefits and punishments. In short, the idea would be to create within the firm itself a cadre of lawyers who would be analogous to the judge advocates within the military. More broadly, the industry as a whole—either independently or by means of government regulation—might seek to professionalize the conduct of contractor employees through ethical codes, accreditation schemes and the like. The private security industry has welcomed such initiatives in recent years, and these developments hold significant promise. Although the obstacles are enormous, both the organizational theory literature and the on-the-ground observations of military lawyers suggest that when we think about reforming the private military and security contractor process, we cannot ignore organizational structure and culture. Indeed, it is likely that these sorts of reforms might run deeper and last longer than any other possible reforms that have been suggested to rein in military contractors. Accordingly, a serious consideration of how organizational culture can be linked to compliance suggests that, instead of focusing exclusively on new treaties or new international judicial rulings seeking to formally extend norms to contractors, we might instead look to how best to alter practices within private firms.

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578  Comparative administrative law

CONCLUSION Administrative law scholars seeking to consider issues of effective norm compliance must take seriously the organizational structures and cultures of the institutions that implement administrative policy. Those institutions may be governmental bureaucracies, and of course we need to know more about how effective oversight cultures are created within such bureaucracies. We also need to study key international organizations, such as the World Bank (Sarfaty 2009), to see how internal dynamics of such organizations affect the range of ideas considered and policies pursued. And, especially in an era of privat­ ization, we need to address how to build organizational structures and internal cultures within private firms—from military contractors to rating agencies—that are most likely to effectuate core public values. In conducting each of these inquiries, the key point is that it will not be enough to reform our formal laws. In addition, we need to think about the more inchoate, but perhaps even more salient, ways that a culture of norm compliance is actually created and maintained. My study of military lawyers on the battlefield demonstrates some of the mech­ anisms by which such a culture can be established. Though obviously not perfect, the system—through which highly trained military lawyers are embedded with troops, advising commanders on the battlefield and answering to their own independent chain of command—has had real impact. And significantly, few of those organizational features have existed within the firms providing privatized military and security services. Yet recent years have brought reforms aimed precisely at re-shaping internal organizational culture to better orient it toward public values, at least within companies providing private security. The impact of these reforms in this and other sectors providing privatized services will be a critical area of study in the years to come. These reforms must go beyond conventional legal frameworks and work towards deeper organizational and institutional change. Only through such an approach can we begin to address the challenges posed by a world of privatized military force. And only through such an approach can we reorient administrative law scholarship to more comprehensively study the various organizational settings in which actors operate and the effect of those settings on law compliance and administrative efficacy.

BIBLIOGRAPHY Abel, R.L. 1989. American Lawyers. N.Y.: Oxford University Press. Administrative Conference of the United States 1973. Recommendation 73-5, 39 Fed. Reg. 4847 (Feb. 7, 1974), available at https://perma.cc/2DSE-MNBL (last visited June 20, 2017). Alchian, A. and H. Demsetz. 1972. ‘Production, Information Costs, and Economic Organization.’ American Economic Review. 62: 777–95. Aman, A.C. Jr. 2004. The Democracy Deficit: Taming Globalization through Law Reform. N.Y.: New York University. Auby, J. 2010. ‘Contracting Out and ‘Public Values’: A Theoretical and Comparative Approach.’ S. RoseAckerman and P. Lindseth, eds, Comparative Administrative Law Research Handbook. Northhampton, MA: Edward Elgar. Avant, D.D. 2005. The Market for Force: The Consequences of Privatizing Security. N.Y.: Cambridge University Press. Ayers, I. and J. Braithwaite. 1992. Responsive Regulation: Transcending the Deregulation Debate, 25–8. N.Y.: Oxford University Press.

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Organizational structure and culture in an era of privatization  581 Stafford, S. and D. Goodwin. 2008. ‘Revised Rules for Battlefield Contractors.’ National Defense: NDIA’s Business and Technology Magazine. August. https://perma.cc/Q3A2-EQ38. Symposium: ‘Public Values in an Era of Privatization.’ 2003. Harvard Law Review. 116: 1212–453. Tasker, P. 1987. The Japanese: A Major Exploration of Modern Japan. N.Y.: Dutton. Taulbee, J.L. and M.V. Creekmore, Jr. 2003. ‘NGO Mediation: The Carter Center.’ In Mitigating Conflict: The Role of NGOs, eds, H.F. Carey and O.P. Richmond, 156–71. Portland: Frank Cass Publishers. Taylor, S. 1984. Making Bureaucracies Think: The Environmental Impact Statement Strategy of Administrative Reform. Stanford, CA: Stanford University Press. Teubner, G. 1985. ‘Corporate Fiduciary Duties and their Beneficiaries: A Functional Approach to the Legal Institutionalization of Corporate Responsibility.’ In Corporate Governance and Directors’ Liabilities: Legal, Economic, and Sociological Analysis on Corporate Social Responsibility, ed. K.J. Hopt and G. Teubner, 149. N.Y.: W. de Gruyter. Teubner, G. 1987. ‘Juridification: Concepts, Aspects, Limits, Solutions.’ In Juridification of Social Spheres: A Comparative Analysis in the Areas of Labor, Corporate, Antitrust and Social Welfare Law, ed. G. Teubner, 3. N.Y.: W. de Gruyter. Uniform Code of Military Justice. 2009. 10 U.S.C. §§ 801-946. 5 January. US Government Accountability Office. 2008. Rebuilding Iraq: DOD and State Department Have Improved Oversight and Coordination of Private Security Contractors in Iraq, but Further Actions Are Needed to Sustain Improvements. 1 August Revision. https://perma.cc/C5G6-LWPM. US Senate. 2007. Armed Services Committee. Hearing on the Nomination of David Petraeus. 110th Cong., 1st sess. 3 January. Verkuil, P. 2007. Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and what we can do about it. N.Y.: Cambridge University Press. Vladeck, S. 2016. ‘Military Courts and Article III.’ Georgetown Law Review. 103: 933–1001. Weiss, T.G., ed. 1998. Beyond UN Subcontracting: Task-sharing with Regional Security Arrangements and Service-providing NGOs. Basingstoke: Macmillan. Williamson, O.E., ed. 1995. Organization Theory: From Chester Barnard to the Present and Beyond. N.Y.: Oxford University Press. Williamson, O.E. 1996. The Mechanisms of Governance. N.Y.: Oxford University Press.

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35.  Transnational non-state regulation and domestic administrative law Victor V. Ramraj

Two contemporary developments are challenging our understanding of administrative law: the privatization of regulation and its increasingly transnational nature. Privatization sits awkwardly with received administrative law theory because, at least as it has developed in liberal-democratic legal traditions, public law tends to be viewed as providing protection against arbitrary state action. As a practical embodiment of the rule of law, it helps to keeps government in check. Private regulation stretches this understanding, but it can nevertheless be incorporated into a power-limiting account by treating it as a form of delegated state power and subjecting it to judicial oversight. The state therefore remains in overall control; its legal hegemony remains intact. Transnational regulation also challenges state-centric theories of administrative law. Many of the chapters in this volume address the challenges posed by EU regulation and, more generally, the rise of intergovernmental networks and transnational regulatory bodies that do not fit the pattern of formal international institutions established through the formal consent of states. Although the informality of some of these bodies—such as the Financial Action Task Force (FATF) or the Basel Committee on Banking Supervision—often disguises their potency as standard-setters and the extent of compliance their norms generate, they too can be subsumed within public law as being ultimately accountable to state institutions. So neither privatization nor transnational regulation presents a serious challenge for modern administrative law—until they come together. An important strand in the vast contemporary literature on transnational law is focused on what one group of scholars calls ‘transnational private regulation’ (Scott et al. 2011). This body of scholarship highlights the unique challenges posed by a diverse range of private (or what I call ‘non-state’) actors as standard-setting, adjudicative, and enforcement bodies, although not always all of these at once. Examples of these kinds of regulators would be voluntary corporate codes, industry self-regulatory associations, technical standard-setting organizations, and multi-stakeholder certification bodies. They might also include jurisdiction-specific initiatives involving stakeholders from far and wide (for example, the Accord on Fire and Building Safety in Bangladesh, whose signatories include international and domestic trade unions and international brands and retailers). And they might soon include the Internet Cooperation for Assigned Names and Numbers (ICANN), which, at the time of writing, was expecting to gain full independence from US government oversight to become a transnational, non-state regulator of the Internet’s domain name system (The Economist 2016). The diversity here is striking. Although these bodies are all governed by non-state actors, ‘they pursue different objectives and incorporate multiple dimensions and degrees of public interest, depending on the composition of their respective governance bodies and the effects they have on the general public’ (Cafaggi 2011, 31).. At the same time, 582 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 582

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Transnational non-state regulation and domestic administrative law  583 these regulators pose a common challenge for administrative law theory and practice; unlike their domestic counterparts or inter-governmental networks, they have no claim to be even informal delegates of state authority, nor can they (except ICANN, for the time being) claim even an indirect line of accountability to any state. And yet, for most practical purposes—but still out of the view of many domestic administrative lawyers— they function as regulators relative to, and many of them command the allegiance of, a particular transnational community (Cotterrell 2008). This chapter takes a closer look at administrative law’s blind-spot, seeking to define the contours of transnational nonstate regulation, identify the assumptions of domestic administrative law that make it largely invisible, and consider how domestic law might respond to transnational non-state regulation.

1.  TRANSNATIONAL NON-STATE REGULATION Transnational non-state regulation comes in many shapes, functions in a variety of ways, and generates a wide range of consequences for those in the domestic sphere and for the domestic legal order itself. This part of the chapter provides a typology of transnational non-state regulation, laying the foundation for a closer look at the challenges it poses for domestic administrative law. First, however, it is helpful to distinguish transnational non-state regulators from the formal international organizations, inter-governmental networks, and hybrid (public-private) entities that are excluded from the scope of this chapter. The reason for this exclusion is that, at least in theory, these bodies all involve some state control or oversight, however imperfect. By excluding state-sanctioned bodies from its purview, this chapter is able to focus attention on the hardest case for administrative law: regulatory bodies operating across state borders that are not governed or controlled by states. Three kinds of state-sanctioned bodies are therefore excluded from the scope of the chapter. First, formal international organizations that are created through the formal consent of states—from the United Nations and its progeny to the World Trade Organization and the Bretton Woods institutions—are all set aside. Second, intergovernmental networks (Slaughter 2005) such as FATF and the Basel Committee, as well as many of the EU bodies discussed elsewhere in this collection, are excluded from further analysis. A third category, hybrid public-private bodies, is more complex. These bodies would include any transnational regulator in which states or state agencies have a non-exclusive governing role. In its original form,1 ICANN might best be described as a hybrid regulatory body, with a governance structure dominated by non-state actors, but ultimately subject to state oversight. Another example is the Extractive Industries Transparency Initiative (EITI), a standard-setting body aimed at promoting ‘open and accountable management of natural resources,’2 which was initially proposed by the United Kingdom government. It now involves several countries, as well as companies,

1   That is, its form prior to the reforms proposed at the Marrakesh conference in March 2016 (The Economist 2016). 2   See https://eiti.org/eiti, accessed 23 October 2016.

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584  Comparative administrative law investors, and civil society organizations. In the European context, this tripartite governance structure is sometimes described as co-regulation, and refers to a ‘method that includes the participation of both private and public actors in the regulation of specific interests and objectives’ (Verbruggen 2009, 425). Hybrid organizations and their accountability structures are complex and significant in their own right, and they raise important issues as to their place with the domain of public international law (Pauwelyn 2012).3 This chapter, however, is concerned only with regulators that are governed exclusively by non-state actors. These non-state actors represent the hardest case from the perspective of public law precisely because of the absence—even formally or technically—of a direct line of accountability to states. At one end of the spectrum of transnational non-state regulators are internal corporate codes—voluntary commitments by companies, including multinational corporations, to abide by a set of principles governing their conduct toward employees, suppliers, communities, and the environment. Compliance with these principles might be secured by an internal audit or by independent third party auditing (McAllister 2014, 308). The results of these audits could be widely disseminated as part of the company’s public disclosure practices, or treated as confidential. Although a company’s own code of conduct might be influenced by more general norms of corporate social responsibility, to the extent that compliance with these principles and disclosure of audits are voluntary, they might be more interesting from a corporate governance than an administrative law perspective. Corporate codes become more interesting to public lawyers as we move along the spectrum to the point where industry or trade associations appear. For one thing, industry associations have an important historical resonance with the lex mercatoria—the merchant law—in which there is a renewed academic interest, as private forms of dispute resolution, including international commercial arbitration, grow in popularity (Merrills 2011). Trade and professional bodies are also familiar to the domestic administrative law of many countries in the context of professional discipline and self-regulation (Van Heesen-Laclé and Meuwese 2007). These non-state self-regulatory bodies all share an important characteristic that internal corporate codes lack. Although membership is voluntary, compliance is typically enforced through peer pressure; suspension or exclusion from an industry association can have serious market access and reputational consequences (McAllister 2014, 304). That said, the strict enforcement of industry standards might be at odds with the private or commercial interests of some of its members, so private interests might still trump public values. But at least in some contexts, industry self-regulation may help to shift corporate attitudes toward compliance, particularly when free-rider problems are minimized and each member can be confident that other members of the association must also bear the cost of compliance. One example of an industry body is the Equator Principles—an initiative initially of ten commercial banks but numbering 83 financial institutions as of early 2016—whose members agree to set ‘operational principles and standards for managing the environ-

3   These questions also arise in relation to international ‘soft law’ principles such as the UN Guiding Principles on Business and Human Rights (Office of the High Commissioner on Human Rights 2011), which are quickly reshaping the landscape of non-state standard-setting, but will not be addressed in detail in this chapter.

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Transnational non-state regulation and domestic administrative law  585 mental and social impacts of loans to large development projects’ (Wright 2011, 229). By adopting the Equator Principles, member institutions commit to financing infrastructure development mega-projects ‘conditional on compliance with a set of environmental and social standards and procedures’ (Wright 2011, 229). The latest version of the Equator Principles III (2013)4 includes, for example, an obligation to undertake social  and en­ vironmental due diligence, obtain ‘free prior and informed consent’ of affected ­communities, and respect human rights (EP III expressly incorporates the UN Guiding Principles on Business and Human Rights). It also establishes grievance mechanisms, as well as provisions for independent review, monitoring, and reporting. A step beyond industry associations are multi-stakeholder regulators that exclude states from their formal governance structures. Although these regulators can take any number of forms, they typically include civil society organizations, industry representatives, and experts in the field. Governments may well be consulted by these bodies, but since they are (in this typology) excluded from the formal governance structure, they can be distinguished from the hybrid co-regulators previously identified. These transnational multi-stakeholder (but non-state) regulators would include, for example, the Forestry Stewardship Council (FSC), a standard-setting organization that uses certification and labeling as its primary mechanism for regulating sustainable practices in the forestry industry (Meidinger 2006).5 The FSC is one example among a growing number of bodies that form part of ‘private environmental governance,’ defined as ‘actions that private institutions, including business firms, non-governmental organizations (NGOs), and other private actors take that reduce negative environmental externalities, manage common pool resources, and affect the distribution of environmental amenities’ (Light and Vandenbergh 2016). However, the model of transnational non-state, multi-stakeholder regulators can be found in many other sectors, including advertising standards and food safety (Scott et al. 2011). Before we turn to the response of domestic administrative law to these transnational non-state regulatory bodies, three observations are in order. First, the typology presented in this part has focused on the regulator’s governance structure. However, it is also import­ ant to consider the specific functions these regulators play. A fine-grained typology would further distinguish standard-setting, adjudicative, monitoring, auditing, investigative, and enforcement roles. Some transnational regulators might aspire to perform all of these roles; others might focus on one or two. Some might focus on standard-setting, leaving enforcement to private third-party enforcers or to states (Cafaggi 2012). Others might refer disputes over non-compliance to arbitration,6 effectively outsourcing the adjudicative function. A more detailed typology would also consider the manner in which transnational non-state regulatory standards affect those within the domestic sphere. In some situations, regulation might purport to generate norms and impose duties directly 4   See http://www.equator-principles.com/resources/equatorc_principles_III.pdf, accessed 23 October, 2016. 5   A caveat is required here because the Forestry Stewardship Council permits ‘representatives of government owned or controlled forestry management organizations in the economic chamber’ (Meidinger 2006, 53). 6   See, for example, para. 5 of the Accord on Fire and Building Safety in Bangladesh, http:// bangladeshaccord.org/wp-content/uploads/2013/10/the_accord.pdf, accessed 23 October 2016.

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586  Comparative administrative law on individuals or organizations; alternatively, the norms might be mediated by states, political sub-divisions, municipalities, indigenous governments or tribal councils, universities, or other public or quasi-public bodies (Barak-Erez and Perez 2013). Finally, it is analytically helpful to classify transnational regulators according to the manner in which their standards are incorporated (if they are) into the formal domestic legal order. Some might be incorporated legislatively or judicially. In these situations, the relationship between domestic law and transnational regulation is less complicated since the latter is formally incorporated into domestic law, and thus directly subject to it. In other situations, the domestic legal regime might engage less directly or more ambiguously with transnational non-state regulators. Rather than addressing these complications here, this chapter will examine them in Part 3, in the course of addressing domestic administrative law’s response.

2.  OVERCOMING ADMINISTRATIVE LAW’S BLIND-SPOTS Despite the proliferation of transnational non-state regulatory entities and the impact they have on those within the state and on the state legal order itself, it remains, in many ways, invisible to those who study or practice administrative law. At the core of the modern, post-colonial state, particularly as it has come to be understood in liberal-democracies, is the compelling assumption that the overriding goal of public law, including administrative law, is to limit state power. This assumption is problematic for several reasons. First, power-limiting theories fail to acknowledge the important role that administrative law can play in facilitating good governance, an important function of transnational private regulation when states are unwilling or unable to regulate. Second, by focusing on administrative law’s state-limiting power, it does not easily accommodate the expanding role of private regulators. Third, by focusing on the state as its exclusive concern, administrative law turns a blind eye to transnational regulation emanating from beyond the state, particularly from non-state sources. This part considers these points in turn. Looking beyond the limiting role of administrative law requires rethinking a core assumption of modern constitutional theory as it has developed in liberal-democratic legal orders. This tradition of constitutionalism sees the abuse of state power as the primary threat that public law, in its constitutional and administrative law forms, is designed to moderate. Although this core assumption has dominated much of administrative law thinking, it has been questioned by Carol Harlow and Richard Rawlings in their treatise on administrative law (Harlow and Rawlings 2009, 31). Drawing on the long tradition of liberal constitutionalism with its ideal of limited government, Harlow and Rawlings identify and label as ‘red light theories’ of administrative law theories where ‘the emphasis is on citizens’ rights and on law as a brake on state action’ (Harlow and Rawlings 2009, 6). These theories, which they trace to Albert Venn Dicey, ‘left English administrative law with a great mistrust of executive action’ and started it ‘on a collision course with governments that wished to use administrative law “instrumentally” for socialist or welfare purposes’ (Harlow and Rawlings 2009, 6). In contrast, green light theories ‘do not . . . favour unrestricted or arbitrary action by the state’ but they see in administrative law ‘a vehicle for political progress’ and welcome the administrative state (Harlow and Rawlings 2009, 31). The role of administrative law ‘is not (primarily) to stop bad administrative

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Transnational non-state regulation and domestic administrative law  587 practices but to encourage good ones’ (Chan 2010, 29). Of course the extent to which administrative law is called on to prevent abuse of power or to facilitate good governance will depend on the political and administrative context in which it operates. The key point here is that administrative law can be legitimately concerned with the conditions of good governance—about developing rules and principles that allow regulators to regulate well. It is precisely this goal that has come to occupy the most sophisticated transnational regulators and distinguishes those who have the strongest claim to legitimacy and ought to be taken seriously. Focusing on limiting state power also makes it harder to see the regulatory role played by non-state actors, even in the domestic sphere. Non-state regulation can, however, be incorporated where a governmental power is delegated to a non-state actor or—more contentiously—where the non-state actor is performing a public function. Possibly the most important case in the common law tradition on this issue is the English Court of Appeal case, R v Panel on Take-overs and Mergers, ex parte Datafin.7 The central question in Datafin was whether the Panel on Take-overs and Mergers, a body with no statutory authority, but which regulated mergers and acquisitions in the UK, was subject to judicial review. Consisting of 12 members representing some of the most powerful financial institutions in the City of London, including the Association of British Insurers, the Committee of London and Scottish Bankers, the Institute of Chartered Accountants in England and Wales, the Panel had ‘no statutory, prerogative or common law powers’ and was ‘not in contractual relationship with the financial market or with those who deal in that market.’8 The Panel exercised ‘immense power de facto devising, promulgating, amending and interpreting the City Code on Take-overs and Mergers, by waiving or modifying the application of the code in particular circumstances, by investigating and  reporting upon alleged breaches of the code and by application or threat of sanctions.’9 The Master of the Rolls framed the principal question in Datafin as ‘whether this remarkable body is above the law.’10 It was clear on the facts that the Secretary of State’s policy was to ‘limit legislation in the field of take-over and mergers and to use the panel as the centerpiece of his regulation of the market’ and that the rights of citizens were ‘indirectly affected by its decisions, some, by no means all of whom, may in a technical sense be said to have assented to this situation.’11 Since the decisions of the panel were not amenable to control through private law, Donaldson MR concluded that, in principle, the court had the jurisdiction to judicially review the panel’s decisions,12 although he made it clear that it should be slow to interfere with the panel’s decisions. For his part, Lloyd LJ maintained that it was important to consider not only the source of power in question (whether it was statutory or contractual) but also the nature of that power.13 Thus, if ‘the body in question is exercising public law functions, or if the exercise of its functions have      9   10   11   12   13    7  8

[1987] Q.B. 815. Ibid., at 824–5. Ibid., at 826. Ibid., at 827. Ibid., at 838. Ibid., at 839. Ibid., at 847.

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588  Comparative administrative law public law consequences, then that may . . . be sufficient to bring the body within the reach of judicial review.’14 Datafin stands for the proposition that the courts have the jurisdiction to intervene in the decisions of non-state actors not only when they are formally delegated by the state—that is, not only in situations involving the ‘contracting out’ of state powers15—but equally where non-state actors are exercising public law functions. As the Singapore High Court expressed it in Yeap Wai Kong v. Singapore Exchange Securities Trading Ltd., a 2012 case following Datafin, in the ‘modern era, public policy is increasingly effected not only by government and statutory bodies but also through self-regulating entities in sectors where the domain nature and complexity of the sector requires front-line expertise coupled with back-line regulators to regulate the relevant sector.’16 In light of these developments, restricting judicial review to statutory bodies would be to ‘impose an artificial limit on the developing law of judicial review.’17 Cases articulating a similar approach can be found in Hong Kong,18 South Africa,19 and Canada.20 Although there is often a tendency in these cases to insist on some link between the non-state regulator and the state’s regulatory policies, these cases show a growing willingness on the part of the courts to recognize the important regulatory role played by non-state actors operating within the state. That said, administrative law’s preoccupation with regulatory power exercised by or within the state makes it impervious to the growth in transnational non-state regulation. Even cases such as Datafin and Yeap Wai Kong do not address the challenge posed by transnational non-state regulators operating from outside the state’s territorial bound­ aries. We might find a possible exception to this generalization when transnational regulatory standards are expressly incorporated into domestic law, although in such instances, the transnational standard has often been formally domesticated, and is thus regarded as domestic law. Less common, however, would be a case in which a transnational ­regulator—whose standards have not been incorporated into domestic law, but which nevertheless have a domestic impact—is deemed to be playing a public regulatory function and subjected to administrative law principles. There is, however, a cost to intervening too readily since an activist domestic court could undermine the ability of transnational nonstate regulators to regulate effectively, particularly if they are subject to the administrative law of every domestic jurisdiction in which they have, or purport to have, an impact. Some degree of comity is therefore necessary. The challenge is to develop principles governing domestic administrative law’s engagement with transnational non-state regulation that protect individuals and communities from bad transnational regulation, while facilitating good regulation. This requires framing the overarching goal of administrative law as

 Ibid.   Société de l’assurance automobile du Québec v. Cyr [2008] S.C.C. 13. See generally, Hoehn 2011. 16   Yeap Wai Kong v. Singapore Exchange Securities Trading Ltd. [2012] 3 S.L.R. 565 at para. 9. 17   Ibid., at para. 14. 18   Pearl Securities Ltd. v. Stock Exchange of Hong Kong Ltd. [1999] 2 H.K.L.K.D. 243 [1999] 1 H.K.C. 448. 19   Dawnlaan Beleggings (Edms) Bpk v. Johannesburg Stock Exchange and others 1983 (3) S.A. 344 (W). 20   Air Canada v. Toronto Port Authority [2011] F.C.A. 347. 14 15

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Transnational non-state regulation and domestic administrative law  589 promoting good regulatory practices and limiting bad ones, whether exercised by state or non-state actors at the state or transnational levels.

3.  DOMESTIC ADMINISTRATIVE LAW’S RESPONSE How then, should domestic law respond to transnational private regulation? Three possibilities present themselves: (1) isolation; (2) formal incorporation; and (3) recognition, engagement, and cooperation. An isolationist approach would reject transnational nonstate regulation altogether, resisting its claims to legitimacy and refusing to recognize it formally in domestic law. It might even be suspicious of attempts to incorporate it formally. A second approach would be open to some forms of transnational non-state regulation, but require that these be formally incorporated into domestic law (McAllister 2014). A third option would be to recognize the transnational regulatory regime as a legitim­ate legal order and engage with it, cooperating to minimize conflict between domestic and transnational legal norms (Roughan 2013). Each of these options requires further explanation. An isolationist approach would refuse to recognize transnational non-state regulation (or a particular non-state regime) as legitimate and refuse to engage with it at all. A good example of this legal mind-set can be found in Sagen v. Vancouver Organizing Committee,21 a judgment of the Court of Appeal for British Columbia concerning the International Olympic Committee’s decision not to stage women’s ski-jumping as an event at the Vancouver Winter Olympic Games in 2010. In the lead up to the Games, a group of women ski-jumpers challenged on constitutional equality grounds the IOC’s decision to stage men’s, but not women’s, ski-jumping as an event. However, it was the Vancouver Organizing Committee (VANOC), which stood in a contractual relationship with the IOC, rather than the IOC itself, that ended up in court. The question was therefore whether VANOC could be held accountable under Canadian constitutional law for implementing the IOC’s decision. The Canadian Charter of Rights and Freedoms has been interpreted by the Supreme Court of Canada to apply to ‘governmental activity.’22 However, the Court of Appeal held that there was no need to determine whether VANOC was engaged in such activity because it was ‘clear on the facts that neither government nor VANOC had any authority to make or alter the decision of the IOC not to include a women’s ski jumping event in the 2010 Games.’23 The Court of Appeal did not take issue with the trial judge’s characterization of the IOC as a ‘private, Swiss-based organization’ that was not subject to the Charter.24 In the eyes of the Court of Appeal, this was rather ‘a case in which a non-governmental body is brought before the court as a result of pol­ icies which neither it nor any Canadian authority has the power to change.’25 Segan was a constitutional case, but the line of reasoning is illuminating. It shows how even in the face of the decision of the transnational body that ostensibly affects the rights of those     23   24   25   21 22

[2009] B.C.C.A. 522. Eldridge v. British Columbia [1997] 3 S.C.R. 624. Supra note 21 at para. 49. [2009] B.C.S.C. 942 at para. 104. Supra note 21 at para. 65.

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590  Comparative administrative law within its borders, a domestic court could decline jurisdiction, effectively depriving the complainants of a remedy, and refuse to engage with the transnational entity. A second, cautious step in the direction of acknowledging the regulatory role played by transnational non-state actors insists that its regulatory power be incorporated into domestic law and mediated by the state.26 In Segan, for instance, the Court of Appeal could have deemed VANOC to be the IOC’s agent, and held it liable for the implementation of the IOC’s decision, even accepting that it had no control over the decision itself. The decision of the European Court of Justice in Kadi and Al-Barakaat v. Council of the European Union27 provides an illustration of how this could be done. In Kadi, the European Court of Justice (ECJ) had to respond to the European Union’s freezing of the assets of a blacklisted individual—in compliance with the UN Security’s Council’s mandatory sanctions regime (under Resolution 1267), but in violation of the EU’s human rights regime. It was not disputed that the EU was obligated to freeze the assets of any individual who, even without notice, was placed on a blacklist by the Sanctions Committee, or that the direction to do so was made under Chapter VII of the UN Charter and was therefore compulsory and all UN member states had to carry it out. Nor was it disputed, however, that Yassin Abdullah Kadi’s inability to petition the Sanctions Committee for de-listing was inconsistent with the EU’s human rights regime. The ECJ resolved this tension by holding that although the Security Council’s sanctions regime was legally primary, the EU’s implementing regulation was inconsistent with fundamental rights to the extent that it ‘was adopted without any guarantee being given as to the communication of the inculpatory evidence against [the appellants] or as to their being heard in that connection’ with the result that ‘the regulation was adopted according to a procedure in which the appellants’ rights of defence were not observed, which has had the further consequence that the principle of effective judicial protection has been infringed.’28 Kadi has its detractors and its defenders, setting those who insist on a clear legal hierarchy of domestic, regional, and international legal norms against those who are more comfortable with the tensions arising from legal pluralism (de Búrca 2010; Krisch 2010, 153–88). In the context of transnational regulation, however, where transnational nonstate regulators lack the formal legitimacy of the UN Security Council, an analogous outcome to Kadi would be less contentious. In Sagen, it would have allowed the BC Court of Appeal to challenge VANOC’s implementation of the IOC’s decision on Canadian public law grounds. By parity of reasoning, it would allow for the possibility of challen­ ging the domestic implementation of a transnational regulatory norm without questioning or taking a position on the validity of the regime itself. A similar strategy can be seen in the legislative sphere, when transnational legal standards are formally adopted by legislative bodies or domestic regulators (Barak-Erez and Perez 2013; McAllister 2014). The difficulty with this approach, however, is that it provides no mechanism for en­gaging with transnational non-state regulators whose regulatory activities are ­unmediated by 26   On one reading of Datafin, the public element in that case was supplied by the fact that the private regulatory regime was incorporated into the broader public regime, thus strengthening the case for domestic judicial review. I am grateful to Swati Jhaveri for this point. 27   Kadi and Al-Barakaat v. Council of the European Union (3 September 2008), C-402/05 P & 415/15 P. 28   Ibid., at para. 352.

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Transnational non-state regulation and domestic administrative law  591 actors, public or private, within the state. A third kind of response therefore takes seriously transnational non-state regulation—or at least some instances of it—as a potentially autonomous, though highly-specialized, legal order. On this view, there may be multiple sources of political authority other than state or inter-state institutions, and the state ought to recognize legitimate transnational non-state regulators as authorities. This approach suggests a two-pronged strategy for states to engage with transnational nonstate regulators. The first prong would be to develop criteria for distinguishing legitim­ ate regulatory authorities in the transnational sphere. Not all prospective transnational non-state actors ought to be taken seriously as regulators, and developing a litmus test to distinguish among the wide range of transnational non-state actors is a key step in devising a nuanced response. The second prong, which builds on this first, is to develop an appropriate set of responses to transnational non-state regulators that is calibrated to their particular characteristics and the strength of their claim to legitimate political and regulatory authority. The proliferation of transnational non-state actors demands a fine-grained approach to their legitimacy as regulators. Not all non-state actors that seek to influence the activ­ ities of individuals and organizations purport to do so by setting and enforcing standards. Some might focus on political advocacy or prefer a watchdog role. At the same time, not all bodies that set standards purport to be transnational regulators, internal corporate codes of conduct being a good example. The challenge, then, is to distinguish trans­ national non-state regulators that have a strong claim to legitimacy as regulators performing a public function from all others that may or may not aspire to that status. The recent literature on global governance does not, therefore, contest the claim that there has been a proliferation of an ‘enormous range of mechanisms and means to regulate, manage, and control transnational activities’; rather, as Steven Bernstein argues, it seeks to identify the conditions under which it is ‘possible to speak of political authority absent centralized control of well-defined territorial spaces’ (Bernstein 2010, 94). For Bernstein, authority relationships ‘are those in which an actor or institution makes a claim to have a right to govern’ (Bernstein 2010, 95)—which helps us to distinguish watchdogs from regulators. In practical terms, he continues, ‘the term governance should be limited to institutions that perform some kind of regulatory function (creating, implementing, or adjudicating rules or normative standards) or where their decisions create an obligation to obey’ (Bernstein 2010, 95). But what is it that distinguishes an ‘empty claim to authority’ (Bernstein 2010, 95) from legitimate political authority? The literature on global governance and transnational law suggests the following criteria. First, the claim to authority must be generally accepted by the political community it seeks to regulate. Once we detach law from the state, it becomes possible to see ‘transnational networks of community as producing or inspiring their own law or, at least, being in a position to give or refuse legitimacy to forms of regulation addressed to them or developed with reference to them’ (Cotterrell 2008, 13). In the context of transnational non-state regulation, then, legitimate political authority arises when a transnational community ‘is subject to decisions by an authority that claims to have a right to be obeyed, and actors intersubjectively hold the belief that the claim is justified and appropriate’ (Bernstein 2010. 95). Transnational regulators such as the FSC that are often considered in the literature to have a strong claim to legitimate polit­ ical authority also command the support of a broad cross-section of stakeholders—the

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592  Comparative administrative law FSC’s political community. In the context of sustainable forestry standards, the relevant political community would include ‘forest landowners and forest management companies, producers of forest products and purchasers of those products further down the supply chain, retailers and consumers, as well as members of communities where certification occurs’ (Bernstein 2010, 109). While legitimacy does not necessarily require a regulatory monopoly, an aspiring regulator is unlikely to be able to claim legitimacy if it cannot claim some measure of effectiveness—which in the case of forestry certification requires an ability to ‘leverage brand values’ and to shape ‘the normative frameworks of the forestry world and . . . the actual practices of forestry operations’ (Meidinger 2006, 77). A second important factor in evaluating a regulator’s claim to legitimate political authority concerns the regulator’s expertise, and the relationship between that expert knowledge and democratic accountability. In many transnational non-state regulators, the involvement of experts ‘to develop standards in technical areas’ (Bernstein 2010, 101), such as food safety or plant health, contributes to the regulator’s legitimacy. Expertise, of course, is itself a form of power—epistemic power—that ‘can advantage some while disempowering others, thus leading to demands for increased accountability and d ­ emocracy’ (Bernstein 2010, 102). These tensions are not, of course, unique to transnational regulation. As the editors observed in the introduction to the previous edition of this collection, ‘mediating the tension between technocratic expertise and public accountability’ (Rose-Ackerman and Lindseth 2010, 9) is one of the key challenges of administrative law generally, and it remains the subject of many contributions to this second edition. In the context of transnational regulation, however, democracy and accountability are linked not to statist structures, but rather to practices of good governance and standard-setting, to which we now turn. A critical third dimension of legitimacy, then, concerns ‘good practices’ (Bernstein 2010, 102). These practices might be divided for analytic purposes into practices relating to governance generally and practices relating to standard-setting, adjudication, and enforcement. As far as governance is concerned, transnational non-state regulators have a strong practical incentive for an inclusive governance structure to the extent that their legitimacy and effectiveness require broad acceptance of their claim of a ‘right’ to govern. It is not surprising, then, that many prominent regulators have broadly representative governance structures, drawing on a wide range of stakeholders. The governance structure is also important in light of concerns from the global South about the rush, following the Washington Consensus of the 1990s ‘toward privatization and deregulation, which hollowed out much of the capacity of the nation state to develop indigenous responses to national, regional, and local social problems’ (Davis and Corder 2009, 81; see also Chimni 2005). In response to these sorts of criticisms, many transnational regulators have intensified their efforts to include and facilitate representation from the global South in their decision-making and standard-setting processes, with some even expressly mandating North-South balance in their governing structures (Meidinger 2006, 53). A second dimension of ‘good practices’ concerns the procedural norms that govern the standard-setting, adjudication, and enforcement activities of transnational regulators. It is not surprising that many of the norms governing the standard-setting process reflect the practices of domestic administrative law in a number of jurisdictions, typically involving principles of participation, transparency, and accountability (Meidinger 2006, 67; Bernstein 2010,

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Transnational non-state regulation and domestic administrative law  593 102). And while there is considerable debate around how these principles should be oper­ ationalized, there is a growing consensus on the importance of these and related values of good governance, and their significance for the legitimacy of the particular transnational regulator. So regulatory best practices are increasingly being generated and reinforced in the transnational sphere itself, with private meta-regulators such as the ISEAL Alliance seeking to infuse in its members, through its Code of Good Practices, ten ‘credibility’ principles: sustainability, improvement, relevance, rigour, engagement, impartiality, transparency, accessibility, truthfulness, and efficiency.29 Transnational non-state regulators that satisfy these criteria—that claim authority over a transnational community and are generally accepted by that community as a legitimate political authority, that have expert knowledge in the regulatory domain while including mechanisms for democratic accountability, and that exemplify good practices in their governance structures and regulatory functions—have the strongest claim to be taken seriously as transnational regulatory authorities by the state. But what would it mean for a transnational regulatory body to be taken seriously by the state, and how precisely should the state calibrate its response? Before we answer this question, it might help first to consider what it would mean not be taken seriously. For one thing, it is unlikely that any state institution would formally recognize, incorporate, or endorse any standard developed by a regulator that does not meet the criteria of legitimacy. It would likely adopt a more isolationist approach. At best, to the extent that the purported regulator found itself in domestic litigation, it would likely be treated as a ‘mere’ private actor whose conduct would be subject to private law principles. Any attempt to enforce a standard against a non-compliant member, for instance, would be a private dispute to be settled by reference to, say, principles of contract law.

4.  PRINCIPLES FOR INTER-AUTHORITY ENGAGEMENT But what of transnational non-state regulators that have a strong claim to be taken seriously by the state? How could the state respond? We have already considered and seen examples of one sort of response. States could respond legislatively, incorporating transnational regulation into domestic law (DeBellis 2011, Strauss 2013, McAllister 2014),30 or—particularly in common law jurisdictions—judicially, building transnational standards into norms of reasonable conduct. Alternatively, transnational non-state regulators with a strong claim to legitimacy could be treated analogously to domestic private regulators performing a public regulatory function—along the lines of Datafin and Yeap Wai Kong—with a commensurate degree of deference given to them. All of these options essentially treat the transnational regulator functionally as a domestic entity for the purposes of administrative law. On this model, domestic law essentially engages with transnational regulation, but on its own terms.

29   See http://www.isealalliance.org/our-work/defining-credibility/credibility-principles, accessed 23 October 2016. 30   Incorporation of transnational private standards into domestic law, in turn, raises import­ant public law questions about publication and access: see Strauss (2013).

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594  Comparative administrative law A third distinct response is suggested by some of the recent literature on pluralist jurisprudence, particularly the work of Nicole Roughan (2013). According to Roughan, jurisprudential accounts of authority developed in the twentieth century—in respect of which Joseph Raz has been particularly influential—are unable to account for legal pluralism, whether between states and indigenous authorities such as the Maori in New Zealand or between the state and transnational authorities. Specifically, a Razian account of authority is unable to account for inter-authority relationships, defined in our time by the ‘complex web of overlapping and conflicting powers, norms, and regimes, spread across local, federal, regional, international, supra-national, and non-state hosts’ (Roughan 2013, 43). For her part, Roughan proposes a theory of ‘relative authority’ that ­‘integrates inter-authority relationships into the conditions for those authorities’ legitimacy’ (Roughan 2013, 136). Crucially for Roughan, under conditions of pluralism, authority can best be understood and evaluated in a relational or ‘relative’ way: [This] account of relative authority explains authority as a power that is plural and relative rather than singular and exclusive; and entwines the conditions of plural authorities’ legitimacy for their subjects, so that each can be legitimate only if they coordinate, cooperate, and tolerate one another as the particular balance of procedural and substantive reasons requires (Roughan 2013, 149).

A full account of Roughan’s theory cannot and need not be provided here. What is crucial for our purposes, however, is her argument that, in our modern, pluralist world, an account of the state’s legitimate authority requires an evaluation of the relationship between the state and other authorities. In the context of, say, member state-EU relations or Crown-Maori relations (two examples Roughan discusses at length), her argument makes intuitive sense. However, in the transnational context, with its diversity of non-state bodies, the appropriate relationship between state and transnational regulator might not be obvious. But Roughan is not deterred: ‘for, even if there are forms of strictly private transnational authority, which on their own do not feature overlapping or interactive subjects so as to trigger relative authority, these can still interact with . . . public authorities in ways that will generate relativity’ (Roughan 2013, 191) and states and other ‘public authorities might be required to recognize, coordinate, or simply tolerate the rules and obligations that such private authorities generate for their members’ (Roughan 2013, 191). Roughan’s notion of relative authority sits comfortably with the approach to domestic administrative law this chapter has been developing. First, it is both consistent with and supports the idea that administrative law has both a power-limiting and power-facilitating role. Domestic administrative law must therefore be able to determine when private claims of authority are unfounded, and ought to be resisted, and when good administrative policy requires deference and a facilitative role, supporting joint or cooperative governance practices. Second, state responses of isolation, incorporation, or (invoking Roughan) inter-authority engagement might be seen not as absolute positions in response to transnational non-state regulators, but different ways of calibrating the state’s response according to the strength of the regulator’s claim of legitimacy. The state might even tailor its response according to specific functions. For example, it might adopt a deferential, inter-authority approach to standard-setting, but insist on the domestic incorporation of enforcement mechanisms. Third, even more challenging to traditional ways of think-

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Transnational non-state regulation and domestic administrative law  595 ing about administrative law would be the state’s response to functionally integrated and institutionally sophisticated transnational non-state regulators. For example, consider ICANN’s proposed transformation as described by The Economist: as a ‘new kind of international organisation . . . largely independent of national governments’ with its own ‘government (the organisation’s board), a constitution (its by-laws, which include its mission and “core values”), a judiciary (an “independent review process,” which leads to binding recommendations) and a citizenry of sorts (half-a-dozen “supporting ­organisation” and “advisory committees”, which represent the different interest groups)’ (The Economist 2016, 55–6). If ICANN takes something like this form, the legal relationships that develop between domestic administrative law and the transformed ICANN would put to a practical test the creativity and conceptual plasticity of contemporary legal theory and practice. It will show us the fit between our legal concepts and the reality of a changing and distinctly pluralist legal world.

CONCLUSION Despite all the changes in transnational non-state regulation described in this chapter and their profound impact on so many activities, professions, and organizations, domestic administrative law has not yet acknowledged these changes in any meaningful way. Certainly, at least in the common law tradition, it has the basic tools to improvise a response, drawing on principles governing private regulators in the domestic sphere and extrapolating to transnational non-state actors. But with the emergence of transnational non-state regulation as a fixture in the global legal landscape, domestic legal orders have little choice but to develop coherent legal responses. This chapter offers some suggestions as to how, through the lens of domestic administrative law, this work might proceed. As domestic administrative lawyers contemplate this task, however, it is important to bear in mind three larger contextual factors. First, as this chapter implies, the challenges of transnational non-state regulation for administrative law are symptomatic of a broader shift away from a state-centric understanding of law itself. Any move away from the state as the sole source of legal authority opens the door to more inclusive definitions of law that find law not only in transnational organizations, but equally in customary or indigenous communities, religious institutions, and even in the ubiquitous worlds of the Internet and e-commerce. It is therefore part of a larger shift away from a positivist, statecentric conception of law toward a legal-pluralist jurisprudence. Second, these challenges are taking place against a backdrop of the increasing economic power of multinational corporations and their growing political clout relative to many states. And while claims about the decline of the state are often exaggerated (Coe et al. 2007), it is increasingly difficult for many states, acting on their own, to regulate the most powerful multinational corporations. Transnational non-state regulators might therefore fill a regulatory lacuna when states are unable or unwilling to regulate. Third, and finally, in our efforts as administrative lawyers to adapt to changes in the global regulatory landscape, we must also be conscious of important changes in the global political economy and, in particular, the resurgence of state capitalism—in its multiple forms—in countries from China to Singapore to Brazil. What is crucial from an administrative law perspective is that as states become shareholders, the relationship

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596  Comparative administrative law between state-as-regulator and state-as-owner becomes much more complicated (Wang 2014). Arms-length institutions (such as the independent regulatory authorities discussed elsewhere in this volume)31 might not always be sufficient on their own to ensure regulatory fairness and efficiency, even allowing for many of the laudable social, economic, and developmental goals and practices of capitalist states (Tan et al. 2015; OECD 2015). Transnational non-state regulation is no panacea. But it may well play an important complementary role in checking concentrated forms of power and facilitating good administrative practices beyond the confines of the modern state.

REFERENCES Barak-Erez D. and O. Perez (2013), ‘Whose Administrative Law is it Anyway? How Global Norms Reshape the Administrative State,’ 46 Cornell International Law Journal, 455–97. Bernstein, S. (2010), ‘When is Non-State Governance Really Governance?’ Utah Law Review 2010(1), 91–114. Cafaggi, F. (2011), ‘New Foundations of Transnational Private Regulation,’ Journal of Law and Society 38(1), 20–49. Cafaggi, F. (ed.) (2012), Enforcement of Transnational Regulation: Ensuring Compliance in a Global World, Cheltenham, UK and Northampton, MA: Edward Elgar. Chan, S.K. (2010), ‘Judicial Review: From Angst to Empathy,’ Singapore Academy of Law Journal 22(2), 469–89. Chimni, B.S. (2005), ‘Co-option and Resistance: Two Faces of Global Administrative Law,’ New York University Journal of International Law and Politics 37(4), 799–827. Coe, N.M., P.F. Kelly, and H.W.C. Yeung, (2007), ‘The State’ (Chapter 7) in Economic Geography: A Contemporary Introduction, Malden, MA: Blackwell, 2007, pp. 187–222. Cotterrell, R. (2008), ‘Transnational Communities and the Concept of Law?’ Ratio Juris 21(1), 1–18. De Bellis, M. (2011), ‘Public Law and Private Regulators in the Global Legal Space,’ International Journal of Constitutional Law 9(2), 425–48. Davis D. and H. Corder (2009), ‘Globalisation, National Democratic Institutions and the Impact of Global Regulatory Governance on Developing Countries’ in Hugh Corder (ed.), Global Administrative Law: Innovation and Development, Cape Town: Juta, pp. 68–89. de Búrca G. (2010), ‘The European Court of Justice and the International Legal Order After Kadi,’ Harvard International Law Journal 51(1), 1–49. Harlow, C. and R. Rawlings (2009), Law and Administration, 3rd ed., Cambridge, UK: Cambridge University Press. Hoehn, F. (2011), ‘Privatization and the Boundaries of Judicial Review’ (2011) Canadian Public Administration 54(1), 73–91. Krisch, N. (2010), Beyond Constitutionalism: The Pluralist Structure of Postnational Law, Oxford: Oxford University Press. Light, S.E. and M.P. Vandenbergh (2016), ‘Private Environmental Governance’ in Lee Paddock and Robert Glicksman (eds), Decision Making in Environmental Law, Encyclopedia of Environmental Law, Cheltenham, UK and Northampton, MA: Edward Elgar, 253–70. McAllister, L.K. (2014), ‘Harnessing Private Regulation,’ Michigan Journal of Environmental and Administrative Law 3(2), 291–420. Meidinger, E. (2006), ‘The Administration of Private-Public Regulation: The Case of Forestry,’ European Journal of International Law 17(1), 47–87. Merrills, J.G. (2011), International Dispute Settlement, 5th ed., Cambridge, UK: Cambridge University Press. OECD (2015), State-Owned Enterprises in the Development Process, Paris: OECD Publishing. Pauwelyn, J. (2012) ‘Is It International Law or Not, and Does It Even Matter?’ in J. Pauwelyn, R.A. Wessel, and J. Wouters (eds), Informal International Lawmaking, Oxford: Oxford University Press, pp. 125–61. Rose-Ackerman, S. and P. Lindseth (2010), ‘Comparative Administrative Law: An Introduction’ in RoseAckerman and Lindseth (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA: Edward Elgar. Roughan, N. (2013), Authorities, Oxford: Oxford University Press.

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  See, for example, chapters by Arun K. Thiruvengadam and Lorne Sossin.

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Transnational non-state regulation and domestic administrative law  597 Scott, C., C. Fabrizio, and L. Senden (2011), ‘The Conceptual and Constitutional Challenge of Transnational Private Regulation,’ Journal of Law and Society 38(1), 1–19. Slaughter, A-M. (2005), A New World Order, Princeton: Princeton University Press. Strauss, P.L. (2013), ‘Private Standards Organizations and Public Law,’ William & Mary Bill of Rights Journal 22, 497. Tan, C.H., D.W. Puchniak, and U. Varottil (2015), ‘State-Owned Enterprises in Singapore: Historical Insights into a Potential Model for Reform,’ Columbia Journal of Asian Law 28(2), 61–97. The Economist (2016), ‘We, the Networks’ (5 March), pp. 55–6. Van Heesen-Laclé, P. and A. Meuwese (2007), ‘The Legal Framework for Self-Regulation in the Netherlands,’ Utrecht Law Review 3(2), 116–39. Verbruggen, P. (2009), ‘Does Co-Regulation Strengthen EU Legitimacy?’ European Law Journal 15(4), 425–41. Wang, J. (2014), ‘The Political Logic of Corporate Governance in China’s State-Owned Enterprises,’ Cornell International Law Journal 47, 631–69. Wright, C. (2011), ‘The Equator Principles’ in Thomas Hale and David Held (eds), Handbook of Transnational Governance, London: Polity, 229–36.

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PART B ADMINISTRATIVE LAW BEYOND THE STATE: THE CASE OF THE EU

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36.  A framework for historical comparison of control of national, supranational and transnational public power Peter Cane

In a recently published book1 I developed a framework, for thinking comparatively and historically about regimes for controlling administrative power, which explores how the distribution of public power might affect the way that it is controlled. The approach rests on a reconceptualization of traditional separation-of-powers analysis,2 and it takes seriously the ‘stickiness’ of legal institutions and norms. I applied that framework to three common-law legal systems: the English, the US and the Australian. The purpose of this chapter is to explore, in a very preliminary way, whether and (if so) how the framework might be used to understand the relationship between domestic, supranational and transnational regimes for controlling public power. The first part of the chapter provides the main outlines of the framework of analysis. The second part briefly summarizes the application of the framework to governmental arrangements in the three national systems. The third part lays some groundwork for application of the framework to governmental arrangements at the supranational level of the EU and at the transnational level.

1.  THE FRAMEWORK 1.1  Distribution of Power The framework adopts the concept of a ‘system of government’ as the unit of analysis of the way public power is distributed. A system of government is understood as a set of institutions,3 norms and practices concerned with the distribution of public power. The way power is distributed in any particular system of government is plotted along various ‘coordinates’. One ‘graph’ locates systems of government according to the degree to which public power is ‘concentrated’ or, by contrast, ‘diffused’. Concentration and diffusion both involve ‘distribution’ (or, in more traditional language, ‘separation’) of power. Diffusion involves distribution and sharing of one and the same sort of power (e.g., legislative, executive, bureaucratic or judicial) between various institutions that are   Cane 2016, especially Ch. 1.   Cane 2015a. 3   I use the term ‘institution’ as a rough synonym of ‘organization.’ In the mainstream ­‘institutional studies’ literature it tends to be used more broadly to refer to any norm-based social practice. Note that I define a ‘system’ (and a ‘regime’) in terms of a ‘set’. ‘Set’ is often used to indicate a lack of system. In my usage, a ‘system’ need not be integrated or stable while, conversely, a ‘set’ may be. 1 2

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602  Comparative administrative law ‘­coordinate’ with one another and which, by virtue of the fact that the power is shared amongst them, must cooperate with each other to achieve exercise of the power as consistently as possible with their respective goals and objectives. In terms made famous by George Tsebelis (2002) diffusion of power creates ‘veto players’. In Tsebelis’s sense, the President and the two Houses of Congress are each veto players in the US legislative system, as are coalition political parties in a parliamentary system. The standard rationale for this mode of separation is to limit government and, thereby, protect citizens’ rights. By contrast, concentration involves the allocation of different types of power to separ­ ate institutions, each of which can use the particular type of power more-or-less unilaterally to promote its own policy objectives and preferences. For instance, Australian law draws a very sharp distinction between judicial and executive power, and provides, as a general rule, not only that non-judicial bodies cannot exercise judicial power but also that judicial bodies cannot exercise non-judicial power. The main rationale for this mode of separation is to strengthen judicial power as a tool for controlling the exercise of legislative, executive, and bureaucratic power by preventing its being either excessively ‘diluted’ by being shared with holders of these other types of power, or ‘contaminated’ by judicial participation in the exercise of these other types of power. Concentration is designed not to promote coordination and cooperation between institutions, but to maintain a clear distance between them. Ironically, concentration ‘separates’ power more cleanly than diffusion. Power may be diffused or concentrated either (or both) vertically and horizontally. A classic mode of vertical diffusion is federation, in which power is distributed amongst various ‘levels’ of government. ‘Horizontal distribution’ refers to the way power is allocated at any particular ‘level’ of government within a (multi-level) polity. Power may also be diffused or concentrated ‘functionally’ or ‘socio-politically’ (or in both ways). The classic trio of government functions are legislative, executive and judicial. However, there is no magic (except, perhaps, religious or mystical) in the number three, and other governmental functions may be identified – a ‘bureaucratic’ function, for instance. Or the executive function may be divided (as Locke did) into two – the domestic and the foreign.4 ‘Socio-political’ diffusion/concentration refers to the distribution of public power amongst institutions identified with various ‘estates’ or ‘interests’ or ­‘constituencies’. In mediaeval England, for instance, public power was distributed amongst the monarchy, the ‘Lords’ (the aristocracy and the Church), and the ‘Commons’. Typically, in such a system, power is typically not strongly divided functionally. Rather, various interests participate in various ways, and in various institutions, in the exercise of various governmental functions. It is important to stress that (1) diffusion and concentration, vertical and horizontal, functional and socio-political, are not binaries but coordinates and, consequently; (2) any particular system of government will sit somewhere in the field bounded by these coordinates. So, for instance, in various systems power: (a) will be more-or-less diffused and concentrated; (b) may (in principle, anyway) be divided both functionally and sociopolitically; and (3) may be distributed both vertically and horizontally.

4   I am grateful to Bruce Ackerman for pressing me on this point. See Ackerman (Chapter 2, this volume).

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Historical comparison of control of public power  603 The concentration/diffusion parameters should not be identified with the popular analytical distinction between presidential and parliamentary systems of government. This contrast focuses on the functional distribution of legislative and executive power. The analytical framework offered here is much broader in application – i.e. ‘public power’. Nor should the ‘functional’ parameter be identified with tripartite ‘separation of powers’ in the form embedded within the first three articles of the US Constitution (for instance). Classic separation of powers is a much narrower frame of analysis than ‘functional’ distribution. 1.2  Control of Power In relation to the way power is controlled, the suggested unit of analysis is the ‘control regime’. A control regime is defined as a set of institutions, norms and practices concerned with control of public power. A control regime is conceptualized as a subsystem of a system of government. The parameters of analysis of control regimes are ‘checks-and-balances’ and ‘accountability.’ As a mode of control, checks-and-balances is characteristic­ally associated with diffusion of power, and accountability is characteristically associated with concentration of power. Under diffusion, sharing power between institutions enables each to ‘check’ the other. ‘Checking’ has two connotations: one is stopping or delaying, as in ‘checking someone’s progress’. The other is supervising – as in ‘checking up on’ someone or ‘keeping an eye’ on them. Thus, for instance, Congress can both check the legislative ambitions of the President (in the first sense), and oversee the President’s ‘execution of the laws’ (in the second sense). By contrast, under concentration, autonomy in the exercise of power enables one institution to use that power to hold others ‘to account’. A paradigm example of accountability – formally and theoretically at least – is ‘ministerial responsibility’ to Parliament in the English system of government. Responsibility (which brings with it potential loss of office) is the price that governments in parliamentary systems pay for the large amounts of autonomous (that is, concentrated) power they enjoy by virtue of the degree of control they can exercise over the legislature and bureaucracy. Once again, it is important to stress that these two modes of control are parameters of a field, not binaries. In other words, just as various systems of government may contain elements of both concentration and diffusion of power, they may also incorporate control regimes that combine checks-and-balances and accountability in various proportions and ways. 1.3  Hypothesis about the Relationship between Distribution and Control of Power The final component of the analytical framework offered here is a hypothesis about the relationship between distribution and control of power. The hypothesis is that particular similarities and differences between various control regimes may be partly or selectively explicable by reference to similarities and differences between the systems of government of which they are subsystems. This hypothesis may be understood as proposing that similarities and differences between control regimes may be explained ‘structurally’. Because complex social practices, such as governance and law, are ‘sticky’, ‘path-dependent’ phenomena, products of both continuity and change, structural analysis has a significant historical component.

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604  Comparative administrative law Einstein showed us that time is a dimension of physical space essential to understanding the natural world in which we live. Similarly, time is a dimension of ‘social space’. If law is conceptualized as ‘a system of rules’ – to adopt HLA Hart’s famous characterization (Hart 1961) – it may be analyzed at a particular point in time (‘synchronically’). However, if our interest is in law as a social practice, a diachronic (or ‘dynamic’) perspective is needed for its accurate portrayal and understanding. Of course, law may be understood (inter alia) as both a system of rules and a social practice, and so it invites both synchronic and diachronic analyses. The hypothesis does not entail that structural analyses provide the only or, indeed, even the best explanations of similarities and differences between control regimes. Other important modes of explanation include functional, political and cultural (or ‘ideational’) accounts (see, for example, Lindseth 2017). Functional accounts explain social phenomena in terms of social needs and aspirations that they address. Political arguments refer to the ‘interests’ of various social groups in the distribution of benefits and burdens of social life. Cultural arguments refer to understandings of, and ideas and evaluative judgments about, social phenomena. These various factors interact with each other in complex ways, and any particular social phenomenon may (and probably will) best be accounted for by reference to a complex interplay of different modes of explanation. The hypothesis does not treat systems of government as structures isolated from their functions, the interests that they serve, and the ideas that support them. On the other hand, it does presuppose that there can be explanatory value in highlighting structural factors, albeit with ­sensitivity to other complementary or alternative explanatory factors.

2. APPLYING THE FRAMEWORK TO NATIONAL SYSTEMS OF PUBLIC POWER In Controlling Administrative Power I applied this framework of analysis to the systems of government and control regimes of three polities: England (at the central government level), and the US and Australia (both at the federal level) (Cane 2016). Based on historic­al analysis of the development of the three systems of government, I argued that in the US, public power is relatively highly diffused; and that in both the English and Australian systems it is more highly concentrated. Next, based on an historical account of the development of the control regimes in each of the three systems, I demonstrated that as a mode of control, checks-and-balances is characteristic of the US system, but much less of the English and Australian systems. I then identified certain striking similarities and differences between the control regimes of the three systems and explored the plausibility of structural explanations for such similarities and differences. Juxtaposing various detailed features of the control regimes in the three systems (related, for instance, to administrative statutory interpretation, administrative adjudication, government liability, and access to government information), I concluded that although structural factors cannot explain all similarities and differences between various control regimes, they can account for a significant proportion of both similarity and difference.

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Historical comparison of control of public power  605

3. EXTENDING THE FRAMEWORK TO SUPRANATIONAL AND TRANSNATIONAL PUBLIC POWER The main burden of this chapter is to lay the groundwork for applying this framework to distribution and control of public power at the ‘supranational’ level of the European Union, and at the ‘transnational’ level. I say ‘groundwork’ because applying the framework requires detailed analysis of the systems being compared and contrasted. Both space and the limits of my knowledge preclude my undertaking this task. All I can do is to suggest how such a project might proceed. The starting point for the analysis is the nation-state. In Western histories, the origin of the modern nation-state, and of international law as the law of nation-states, is traditionally traced to the Peace of Westphalia in 1648. The birth of modern national, state-based control regimes is commonly dated to the late nineteenth and early twentieth centuries. In response to various major social, economic and political crises and upheavals, the governance capacities of nation-states were dramatically increased. However, social, political and economic change affected not only the internal governmental structure of nation-states, but also their relations with each other. From the middle of the nineteenth century, ‘permanent,’ treaty-based international organizations for the coordinated performance of governmental functions, such as provision of cross-border postal services and international standard-setting, became increasingly common. After the First World War, cooperation to promote international peace and security became a preoccupation pursued, following World War II, through the United Nations. The Second World War also provoked the creation of two major, regional, treaty-based governance regimes in Europe: the Council of Europe’s European Convention on Human Rights; and the sixnation European ‘Communities,’ which have morphed, in 60 years, into the European Union of 28 nation-states.5 At the global level, the Cold War slowed the pace of inter-governmental cooper­ ation. However, since the 1990s, so-called ‘international’ governance organizations have proliferated as global flows of goods, services and intangibles have increased massively. Just as the industrial revolution was a significant factor in the development of national systems of government and national control regimes from the late nineteenth century onwards, so the information and communications revolutions have been significant factors, from the late twentieth century onwards, in the development of ­supranational and transnational systems of government and their associated control regimes. Many of these recently-created governance organizations are treaty-based, but an increasing proportion are themselves creatures of other (treaty-based) international governance organizations. Private entities (such as ratings agencies) have also been created to meet specific needs for governance capacity at the global level. A characteristic feature of such international organizations and private regulatory entities is that they enjoy a degree of autonomy from the community of nation-states (Reinalda and Verbeek 2011), and it is primarily in that sense that they are ‘transnational.’

5   At the time of writing, the UK had voted to leave the EU and triggered the exiting process. But the practical implications of Brexit remain very unclear.

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606  Comparative administrative law Various  organizations and agencies occupy different locations along the autonomy axis.6 The term ‘supranational’ is used to describe a mode of governance of which the EU is the paradigm and most developed example. Supranational and transnational arrangements (like federal arrangements at the national level) share the characteristic that they superimpose on an existing layer of government an additional layer which, like the existing layer, has some sort of direct, unmediated relationship with the governed (as well as the lower layer of government). 3.1  Theorizing Governance Beyond the State The traditional picture of the relationship between national and international law is dualist. The subjects of international law are states, and states are conceptualized, by analogy with human beings living in the pre-Westphalian world, as juridical equals who can construct legal relations amongst themselves by exercising freedom of contract (that is, by treaty-making). The normative underpinning of international law is pacta sunt servanda. States may also (be taken to have given) consent to norms that are not expressly stated in treaties (‘custom’, ‘general principles of law’, ‘ius cogens’). Because states are juridical equals, no one of them has authority (normative power) over any other except by the other’s consent. The default voting rule amongst states is unanimity. Treaties have legal effect within states only by the free, positive action of the state. Disputes between states may be resolved by negotiation or voluntary submission to binding arbitration, but failing agreement, the only enforcement mechanism is individual self-help. In theory, at least, the creation of treaty-based international governance organizations represents a significant modification of these arrangements. If an international organization has institutional elements distinct from the group of its contracting member-states, and if the contracting states give those elements power to make norms, and agree to accept those norms and give them effect within their states, they have taken the first step away from self-government towards constructing an ‘external’ government. In a world of self-government (as in H.L.A. Hart’s ‘pre-legal’ world, Hart 1961, Ch. 5), there is no distinction between officials and non-officials, between those who make the norms that govern the society and those who are subject to them. The proliferation of treaty-based and non-treaty-based, public and private international organizations since the end of the Cold War can be understood as significantly accelerating the shift from self-government to government. And just as states were constructed (as juridical equals) using categories from the pre-Westphalian world, so modern theorists and norm-entrepreneurs have sought to construct emerging, ‘post-Westphalian’ modes of governance beyond the state using legal concepts and categories from systems of national governance that developed during the Westphalian period. Two categories have dominated the literature: constitutional law and administrative law. Constitutionalists seek to interpret governance beyond the state as a system of government analogous to a national system in a state such as the UK or France or Canada

6   Perhaps the ultimate expression of autonomy for non-state bodies is the capacity to make treaties with nation-states.

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Historical comparison of control of public power  607 (Paulus 2009). Those I shall (inelegantly) call ‘administrativists,’ by contrast, interpret governance beyond the state by analogy with the executive-cum-bureaucratic element of such a national system.7 Concerning control of public power, constitutionalists typically start with ‘constitutional’ ideas such as democracy, separation of powers and, perhaps, rule of law. Administrativists, on the other hand, begin with the concept of a regime for controlling administrative power and, more particularly, the normative component of such a regime (‘administrative law’ in their terminology) as it has developed since the late nineteenth century, most notably in the US (Stewart 2004). The term ‘global administrative law’ has been coined to refer to this phenomenon at the transnational level (Kingsbury et al. 2005). Typically, the concern of both constitutionalists and administrativists is the ‘legitimacy’ of governance and government. Constitutionalists look for legitimation in a constitution that embodies certain desirable structural features (including ‘separation of powers’) and promotes certain ‘values’ (such as ‘democracy’).8 Administrativists look to administrative law to discipline the exercise of one type of governmental power – administrative power – in the name of ‘values’ such as participation, transparency and reason-giving.9 In these terms, my aim in Controlling Administrative Power was to understand the relationship between the ‘constitution’ and the ‘administrative law’ of a governance system, not the legitimacy of either. In this chapter the focus is more widely on the relationship between the ‘constitution’ and the associated regime for controlling public power more generally, not just administrative power. On the other hand, my focus is less abstract than those of these literatures. Because of their concern with values and legitimation, both constitutionalists and administrativists tend to think abstractly in terms, for instance, of ‘democracy’ rather than versions of democracy, ‘separation of powers’ rather than local variants, ‘rule of law’ rather than various understandings of the rule of law. The basis of my methodology is analysis of the relationship between particular systems of government and particular control regimes. In terms of values, I try to explain why particular control regimes interpret similar abstract values in different ways by reference (in part) to the relationship between the particular regime and the system of government of which it is an element. 3.2  Supranational Governance As already noted, by far the most highly developed system of supranational governance is the European Union (EU) or, more precisely, the European Community (EC) under the First Pillar of EU law (concerned predominantly with economic integration), not the Second and Third Pillars (concerned with matters such as defence and social policy) which, along with the governance arrangements of the Eurozone, are not considered in this chapter. 7   Concerning the EU see, for example, Lindseth 2010. For criticism see Harlow 2002, 172–5. Concerning the global realm see, for example, Kingsbury 2008. 8   Democracy is typically understood in electoral terms. However, some theorists argue for a non-electoral understanding of democracy that brings constitutionalism closer to administrativism: see, for example Macdonald and Macdonald 2006; Rose-Ackerman in this volume. 9   See, for example, Harlow 2006.

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608  Comparative administrative law 3.2.1  The EU system of government The EU system of government is extremely complex and highly unstable. The root cause of both characteristics is the same: the EU is a treaty-based organization dependent for its existence and continuance on the present and future consent of its Members – the (now) 28 nation-states of the Union (see Lindseth in this volume). These states are extremely diverse constitutionally, legally, governmentally, economically, socially, culturally and linguistically. This multi-faceted diversity adds significantly to the difficulty of analyzing and understanding the EU. Amongst themselves and vis-à-vis the Union, the Member States retain their Westphalian sovereignty. All claim the right, for instance, to withdraw from membership of the EU without needing to ‘secede’. On the other hand, each has agreed to share its internal, domestic sovereignty with the Union. Debates about where Westphalian sovereignty ends and domestic sovereignty begins are ongoing and often acrimonious. Moreover, at least since the UK joined the Union in 1973, the Member States have chronically and significantly disagreed about its nature and purposes, producing what is called a ‘multi-speed’ Europe. So, for instance, only a proportion of the Member States belong to the currency union that establishes the euro as a transnational medium of exchange (the ‘Eurozone’). In order to cope with such disagreement, the original voting requirement of unanimity, has been abandoned in many areas of the Union’s operations in favour of ‘qualified majority voting’ (QMV). For present purposes, the most important thing to observe about the EU system of government is that its basic design is socio-political, not functional: power is divided not by type but amongst various socio-political constituencies (see Majone 2005, Chs 3 and 5). The three constituencies of the EU are: (1) the Member States; (2) the Union; and (3) the people (the body of EU citizens made up of all the citizens of the various Member States, who are entitled to vote in elections for the European Parliament). The three interests represented by these three constituencies are, respectively; (1) the ‘inter-governmental’; (2) the ‘supranational’; and (3) the ‘popular’ or ‘democratic’. The various EU institutions (the Council, the Commission, the Parliament and so on) are the vehicles through which the power of the socio-political interests is expressed and exercised. EU ‘constitutional’ and ‘administrative’ law determine and regulate the functions of and interrelationships between the various institutions. A byzantine plethora of decisional procedures ­(including procedures for choosing the President and Members of the Commission, and for legis­ lating/rule-making) allocate power between these three constituencies and interests, in myriad different ways, in various different areas of Union activity and competence. Moreover, the balances struck have changed over time. For instance, the strength of the supranational interest in the legislative and policy-making processes waxes and wanes relative to that of the intergovernmental interest. Again, over the years, the role of the popular interest in law-making has been progressively strengthened and deepened as the involvement of the European Parliament in various areas of activity has moved from ‘consultation,’ through ‘cooperation’, to ‘co-decision’.10

10   Both the inter-governmental and the popular interests are significantly weakened by internal division. There are many disagreements amongst the Member States about the supranational interest. The popular interest is divided between the European ‘demos’ and the various ‘demoi’ of

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Historical comparison of control of public power  609 The predominant activity of the EU institutions is rule-making. Implementation and enforcement of EU law are mainly the province of the Member States (involving what is called ‘shared administration’).11 The distinctions between legislative, executive and bureaucratic power are of no formal significance in the EU context, nor is the distinction between primary, and secondary (and tertiary), legislation, at least in the sense that EU secondary (as well as tertiary) legislation is not ‘subordinate’ to primary legislation so much as supplementary of it. It is true that EU law distinguishes between ‘legislative’ and ‘non-legislative’ acts of the Union (and, within the latter category, between ‘direct’, ‘delegated’ and ‘implementing’ acts) (Dashwood et al. 2011, 83–91). But this distinction does not coincide with that drawn between legislative power and the other types of governmental power in the national context. What is the role of the European Court of Justice (ECJ) in this set-up?12 The Court’s ‘mission’, its website tells us, is ‘to ensure that the law is observed in the interpretation and application of the Treaties’.13 In carrying out this mission, the Court has played and continues to play various different parts in the EU system. First, particularly in the early years, the ECJ contributed pivotally to building the capacity of European institutions and the European system of government. Most importantly, perhaps, it was the ECJ that forged a direct link between the European institutions and governmental system on the one side, and the citizens of Member States (as opposed to the Member States themselves) on the other by developing the doctrine of ‘direct effect’. It was also the ECJ that established the ‘supremacy’ of EU law over the laws of the Member States such that inconsistencies between EU law and the law of a Member State are to be resolved in favour of EU law. Moreover, the Court has exercised significant control over implementation of EU law by Member States, regulating the availability, nature and scope of domestic processes and mechanisms for challenging local implementation and remedying adverse outcomes. Secondly, the ECJ has assumed responsibility for maintaining and policing the allocations of power to the various socio-political interests within the EU under the constitutive treaties. In this respect, it performs a function in the system, analogous to that performed by the US Supreme Court, of providing governmental institutions with juridical weapons of self-defence against other power-holders who attempt to upset the socio-political balance by self-aggrandisement. Mainly at stake in such contests are rights of participation in decision-making ranging from the right to be consulted, through ‘cooperation’ to ‘co-decision’, the last bringing with it the right of veto. These two roles of the ECJ align it with the supranational interest. A third role, by contrast, aligns it with the popular interest. It has often been observed that the ECJ has constructed the relationship between EU institutions and EU citizens in terms of individual ‘rights’ (Craig 2015; Harlow and Rawlings 2014, 87–91). This move may, perhaps, be understood in US terms: individual rights define and defend the boundary between, in the US case, government and non-government, state government and federal government; and, in the EU case, between the supranational interest and the popular interest. In this the Member States. At the European level, political ‘parties’ are not as cohesive as their national counterparts. 11   ‘Governing with the state’ as Tanja A Börzel calls it (Börzel 2010). 12   For general discussion see Stone Sweet, 2011 and 1998. 13   http://curia.europa.eu/jcms/jcms/Jo2_6999/, accessed 27 October 2016.

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610  Comparative administrative law picture, rights attach to individuals not by virtue of their humanity but of their citizenship of a Member State (or, perhaps, of the Union). Such rights are designed not so much to protect fundamental human interests against government as to regulate the relationship between the government and non-governmental sectors of society (Cane 2016, 68–72; Cane 2015b). In terms of the analytical framework proposed here, governmental power in the EU system of government is significantly diffused – that is, divided and shared.14 However, the dimension of diffusion is not functional but socio-political – as between various constituencies and their respective interests.15 In this way, diffusion of rights of consult­ ation, cooperation and veto amongst EU institutions is more like vertical diffusion of power between the federal and sub-federal elements in a federated nation-state than akin to horizontal, functional diffusion of power between various governmental institutions at either federal or sub-federal level. At the national level, it is precisely in the vertical dimension that the contest takes place between (geographically-defined) constituencies and interests rather than between repositories of different types of governmental power. 3.2.2  The EU control regime Within the analytical framework suggested here, diffusion of power is associated with checks-and-balances as the characteristic mode of controlling power. This association can be seen clearly in the history and operation of the EU. As we have already noted, for many years, relations between the popular interest on the one hand, and the intergovernmental and supranational interests on the other, have been dominated by the Parliament’s attempts to secure for itself more power (ultimately veto power) in EU policy-making processes. A second manifestation of the association between diffusion and checks-andbalances is the history (alluded to earlier) of the unanimity and qualified-majority voting rules in the Council. The pathology of a system in which power is highly diffused is ­inertia.16 As the membership of the EU has become larger and more economically, politic­ ally, and culturally diverse, unanimity has increasingly become a dysfunctional voting rule, and has been replaced in more-and-more areas of decision-making by QMV.17 Thirdly, the association between diffusion and checks-and-balances is obvious in the role played by the ECJ as ringmaster in contests between different constituencies and interests. In this respect, there is a notable tension between the Court’s intermediating function and its self-identification as a supranational institution. In the former role, it must at least give the appearance of impartiality as between the competing interests – for instance, by always speaking univocally as ‘the Court’. By contrast, in the latter role its function is to promote the supranational interest over the interests of the Member States.

14   This is one of the major forces to which Daniel Kelemen attributes the judicialisation and legalisation of the EU political system that he describes in terms of ‘Eurolegalism’ (by analogy with the ‘adversarial legalism’ that R.A. Kagan attributes partly to diffusion of power in the US system in Kagan 2001): Kelemen 2011. 15   High concentration of socio-political power produces autocracy in the form, for instance, of ‘absolute’ monarchy. 16   See, e.g., Craig 2015, 358–60. 17   QMV is what Jason Koppell, writing about the transnational sphere, calls a ‘safety valve’ (Koppell 2010).

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Historical comparison of control of public power  611 It is the law regulating the establishment and operation of EU institutions, their relations between themselves and with Member States, and claims against EU institutions and Member States, that is referred to as ‘EU administrative law’. The name is misleading because, as we have seen, the distinctions between different types of public power are of no formal significance in EU law. The EU Treaties recognize four grounds of judicial review of exercises of power by EU institutions: (1) lack of competence; (2) infringement of an essential procedural requirement; (3) infringement of a treaty provision or of any rule of law relating to its application; and (4) misuse of powers; but they say nothing more about these grounds. The ECJ has developed the treaty provisions (especially (3)) by using them ‘as a vehicle for the application of more specific principles of good governance, such as equality’ (Craig 2015, 326) and anti-discrimination; and also by drawing eclectically on the administrative law of various Member States. For instance, French law provided inspiration if only because the treaty provisions were modelled on the jurisprudence of the Conseil d’Etat. The principle of proportionality was borrowed from German law, and English law has provided a source for principles of procedural fairness. Openness and transparency are often seen as the legacy of Scandinavian administrative law. As I have said, public power in the EU is quite highly diffused along socio-political, rather than functional lines. In Controlling Administrative Power, I found significant support for the hypothesis that similarities and differences between national control regimes may be explained, in part, by similarities and differences between national systems of government. Is the hypothesis also supported when we juxtapose national systems (in which power is functionally diffused/concentrated) and the supranational system of the EU (in which it is socio-politically diffused/concentrated)? All I can do here is to make a few more-or-less connected comments about how we might go about answering this question. First, in Controlling Administrative Power I argued that the existence of the office of ombudsman in both the English system and the Australian system and its absence from the US system can be explained partly in terms of the diffusion of power, both legislative and executive, between Congress and the President (Cane 2016, 164–5, 187–9, 199–200; Craig 2006, 829–32). The institution of ombudsman, I suggested, is more likely to be found in systems of government in which legislative and executive power are relatively highly concentrated than in systems where they are relatively highly diffused. Given that the EU system is one of relatively highly (albeit socio-politically) diffused power, the existence of the European Ombudsman presents a puzzle and an invitation to closer analysis of the EU system relative to the English system (and other national systems that contain the institution of ombudsman).18 Secondly, in Controlling Administrative Power I argued that the much more intense focus of US administrative law, compared with English and Australian administrative law, on records and reasons, and its procedural interpretation of rationality, could be explained partly at least by different understandings of the nature of bureaucratic power and the relationship between executive and bureaucratic governmental institutions (Cane 2016, Ch. 7). Like US law, EU law imposes on EU institutions a general obligation to

18   An issue not addressed in Peters 2005. See also Harlow 2002, Ch 5. Another fruitful topic for comparison would be auditing Cane 2016, 162–4, 182–7, 198–9.

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612  Comparative administrative law give reasons; and the concept of proportionality, which is central to judicial review in EU law, bears important similarities to the proceduralized concept of rationality (‘hard-look review’) found in US law. Since the 1990s, the General Court of the EU (formerly the Court of First Instance), in particular, has shown more willingness to engage in ‘highintensity review’ of decisions of fact and exercises of discretion (Craig 2015, 477–87; Harlow 2002, 165–71). We might speculate that similarities between US and EU law may be related to the relatively high degree of diffusion of power in both systems, even though the axis of division differs as between the two systems. Thirdly, like administrative rule-making procedure in the US system, decision-making (including rule-making) procedure in the EU system is highly structured and elaborately regulated (although the EU system offers much less scope than the US system for participation by individuals and corporations in rule-making processes). By contrast, administrative rule-making in the English and Australian systems is subject to much less formal, external regulation. In Controlling Administrative Power I argue that this difference between US law on the one hand, and English and Australian law on the other, is partly explicable by reference to the relatively diffused nature of the US system of government, the dynamics of the relationship between Congress, the President and the bureaucracy in the US system and, more generally, the relationship between government and society in the US as compared with England and Australia (Cane 2016, Ch. 8). US scholars, in particular, have shown great comparative interest in EU rule-making procedures, and the relationship between EU and US procedures clearly provides rich opportunities for comparative study using the sort of structural approach that I have outlined in this paper (Majone 1998; Kelemen 2010 and 2011). Fourthly, in Controlling Administrative Power I explore at some length the impact of changes in the structure and operation of government, in the name of ‘New Public Management’ (in England and Australia) and ‘Reinventing Government’ (in the US), on modes of controlling the exercise of administrative power (Cane 2016, Ch. 12). My general conclusion is that such changes have had no fundamental effect on control regimes. Analogous structural changes have occurred in the EU system in the shape of the creation of ‘agencies’ (Craig 2015, 401–5, 532–45) and ‘networks’ designed to increase governmental capacity at the EU level. Once again, comparative study of the nature and impact of such changes at the EU level as compared with the national level would, I suggest, help to broaden and deepen our understanding of the nature, allocation and control of public power (Pollitt and Bouckaert 2011, 256–62). 3.3  Transnational Governance 3.3.1  The transnational system of government The transnational system of governance, focused mainly on regulation, is at an early stage of its development. We might draw a parallel between its emergence and that of federal regulation in the US and central government regulation in Britain during the nineteenthcentury, associated with technological, social and economic change. The development of transnational regulatory regimes may be understood, similarly, as a form of centralization of power and a reaction to rapid and radical economic and technological change. According to a common understanding of regulation, it has three elements: standardsetting; monitoring of non-compliance; and enforcement of compliance. Multi-lateral

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Historical comparison of control of public power  613 treaty-making is a relatively complex and inefficient mode of standard-setting, and mechanisms for monitoring and enforcement of compliance with treaty standards tend to be weak in many areas. The need for increased transnational regulatory capacity has been met partly by creation of treaty-based international organizations, and international agencies established under their auspices. So-called ‘network ­governance’ – the establishment of informal regulatory ‘communities’ of governmental and non-governmental (civil society) organizations – is another important development. Private corporations provide a third, increasingly significant source of transnational regulatory capacity. Such organizations may be understood as involved in ‘governance’ to the extent that they enjoy and exercise more or less autonomy from the states (and their ­populations) whose activities they aim to regulate. Their existence and activities are generally ‘spontaneous’ and self-generated rather than the result of deliberate action by another party, such as a state. As at the supranational level, transnational regulators rely heavily on states for monitoring and enforcement. However, given the relative lack of coercive capacity at the international level, non-coercive alternatives – such as market forces – play a crucial role in securing compliance with transnational hard and soft law. For present purposes, perhaps the most pertinent lack of transnational governance capacity is in the area of external control – ‘judicial review’ – of the activity of regulatory organizations, agencies and en­tities. The transnational regulatory regime that has the most developed mechanisms for reviewing regulatory activity is the WTO; but even here, the ‘administrative law’ of the WTO is a by-product of settling disputes between Members about interpretation of the WTO treaties as they affect Member States’ decision-making processes (Cassese 2005), and not of direct review of WTO regulatory standards or conduct (Cass 2001; Stewart et al. 2011). National and supranational courts exercise a certain amount of control over transnational regulators, but such control is very rare. The fact that the main activity of transnational regulators is standard-setting (or, put another way, rule-making) suggests that analysis of their internal structure in terms of a functional principle of institutional design is unlikely to be useful or even possible. Rather, we are likely to be able better to understand such organizations in terms of a socio-political design principle.19 At the transnational level, the interests typically at stake in regulation may be referred to as ‘the membership interest’, ‘the transnational interest’, ‘the regulated interest’ and ‘the popular interest’ respectively. The constituencies associated with these interests are, respectively, the members of the organization, whether states, governmental agencies or NGOs; the organization itself; the ultimate addressees of the standards set by the organization; and the beneficiaries of regulation. In what, to my knowledge, is the most comprehensive and systematic study of the internal structure and dynamics of transnational regulatory organizations (covering 25 entities), Jonathan Koppell (2010) identifies two models of what he calls ‘global governance organisations’ (GGOs): traditional and hybrid.

19   Even so, some transnational regulators – notably private corporations – are unlikely to be amenable to this form of analysis either. Like private and privatized regulation, and self-regulation, at the national level they raise meta-regulatory issues (who regulates the regulators?) that will not be considered in this chapter.

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614  Comparative administrative law Traditional GGOs feature. . .a representative body with all members participating in annual or biannual meetings. A subset of this group convenes more regularly in ‘intermediate bodies’ that are more engaged in the day-to-day operations of the organisation. . .The traditional GGO has [a]. . . familiar bureaucratic component. . .[and] tends to be centralized and functional. . .The hybrid GGO model is associated with specialized representation (i.e., entities join the GGO through intermediate bodies defined by their interests) or nonrepresentative arrangements (i.e., the organisation is governed by individuals who do not represent member nations, firms, or groups). . ..Hybrid GGOs often keep rule-making in the members’ hands through working groups or technical committees, giving the bureaucracy a facilitative role (Koppell 2010, 295–6).20

Koppell also identifies two approaches to rule-making, which he refers to as the ‘forum’ and ‘club’ approaches respectively. The former: is highly structured with binding formal requirements creating clear opportunities for members to influence the process . . ..[It] is more permeable for non-members . . ..[GGOs that adopt the club approach] are more likely to have closed membership. . ..This makes a more informal rulemaking process less threatening. . .[Traditional] GGOs are associated with forum rule-making (Koppell 2010, 297).21

Koppell (2010, 300–301) finds that ‘many of the most venerable and well-known inter­ national organizations, including the WHO, IAEA, ILO, UPU,22 and most governmental GGOs’ are traditional in structure and take a forum approach to rule-making. Three of the ‘most influential and controversial’ of the 25 organizations studied, including the WTO, are hybrid, and adopt a club approach to rule-making amongst a consensusdriven closed membership. Amongst the total population of GGOs studied by Koppell, a majority adopt a forum approach to rule-making and are roughly equally divided between traditional and hybrid structure. For present purposes, three important points emerge from Koppell’s study. First, the executive/bureaucratic components of various international organizations play a moreor-less active, autonomous, ‘policy-making’ role depending on the degree of cohesion and identity of interest amongst the organization’s members.23 Secondly, a possible analytic­al proxy for the regulated and popular interests is the accessibility of a GGO’s processes to participation by non-member interest groups. Here, Koppell (2010, 300) distinguishes between three degrees of accessibility that he calls (from least to most open) ‘corporatism’, ‘concertation’ and ‘pluralism’. [Concertation]. . .sees interested parties drawn into the organization, particularly through the rulemaking process. . ..[T]he GGO has a deep need to promulgate rules that are acceptable to concerned interests. Without their adherence, the organizations collapse.

  See also Koppell 2010 Ch 2.   See also Koppell 2010 Ch 5. 22   World Health Organization; International Atomic Energy Agency; International Labour Organization; Universal Postal Union. 23   The relative technicality and complexity of the regulatory issues in any particular sector, and the relative expertise of the bureaucrats, are other important factors. See, for example, Busch 2014; Bauer and Ege 2014. 20 21

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Historical comparison of control of public power  615 Koppell finds that pluralism is extremely rare in transnational regulatory processes: corporatism and concertation dominate interactions between GGOs and interest groups. We may conclude that the regulated and popular interests at transnational level, like the popular interest in the EU system, are the least well-represented of the four interests in regulatory decision-making processes. Thirdly, based on Koppell’s research, we may conclude that transnational regulatory organisations are ranged at various points along the concentration/diffusion axis. This conclusion leads to the question of whether they are (correspondingly) arrayed along the accountability/checks-and-balances axis. 3.3.2  The transnational control regime At the national level, typical organs of ‘accountability’ (in the particular sense I have given the term in this chapter and elsewhere) are legislatures (in parliamentary systems), courts, tribunals, ombudsman, and other more-or-less institutionalized and formalized review and complaint mechanisms. As we have seen, at the transnational level there are few such organs, especially independent external bodies.24 For this reason alone, we might expect checks-and-balances to be the prime mode of control at this level, their relative strength in any particular system depending on the degree of diffusion of power in the system. Koppell (2010, 302) finds that GGOs that have a ‘traditional’ decision-making structure and adopt the ‘forum’ approach to rule-making (including most governmental GGOs) ‘hew[] very closely to normative expectations imported from the domestic context’. GGOs that have a ‘hybrid’ decision-making structure and adopt the ‘club’ approach to rule-making ‘build authority at the expense of legitimacy. . ..Membership is limited to nations (all three [GGOs in this category] are governmental) that are approved by existing members (Kopell 2010, 303). They rely successfully on market forces to secure the compliance of the regulated with the rules they make. In other words, the regulated comply because they have no practical choice to do otherwise. By contrast, GGOs that adopt the ‘forum’ approach to rule-making and are accessible to non-members balance ‘responsiveness’ to the regulated with ‘responsibility’ to the members. Koppell argues that they do this because, unlike organizations in the hybrid/club group, they are dependent on national governments for enforcement and on the cooperation of the regulated to maximize voluntary compliance. We may tentatively conclude that as might have been expected, transnational regulatory bodies sit at various points along the checks-and-balances segment of the control spectrum. In this context (as at the supranational level), the checks and balances (to the extent they exist) arise not from exercise of various types of power by various participants in decision-making processes, but rather from involvement of various constituencies and interests in decision-making processes. The position on the spectrum occupied by any particular transnational organization will be associated with the organization’s internal structure, its approach to rule-making, its accessibility to interest groups and its ­dependence on its members for enforcement of the rules it makes. Just as there are few accountability organs at the transnational level, there are ­effectively

24   Concerning internal complaint mechanisms see Grigorescu 2010 and de Wit 2010. Concerning the traditional international law approach to accountability see Brunée 2005.

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616  Comparative administrative law no reviewing bodies (like the ECJ) that can mediate between the various constituencies and interests that compete for power over transnational regulation. There are no independent, external bodies that can impose on transnational organizations the sort of ­(diffused) balance between interests required for a strong system of checks-and-balances. The result may be a concentration of decision-making power in one or other of the competing interests – at this level, typically the membership interest or, even more narrowly, the interests of one or a small group of states. Braithwaite and Drahos conclude, on the basis of theoretical reflection and extensive empirical research, that the ‘US state has been by far the most influential actor in accomplishing the globalization of regulation’ (Braithwaite and Drahos 2000, 27).

4. CONCLUSION In this (all-too-short) chapter, I have drawn a distinction between systems of government and control regimes and have conceptualized control regimes as components of systems of government. I have offered a framework for analyzing systems of government and control regimes in terms of distinctions between concentration and diffusion as patterns of distribution of public power, and accountability and checks-and-balances as modes of control of public power. I have also drawn a distinction between functional and sociopolitical distributions of public power. I have argued that the supranational system of government of the EU and transnational regulatory regimes are better understood as characterized by socio-political than functional distributions of power. There is no necessary relationship between socio-political and functional distribution. In fact, systems of socio-political distribution typically manifest weak functional distribution. The EU system of government provides perhaps the best example of this phenomenon. Power is widely (but unstably) diffused in that system amongst three constituencies, each representing a distinct interest. At the same time, none of these constituencies exercises a characteristic type of power. On the contrary, each shares in the exercise of various types of power. Similarly, at the transnational level power is distributed amongst four constituencies, each representing a particular interest. The analysis in this chapter has revealed certain significant features of functional and socio-political distributions of power. First, in either case, the distribution in any particular system may sit at various points along the concentrated/diffused spectrum. So, for instance, power is relatively more diffused functionally in the US system than in the English and Australian systems. Power is relatively diffused socio-politically in the EU system and has become more diffused over the history of the Union. At the transnational level, the picture is mixed. In some sectors and organizations power is relatively ­concentrated; and in general, concentration favours the membership interest over the organizational, regulated and popular interests.

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Historical comparison of control of public power  617

REFERENCES Bauer, M.W. and J. Ege (2014), ‘The Autonomy of International Bureaucracies’ in Soonhee Kim, Shena Ashley and W. Henry Lambright, Public Administration in the Context of Global Governance, Cheltenham, UK and Northampton, MA: Edward Elgar. Börzel, T.A. (2010), ‘European Governance: Governing with or without the State?’ in Martin Loughlin and Petra Dobner (eds), The Twilight of Constitutionalism?, Oxford: Oxford University Press. Braithwaite, J. and P. Drahos (2000), Global Business Regulation, Cambridge: Cambridge University Press. Brunée, J. (2005), ‘International Legal Accountability Through the Lens of State Responsibility,’ Netherlands Yearbook of International Law 36, 21–56. Busch, P.-O. (2014), ‘The Independent Influence of International Public Administrations: Contours and Future Directions of an Emerging Research Strand’ in Soonhee Kim, Shena Ashley and W. Henry Lambright, Public Administration in the Context of Global Governance, Cheltenham, UK and Northampton, MA: Edward Elgar. Cane, P. (2016), Controlling Administrative Power: An Historical Comparison, Cambridge: Cambridge University Press. Cane, P. (2015a), ‘Reconceptualising Separation of Powers,’ Amicus Curiae 101, 2–8. Cane, P. (2015b), ‘Two Conceptions of Constitutional Rights’ Insights (Durham University Institute of Advanced Study) 8 (3), 1–9, https://www.dur.ac.uk/ias/insights/volume8/, accessed 27 October 2016. Cass, D. (2001), ‘The “Constitutionalization” of International Trade Law: Judicial Norm-Generation as the Engine of Constitutional Development in International Trade,’ European Journal of International Law 12, 39–75. Cassese, S. (2005), ‘Global Standards of National Administrative Procedure,’ Law and Contemporary Problems 68, 109–126. Craig, P. (2006), EU Administrative Law, Oxford: Oxford University Press. Craig, P. (2015), UK, EU and Global Administrative Law: Foundations and Challenges, Cambridge: Cambridge University Press. Dashwood, A., M. Dougan, B. Rodger, E. Spaventa and D. Wyatt (2011), Wyatt and Dashwood’s European Union Law, 6th edn, Oxford: Hart Publishing. Grigorescu, A. (2010), ‘The Spread of Bureaucratic Oversight Mechanisms across International Organizations,’ International Studies Quarterly 54, 871–86. Harlow, C. (2002), Accountability in the European Union, Oxford: Oxford University Press. Harlow, C. (2006), ‘Global Administrative Law: The Quest for Principles and Values,’ European Journal of International Law 17, 187–214. Harlow, C. and R. Rawlings (2014), Process and Procedure in EU Administration, Oxford: Hart Publishing. Hart, H.L.A. (1961), The Concept of Law, Oxford: Clarendon Press. Kagan, R.A. (2001), Adversarial Legalism: The American Way of Law, Cambridge, Mass: Harvard University Press. Kelemen, R.D. (2010), ‘Adversarial Legalism and Administrative Law in the European Union’ in Susan Rose-Ackerman and Peter L. Lindseth (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA: Edward Elgar. Kelemen, R.D. (2011), Eurolegalism, Cambridge, Mass: Harvard University Press. Kingsbury, B. (2008), ‘Global Environmental Governance as Administration: Implications for International Law’ in Daniel Bodansky, Jutta Brunnée, and Ellen Hey (eds), The Oxford Handbook of International Environmental Law, Oxford: Oxford University Press. Kingsbury, B., N. Krisch, and R.B. Stewart (2005), ‘The Emergence of Global Administrative Law,’ Law and Contemporary Problems 68, 15–62. Koppell, J.G.S. (2010), World Rule: Accountability, Legitimacy, and the Design of Global Governance, Chicago: University of Chicago Press. Lindseth, P.L. (2010), Power and Legitimacy: Reconciling Europe and the Nation-State, Oxford: Oxford University Press. Lindseth, P.L. (2017), ‘Between the “Real” and the “Right”: Explorations along the Institutional Constitutional Frontier’ in Maurice Adams, Anne Meuwese, and Ernst Hirsch Ballin (eds), Constitutionalism and the Rule of Law: Bridging Idealism and Realism, Cambridge: Cambridge University Press. Macdonald, T. and K Macdonald (2006), ‘Non-Electoral Accountability in Global Politics: Strengthening Democratic Control within the Global Garment Industry,’ European Journal of International Law 17, 89–119. Majone, G. (1998), ‘Europe’s “Democratic Deficit”: The Question of Standards’, European Law Journal, 4: 5–28. Majone, G. (2005), Dilemmas of European Integration: The Ambiguities and Pitfalls of Integration by Stealth, Oxford: Oxford University Press.

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618  Comparative administrative law Paulus, A.L. (2009), ‘The International Legal System as a Constitution’ in J.L. Dunoff and J.P. Trachtman (eds), Ruling the World? Constitutionalism, International Law and Global Governance, Cambridge: Cambridge University Press. Peters, A. (2005), ‘The European Ombudsman and the European Constitution,’ Common Market Law Review 42, 697–743. Pollitt, C. and G. Bouckaert (2011), Public Management Reform, A Comparative Analysis: New Public Management, Governance and the Neo-Weberian State, 3rd edn, Oxford: Oxford University Press. Reinalda, B. and B. Verbeek (2011), ‘Policy Autonomy of International Organizations: A Challenge to International Relations Theory?’ in Richard Collins and Nigel D. White (eds), International Organizations and the Idea of Autonomy: Institutional Independence in the International Legal Order, London: Routledge. Stewart, R.B. (2004), ‘U.S. Administrative Law: A Model for Global Administrative Law?’ Law and Contemporary Problems, 68: 63–108. Stewart, R.B., M. Ratton and S. Badin (2011), ‘The World Trade Organization: Multiple Dimensions of Global Administrative Law,’ International Journal of Constitutional Law 9, 556–86. Stone-Sweet, A. (1998), ‘Constitutional Politics: The Reciprocal Impact of Lawmaking and Constitutional Adjudication’ in Paul Craig and Carol Harlow (eds), Lawmaking in the European Union, London: Kluwer. Stone-Sweet, A. (2011), ‘The European Court of Justice’ in Paul Craig and Grainne de Búrca, The Evolution of EU Law, 2nd edn, Oxford: Oxford University Press. Tsebelis, G. (2002), Veto Players: How Political Institutions Work, New York: Russell Sage Foundation. de Wit, E. (2010), ‘Holding International Institutions Accountable: The Complementary Role of Non Judicial Oversight Mechanisms and Judicial Review’ in A. von Bogdandy et al., The Exercise of Public Authority by International Institutions: Advancing International Institutional Law, Heidelberg: Springer.

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37.  EU Agencies 2.0: the new constitution of supranational administration beyond the EU Commission Johannes Saurer

1. INTRODUCTION By the mid-2000s the growing number of seemingly ever-stronger EU agencies came under increased political and legal criticism. Several Member States challenged the political adequacy and constitutionality of the more than 30 such bodies, which led the EU Commission to announce a moratorium on the establishment of new agencies.1 In fact, it had become more difficult over time to square the institutional reality of the broad expansion of the EU administrative sphere beyond the Commission with the thenconstitutional order. Since that time – not even a decade – far-reaching changes in the institutional setting and in the constitutional order of EU agencies have occurred.2 All in all the systemic changes are so profound that (to adapt a common phrase) an analogy to the evolution of the internet into the World Wide Web 2.0 seems justified. This chapter will address the ongoing shift to a new constitutional regime of agency administration. Section 2 lays out the institutional and constitutional status quo ante, against which the constitutional transformation will become visible. It will recall the traditional restrictive judicial doctrines on supranational agency administration, give a sketch of the institutional expansion, and summarize the political and constitutional critique. Section 3 describes how the global financial crisis of 2008 acted as a catalyst for a new wave of agency building that aimed at re-regulation and enhanced oversight of the financial sector. Section 4 then turns to the key elements of transformation. Here, the focus is on the agency-related amendments adopted by the Treaty of Lisbon and the subsequent constitution building through the EU judiciary. In particular, we will discuss five constitutional building blocks established by the judgment of the European Court of Justice (ECJ) of January 2014 on the European Securities and Markets Authority (ESMA). We will conclude with an outlook and suggestions for a future research agenda.

  European agencies – The way forward, COM(2008) 135 final, p. 10.   Terminologically, the ‘constitution’ of EU agencies encompasses all rules of the highest order of EU law that govern the establishment of EU agencies in terms of legal forms, institutional designs, procedures and competences. 1 2

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2. (RESTRICTIVE) JUDICIAL FOUNDATIONS, RISE AND CONSTITUTIONAL CRISIS OF EU AGENCIES Although it took until the 1990s for EU agencies to become a widely recognized phenomenon, their legal history goes back to the 1950s. In the case of Meroni v. High Authority of 1958 the European Court of Justice (ECJ) had to decide upon the legality of two specific entities operating under the then-European Coal and Steel Community (ECSC) that had been established by the Council under Belgian private law. These entities were entitled to levy fees on European enterprises. In the absence of any specific provisions in the ECSC Treaty of 1952 it was for the ECJ to establish a far-reaching doctrine on institutional differentiation and delegation.3 Agency administration was only lawful if it did not involve ‘discretionary power implying a wide margin of discretion which may, according to the use which is made of it, make possible the execution of actual economic policy.’4 This judicial doctrine was amended in 1981 in Romano v. INAMI.5 Mr. Romano had challenged a decision of INAMI on his pension claims. In this decision the ECJ established that ‘a body such as the Administrative Commission may not be empowered by the Council to adopt acts having the force of law.’6 This ruling was widely understood as a prohibition of normative legal acts of EU agencies (Chamon 2011, 1060–65; Skowron 2014, 260). The judicial foundations of agency administration in Meroni and Romano had long been understood to allow for the establishment of autonomous administrative entities beyond the Commission only in exceptional circumstances. However, the 1990s and 2000s witnessed an intensifying process of agency-building, with more than 30 EU agencies being established. The classification of competences (Griller and Orator 2010, 13–14; Chiti 2009, 1403–7; Harlow 2011, 460–61) ranges from data collection and information exchange as in the case of the European Environmental Agency (EEA) to decisionmaking vis-à-vis EU citizens and enterprises and quasi-rulemaking as in the cases of the trade-mark-related Office for Harmonization of the Internal Market (OHIM), the European Medicines Agency (EMA), the European Aviation Safety Agency (EASA) and the European Chemicals Agency (EChA). In the mid-2000s the system of EU agencies slipped into a constitutional crisis. As the EU treaties, even after the reforms of Amsterdam and Nice, did not mention EU agencies at all, a growing number of critics questioned the compatibility of the ongoing ­‘agencification’ (e.g. Scholten and van Rijsbergen 2014, 1226–44) with the EU constitutional order and claimed a violation of institutional balance. The most vivid critics included key Member State institutions such as the German Bundestag and the British House of Commons (Saurer 2010, 623–4). The Commission reacted with a conditioned moratorium regarding the founding of new EU agencies.7   ECJ, Case 9/56, E.C.R. 1957–58, 133, Meroni v. High Authority of ECSC.   Ibid., at pp. 152 and 154. 5   ECJ, Case 98/80, E.C.R. 1981, 1241, Romano v. INAMI; INAMI is the French acronym for the ‘Administrative Commission of the European Communities on Social Security for Migrant Workers’. 6   Ibid., at 20. 7   European agencies, n 1, p. 10. 3 4

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EU Agencies 2.0: the new constitution  621

3. GLOBAL FINANCIAL CRISIS AS A CATALYST OF AGENCY BUILDING The moratorium did not hold up for long. Rather, a new wave of agency building emerged as part of the EU’s reaction to the global financial crisis that was precipitated by the collapse of Lehman Brothers in 2008. Like many other political institutions around the globe, the EU began to develop institutional reforms to promote re-regulation and enhanced oversight of financial markets. It mandated a working group chaired by former IMF-Director and Bank of France Governor Jacques de Larosière to suggest alternatives to the formerly dominant ‘Lamfalussy process,’ which emphasized soft law, coordination and cooperation-oriented tools of financial regulation (Everson 2012, 8–9; Di Noia and Gargantini 2014, 2–3). Accordingly, the working group suggested instruments to strengthen the European supervisory arrangements to prevent the ‘kind of systemic and inter-connected vulnerabilities’ (de Larosière 2015, 6) that had proved to be disastrous in the financial crisis. As a result, the Council and European Parliament agreed to a set of EU regulations to establish the European System of Financial Supervision (ESFS). The ESFS encompassed three European Supervisory Agencies (ESAs) with operational tasks in banking, insurance and security, as well as the European Systemic Risk Board (ESRB)8 that is comprised of the heads of the ESAs and further EU institutions.9 With their quasi-rulemaking and supervisory competences, the ESAs – the European Banking Authority (EBA),10 the European Insurance and Occupational Pensions Authority (EIOPA),11 and the European Securities and Markets Authority (ESMA)12 – are among the most powerful EU agencies ever established. In their quasi-rulemaking function, the ESAs develop ‘draft regulatory technical standards’ that are subsequently submitted ‘to the Commission for endorsement’ as the respective Articles 10(1) of all three

 8   Regulation 1092/2010/EU of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board, O.J. 2010, L 331/1.  9   For another expression of the more positive view on EU agencies after the global financial crisis see Joint Statement and Common Statement of the European Parliament, the Council of the EU and the European Commission, July 19, 2012, http://europa.eu/about-eu/agencies/overhaul/ index_en.htm (March 27, 2016). 10   Regulation 1093/2010/EU of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC, O.J. 2010, L 331/12. 11   Regulation 1094/2010/EU of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC, O.J. 2010, L 331/48. 12   Regulation 1095/2010/EU of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, O.J. 2010, L 331/84 Regulation 1095/2010/EU of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, O.J. 2010, L 331/84.

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622  Comparative administrative law ESA-founding regulations state.13 Thus, the Commission’s act of issuing the rule is more of a formal nature. In their supervisory function the ESAs have specific competences for inquiries and sanctions for breaches of EU Law14 and for action in emergency situations.15 Subsequent regulations increased the ESA competences. Of particular importance is the short-selling Regulation 236/2012/EU,16 which confers specific powers on ESMA. Article 28 of Regulation 236/2012/EU provides for ‘ESMA intervention powers in exceptional circumstances.’ Section 1 reads: In accordance with [Article 9(5) of its founding regulation 1095/2010/EU] ESMA shall . . . either (a) require natural or legal persons who have net short positions in relation to a specific financial instrument or class of financial instruments to notify a competent authority or to disclose to the public details of any such position; or (b) prohibit or impose conditions on, the entry by natural or legal persons into a short sale or a transaction which creates, or relates to, a financial instrument other than financial instruments referred to in point (c) of Article 1(1) where the effect or one of the effects of the transaction is to confer a financial advantage on such person in the event of a decrease in the price or value of another financial instrument.

Article 28(2) of Regulation 236/2012 sets as the condition for an intervention the existence of a ‘threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union and there are cross-­border implications.’ Article 28, Sections (3)–(11) of Regulation 236/2012 provide detailed material and procedural conditions for an intervention. Article 28(12) of Regulation 236/2012 orders that an Article 28 measure adopted by ESMA shall prevail over any previous measure of a national financial sector agency. In the system of legal acts provided in Article 288 of the Treaty on the Functioning of the European Union (TFEU) – ­regulations, directives, decisions, recommendation and opinions – the intervention powers of ESMA noted above could best be classified as decisions without specific addressees. EU law doctrine acknowledges the legal instrument of such decisions of a more ‘generic’ nature as a complement to the instrument of decisions with specific individual addressees (Craig and De Búrca 2011, 107). From a comparative perspective, the EU’s recourse to agencies as a means of addressing a socio-economic context of crisis mirrors the historic experience of the United States in the New Deal era. As in the EU financial sector, the foundation of the New Deal agencies was driven by the functional pressure to address critical macroeconomic conditions, which in turn gave momentum to legal initiatives for administrative institution building (Rabin 1986, 1243–53). In the 1930s, the U.S. Congress established numerous federal agencies including the Federal Communications Commission, the Securities and Exchange Commission, and the National Labor Relations Board to confront the economic and social challenges that resulted from instabilities in the financial system and mass unemployment (Cane 2016, 89–90). These agencies became the groundwork of the modern U.S.

  Art. 10(1) Reg.1093/2010/EU, Art. 10(1) Reg. 1094/2010, Art. 10(1) Reg. 1095/2010.   Art. 17 Reg. 1093/2010/EU, Art. 17 Reg. 1094/2010, Art. 17 Reg. 1095/2010. 15   Art. 18 Reg. 1093/2010/EU, Art. 18 Reg. 1094/2010, Art. 18 Reg. 1095/2010. 16   Regulation 236/2012/EU of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps, O. J. 2012, L 86/1. 13 14

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EU Agencies 2.0: the new constitution  623 administrative state and an inspiration for administrative organization around the globe (Geradin 2005; Ludwigs 2011; Cane 2016, 134–5, 145).

4.  TRANSITION TO A NEW CONSTITUTIONAL ORDER The latest wave of EU agency-building in the financial sector has arguably had ambivalent effects. On the one hand, it raised the question of constitutionality with even greater urgency. On the other hand, it accelerated a process of transformation that started with the Treaty of Lisbon but initially, at least before the onset of the financial crisis, received little attention. That process gained significant momentum when the legal design of the EU financial sector agencies was challenged before the ECJ. 4.1  Agency-related Amendments of the Treaty of Lisbon The Treaty of Lisbon contributed to agency building in the financial sector through the adoption of several new treaty provisions. Although EU agencies were not included in the list of EU organs in Article 13 of the Treaty on European Union (TEU), various articles of the TFEU acknowledged their existence and their legal significance. Regarding their organization, Article 298 TFEU established a stable textual foundation for the supranational EU administration in general and EU agencies in particular. Article 298(1) TFEU reads: ‘In carrying out their missions, the institutions, bodies, offices and agencies of the Union shall have the support of an open, efficient and independent European ­administration.’ Article 298(2) TFEU then contains a legislative competence to lay out details and implementation.17 Regarding judicial review, Article 263 TFEU is equally important. Article 263(1) TFEU provides that the ECJ ‘shall also review the legality of acts of bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties.’ Article 263(4) TFEU extends the right of review under specified circumstances to private individuals. Article 263(5) TFEU empowers the EU legislator to expand the possibilities of judicial review through regulations. In addition, Article 277 TFEU provides that ‘any party may, in proceedings in which an act of general application adopted by an institution, body, office or agency of the Union is at issue, plead the grounds specified in Article 263, second paragraph, in order to invoke before the Court of Justice of the European Union the inapplicability of that act.’ Moreover, the Treaty of Lisbon expanded the material and procedural provisions with binding effect for EU agencies. Of particular importance are the guarantees for participatory democracy and transparency in Articles 10 and 11 TEU (Curtin et al. 2013, 5) 17   Art. 298 TFEU, it should be noted, became rather coincidentally the basic foundation for EU agency administration. It was only on grounds of a special initiative of Sweden aiming for a competence norm for EU rules on good administration, efficiency and transparency that the predecessor of today’s Art. 298 TFEU was included in the 2003 draft of the Treaty for a Constitution for Europe, Final report of Working Group V, ‘Complementary Competencies’, CONV 375/1/02 REV 1, p. 17; also ‘working document 13’, http://european-convention.europa.eu/docs/wd5/1931. pdf (January 12, 2015).

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624  Comparative administrative law and the EU Charter of Fundamental Rights – including guarantees of human dignity, democratic freedoms, business rights, transparency, data protection and the right to good administration (Craig 2012, 446). 4.2  Constitution Building Through the Judiciary: Five Constitutional Building Blocks Constitution-building at EU level is historically and intrinsically linked to the judiciary. The most famous narration in this regard is, of course, the idea that the ECJ’s judgments of Van Gend en Loos18 and Costa v. ENEL19 mark the beginning of the constitutionalization of the EU legal order (Stein 1981, 4–5; Weiler 1991, 2413–14). In a similar vein, the ECJ took on the task of working out the constitution for EU agency administration, when one of the newly founded agencies of the financial sector, ESMA, was challenged in front of the ECJ. The United Kingdom, home to one of the world’s leading financial markets and perhaps the most outspoken critic on EU financial regulation (Morgan 2012, 375–6), brought an action for annulment against the clause on short selling-regulation in Article 28(2) of ESMA-Regulation No. 236/2012. At the center of the argument was the claim that ESMA enjoyed too much discretion to make ‘choices [that] have very significant economic and policy implications.’20 The ECJ undertook a far-reaching judicial elaboration of the Treaty framework noted above. Clearly transcending the individual case, the ESMA judgment has amounted to an institutional acknowledgment of the entire EU agency landscape. 4.2.1  EU agencies: regulators with the force of law A first important constitutional building-block of the ESMA judgment is the acknow­ ledgment of EU agencies as regulators with the force of law. With regard to ESMA’s competence to regulate short-selling, the Court essentially reversed the holding in Romano that had explicitly forbidden administrative entities from adopting acts ‘having the force of law.’21 In ESMA, the ECJ rejected the U.K.’s challenge, citing the textual changes in the TFEU in favor of EU agency powers, ‘in particular the first paragraph of Article 263 TFEU and Article 277 TFEU, [which] expressly permits Union bodies, offices and agencies to adopt acts of general application.’22 With that, the ECJ has structurally established a reverse déni de justice-argument. Because there is judicial review, there could be lawmaking EU agencies, so the argument goes. This conclusion, however, does not seem compelling. To the contrary, it seems just as plausible to deny any intention of institutional legitimation in Article 263(1) and 277 TFEU. Rather, these articles could also be understood as expressions of the rule of law or the Rechtsstaatsprinzip or the fundamental right of effective judicial review (Article 47 of the EU Charter of Fundamental Rights) – providing access to the EU courts in 18   ECJ, Case 26/62, 1963 E.C.R. 1, Van Gend & Loos v. Nederlandse Administratie der Belastingen. 19   ECJ, Case 6/64, ECR 1964, 1253, Costa v. ENEL. 20   ECJ, Case C-270/12, ECLI:EU:C:2014:18, United Kingdom v. European Parliament and Council (ESMA), at 30. 21   Romano v. INAMI, footnote 6, at 20. 22   ESMA, footnote 20, at 65.

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EU Agencies 2.0: the new constitution  625 a specific legal formation regardless of the (il)legality of the incriminated action of the EU. Besides, the acknowledgment in ESMA of a lawmaking capacity of EU agencies is in fact of limited reach. As it stands, it seems reduced to the type of acts generated under Article 28 of the short-selling regulation (Reg. 236/2012), that is, decisions without specific addressees.23 Perhaps most importantly, agency powers remain to be clearly distinguished from the adoption of non-legislative acts and implementation by the Commission under Article 290 and 291 TFEU. 4.2.2  European Parliament as organizational co-legislator with the Council A second constitutional building-block set out by the ESMA judgment is the empowerment of the European Parliament as organizational co-legislator with the Council, the EU organ comprised of Member State governments. Historically, there have been two competence paths to establish EU agencies. The first was the general residual competence (today’s Art. 352 TFEU), a competence norm that requires a unanimous vote in the Council and the consent of the European Parliament. In an enlarged EU, the effective right of veto granted to 28 Member State governments under a unanimity regime makes the application of Article 352 TFEU almost impossible. Political positions of the Parliament are easily turned down. Second, and increasingly, the EU legislature has created agencies based on sectoral Treaty competences, e.g. on the basis of the EU competence for environmental legislation (Art. 192 TFEU) or on the EU competence for harmonization of the internal market in Article 114(1) TFEU. This latter provision reads, in pertinent part: The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

The reference to the ‘ordinary legislative procedure’ (Article 294 TFEU) implies majority voting in both European Parliament and Council, thus improving the chances of political positions of the European Parliament to become law. Against this backdrop the U.K. argued that the establishment of ESMA did not qualify as a ‘measure for approximation’ under Article 114 TFEU. Advocate General Jääskinnen concurred and pointed to Article 352 TFEU as the only adequate competence provision. Thus, the role of the European Parliament depends upon the narrowness or breadth of the interpretation of Article 114 TFEU. The ECJ rejected the view of the Advocate General. Rather, the Court emphasized the legislative discretion of European Parliament and Council: ‘. . . the EU legislature, in its choice of method of harmonisation and, taking account of the discretion it enjoys with regard to the measures provided for under Article 114 TFEU, may delegate to a Union body, office or agency powers for the implementation of the harmonisation sought.’24 Thus, the ESMA judgment brought a significant boost for the European Parliament as organizational co-legislator of the   See above, section 3.   ESMA, footnote 20, at 105.

23 24

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626  Comparative administrative law EU. With the strengthening of the European Parliament as the representative organ of EU citizens (Art. 10(2) TEU) the judgment helps to further democratize the EU legislative process.25 4.2.3  Perpetuation of the technocratic rationale From Jean Monnet’s invention of functional integration onwards, the progress of European integration has depended on its capacity to fulfill certain economic or technical goals with the greatest possible efficiency. Although EU agencies began to emerge only in the 1990s (that is, four decades after the ECSC Treaty was concluded in 1951), they seem to some extent as the most perfect embodiment of the paradigm of expert-driven, technocratically legitimized European governance (Majone 2002, 329–30; Hofmann et al. 2011, 285). If the Commission’s moratorium on new agencies in 2008 could be seen as an indicator of doubt, the establishment of the financial sector agencies during the financial crisis marks the return of the functional paradigm of agency legitimation. The global financial crisis forced the EU to go back to Monnet and his emphasis on functionalism and institution building. The ECJ reinforced the technocratic rationale for agency-building in the ESMA judgment in two regards: first, the court took ‘deployment of specific technical and professional expertise’26 and the interconnection of an epistemic network with national financial regulation agencies27 as arguments to distinguish the conferral of powers to ESMA from delegation and conferral to the Commission under Articles 290 and 291 TFEU. Second, the Court cited the specific technocratic character of ESMA to justify the legislative discretion granted to the EP and the Council as the EU’s organ­ izational legislator when it comes to legislating on the basis of the competence norm of Article 114 TFEU.28 From a holistic perspective, the reinforced technocratic rationale raises questions. In particular, the relevance for agency-building beyond the internal market needs to be addressed. This is important for pressing policy questions such as entrusting the European Environmental Agency (EEA) with competences for on-ground inspections as an answer to the implementation deficit in EU environmental law (Saurer 2016, 79) and the empowerment of the European border security agency FRONTEX29 and the European Asylum Support Office (EASO) with operational tasks in the EU migration administration.30

25   AG Jääskinnen, Opinion of 12 September 2013, ECLI:EU:C:2013:562, United Kingdom v. European Parliament and Council (ESMA), at 58 offers a contrasting view on the democratic implications: Compared to the majority-voting procedure of Art. 114 TFEU, Art. 352 TFEU would constitute the more democratic procedure (‘an important channel for enhanced democratic input’) because of the ‘depth of the consensus’ of the unanimity of 28 EU Member States and the involvement of national parliaments according to Art. 352(2) TFEU. 26   ESMA, footnote 20, at 82. 27   Ibid., at 85. 28   Ibid., at 102–105. 29   Proposal for a Regulation of the European Parliament and of the Council on the European Border and Coast Guard and repealing Regulation (EC) No 2007/2004, Regulation (EC) No 863/2007 and Council Decision 2005/267/EC, COM(2015) 671 final. 30   European Commission, Press release, IP/16/1620, 4 May 2016, Towards a sustainable and fair Common European Asylum System.

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EU Agencies 2.0: the new constitution  627 Whether the functional legitimacy discourse stabilizing the EU ­financial sector agencies could be extended to those areas will need to be explored in the future. 4.2.4  Degrees of discretion The limitation of the agency to a certain degree of discretion is central to the ECJ’s evaluation of ESMA’s competence profile. The ECJ goes a relatively long way to explain why ESMA’s authority to regulate short-selling does not imply a ‘very large measure of discretion’ and is thus constitutional.31 First of all, the ECJ points to the textual delineation for exercising the authority for short-selling regulation. The court focuses particularly on the fact that ‘ESMA must examine a significant number of factors set out in Article 28(2) and (3) of Regulation No 236/2012 and the conditions imposed are cumulative.’32 In addition, the procedural requirement to consult the ERSB before ESMA’s decision,33 the ‘temporary nature of the measures authorized’ and the availability of judicial review add to the all-in-all sufficient limits of discretion.34 The reasoning behind this argumentative effort is genealogical. The ‘no very large measure of discretion’-rule vis-à-vis EU agency powers stems from the Meroni judgment of the 1950s.35 Thus, the intense analysis of discretion signals that today’s constitution of EU agency administration still rests on the early judicial foundations and that Meroni – at least to some extent – is still good law. The delineation of discretion marks the perhaps last terminological connector between today’s doctrine of EU agency competences and its ultimate foundations in Meroni. However, the ‘no very large measure of discretion’-rule is doctrinally unconvincing. Both terminologically and in practice it may prove difficult to mark the line between an admissible ‘simple measure of discretion’ and an inadmissible ‘very large measure of ­discretion.’ Moreover, the ESMA approach to agency discretion collides with another line of jurisprudence. In particular, the EU Court of First Instance ruling with regard to the Community Plant Variety Office (CPVO) – one of the more powerful agencies founded in the 1990s – may be pertinent. The Court of First Instance, glossing its understanding of ECJ case law, found that ‘where a Community authority is called upon, in the performance of its duties, to make complex assessments, it enjoys a wide measure of ­discretion’ – and in so holding expressed not the slightest doubt that this leeway was perfectly legitimate.36 The ECJ upheld this approach by confirming that the CPVO actually has a ‘wide d ­ iscretion’ concerning annulment of a plant variety right under certain ­conditions.37 With the juxtaposition of a ‘very large margin of discretion’ and a ‘wide discretion’ the EU judiciary has set out alternative control standards that are almost indistinguishable. Thus, it may be time to rethink the traditional, discretion-centered control standard. Comparative research suggests that a control standard focusing on the statutory     33   34   35   36   37   31 32

ESMA, footnote 20, at 54. Ibid., at 48. See Art. 28(4) and (5) of Reg. 236/2012/EU. ESMA, footnote 20, at 50. See above 1., esp. at footnotes 3–4. CFI, Case T-187/06, ECLI:EU:T:2013:522, Schräder v. CPVO, at 59. ECJ, Case C-546/12, ECLI:EU:C:2015:332, Schräder v. CPVO, at 56.

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628  Comparative administrative law conditions for executive lawmaking would be preferable. First, German constitutional law, notably Article 80(1), defines the conditions for executive empowerment to make subordinate legislation, requiring that the enabling legislation from Parliament defines the ‘content, purpose and scope of the authority conferred’ (Saurer 2005, 192–239; 268–97). In addition, the constitutionality of statutory empowerments for individual administrative acts is measured by the ‘doctrine of essential matters’ (Wesentlichkeitstheorie), which requires that the essential conditions for any adverse impacts on individual rights also must be defined in the authorizing statute. Second, U.S. administrative law – despite being overall certainly more procedural than its German counterpart – also establishes conditional requirements. The traditional ‘nondelegation doctrine’ of the U.S. Supreme Court goes back to the New Deal era38 but was renewed in the early 2000s.39 It asks whether the relevant Congressional delegation contains an ‘intelligible principle’ that gives sufficient substantial guidance to the rulemaking agency (Schulz Bressmann 2002). More recently, the Court reemphasized the importance of the constituent elements of the statutory groundwork through the ‘major political question doctrine’ that originally emerged from the famous Chevron case.40 Recently, in Supreme Court cases concerning climate change regulation through the Environmental Protection Agency41 and the roll-out of the Affordable Care Act through the U.S. federal government,42 the doctrine became central to the Court’s reasoning in addressing major political projects of the Obama administration (Gluck 2015). The Chevron doctrine was understood to reserve aspects of vast ‘economic and political significance’ for Congress.43 Third, EU primary law also focuses explicitly on the conditions of delegation when it comes to delegated rulemaking by the EU Commission. Article 290(1) TFEU, the central norm governing the delegation of non-legislative acts to the Commission, explicitly demands that ‘essential elements of an area shall be reserved for the legislative act and accordingly shall not be the subject of a delegation of power.’ Although this standard is explicitly reserved for delegations to the EU Commission and does neither directly nor by analogy apply to EU agencies, Article 290 TFEU still shows that the EU treaties value a minimum level of statutory conditions as a possible safeguard vis-à-vis delegated legislation.44 To conclude, the brief comparison of Germany, the U.S. and the EU suggests that the discretion-focused standard of the ECJ’s ESMA judgment should be replaced by a standard requiring the delegating EU legislator to prescribe EU agencies’ decision-making through statutory norms upon the ‘essential’ aspects.

38   See U.S. Supreme Court, Panama Refining Co. v. Ryan, 293 U.S. 388 (1935); U.S. Supreme Court, A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). 39   U.S. Supreme Court, Whitman v. American Trucking Associations, Inc., 531 U.S. 457 (2001). 40   U.S. Supreme Court, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). 41   U.S. Supreme Court, Utility Air Regulatory Group v. EPA, 573 U.S. _(2014). 42   U.S. Supreme Court, King v. Burwell, 576 U.S. _ (2015). 43   U.S. Supreme Court, footnote 41 (Justice Scalia delivering the Opinion of the Court, p. 19); U.S. Supreme Court, footnote 42 (Chief Justice Roberts delivering the Opinion of the Court, p. 8). 44   Similarly, but with a different reasoning Chamon 2014, 380, 387.

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EU Agencies 2.0: the new constitution  629 4.2.5  Procedural safeguards Procedural safeguards are the fifth important element of the new constitutional order. This element is a conceptual complement to the new substantial leeway analyzed above. The Court seems to compensate for the increased substantive leeway of ESMA with particular emphasis on procedural requirements. Thus, the Court looks closely into the statutory design of the procedure leading to an ESMA intervention that includes specific duties of consultation (i.e. the ESRB) and notification (of competent author­ ities ­concerned), but also into the requirements of publication and reason-giving that structure the ex post communication of ESMA and the wider public.45 In addition, the ECJ evaluates the review- and sunset-clause that applies to ESMA interventions.46 Last but not least, the Court stresses how judicial review of agency interventions has been significantly clarified with Article 263 TFEU and Article 277 TFEU.47 As a result, the ECJ acknowledges the actual procedural design of ESMA regulatory action as constitutional. Additional procedural safeguards are currently subject to discussion in EU administrative law scholarship. To improve accountability and procedural justice of agency administration, suggestions include increased duties of reason-giving for agencification (Scholten and van Rijsbergen 2014, 1253–4), an extension of impact assessments for EU non-legislative rulemaking (Alemanno and Meuwese 2013) and an increased role for the European Parliament. In the latter regard one might consider granting the European Parliament seats in agency boards (Curtin 2009, 151–2) or the empowerment of the European Parliament into a veto-player over agency decisions (Chamon 2014, 398). This later constellation has parallels to the legislative veto power of the U.S. Congress vis-à-vis executive rules rejected by the U.S. Supreme Court (Rose-Ackerman et al. 2015, 47–8)48 or to veto rights of the German federal parliament over executive rulemaking in the en­vironmental sector (Schmidt-Aßmann and Möllers 2006, 276–7). Moreover, procedural safeguards are also the point where Article 298(2) TFEU may become relevant. This competence norm enables the EU organizational legislator to enact an EU administrative procedure statute. The European Parliament has recently renewed its long-standing support49 for the idea of such a codification (Craig 2013; Harlow 1996), officially requesting the Commission to submit a proposal for a regulation on a ‘European Law of Administrative Procedure’ on the basis of Article 298 TFEU.50 The codification goal of the European Parliament dovetails nicely a widely discussed transnational academic initiative that presented a draft for an EU Administrative Procedure Act only recently (Hofmann et al. 2015; see also Hofmann and Schneider in this volume).

  ESMA, footnote 20, at 50.   Art. 28(10) Reg. 236/2012 reads: ‘ESMA shall review the measures referred to in paragraph 1 at appropriate intervals and at least every three months. If the measure is not renewed by the end of such a three-month period it shall automatically expire. Paragraphs 2 to 9 shall apply to a renewal of measures.’ 47   See above at 4.1. and 4.2. 48   U.S. Supreme Court, I.N.S. v. Chada, 462 U.S. 919 (1983). 49   Resolution of the European Parliament of September 6, 2001 on the European Ombudsman’s Special Report to the European Parliament, O. J. 2002, C 72 E/331. 50   Resolution of the European Parliament with recommendations to the Commission on a Law of Administrative Procedure of the European Union (2012/2024(INI)). 45 46

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630  Comparative administrative law

5.  CONCLUSION AND OUTLOOK The global financial crisis of 2008 prompted the establishment of three particularly power­ ful EU agencies to promote re-regulation and enhanced oversight of financial markets. ESMA, EIOPA and EBA joined the phalanx of more than 30 EU agencies that had come into existence over the course of the 1990s and early 2000s. With the new agencies in the financial sector, it became almost impossible to address the constitutionality through the prism of the traditional principles originating in the Meroni and Romano judgments of the ECJ. Thus, the founding of the financial sector agencies accelerated a transform­ation process that was already visible in the Treaty of Lisbon. Through the agency-related treaty amendments of Lisbon and subsequent constitution building through the judiciary a new constitutional regime of agency administration has begun to emerge. The central contribution of the ECJ is the ESMA judgment of January 22, 2014, rejecting the action of annulment of the U.K. The main elements of the new constitutional regime include the acknowledgment of EU agencies as (potential) regulators with the force of law, the exposition of the European Parliament as organizational co-legislator with the Council and the importance of functional legitimacy of agency administration. Moreover, EU agencies could be granted regulatory leeway as far as there are textual delineations in the enabling legislation for the exercise of power, accompanied by procedural safeguards. However, it deserves emphasis that the transformation to the new constitutional regime of the EU agency sector is still underway. To this point several key aspects remain underdeveloped. This holds true not only for the specifications and limits of the rulemaking capacity of EU agencies but also for the distinction between delegated rulemaking and implementation by the Commission under Article 290 and 291 TFEU. Another follow-up problem will be the extent to which the ECJ’s reasoning in ESMA can be extended to EU agencies with tasks beyond market regulation. With regard to the European Environmental Agency, the European Asylum Support Office or FRONTEX, the question is whether the functional legitimacy attributed to ESMA extends to their competence profiles as well. Finally, the ‘no large margin of discretion’-approach of the ECJ in ESMA and the competing judgments observed above deserve closer analysis. It may well be that this last terminological connector to the Meroni doctrine may not stand the test of time. This remains a topic for future research and debate.

REFERENCES Alemanno, Alberto and Anne Meuwese. 2013. ‘Impact Assessment of EU Non-Legislative Rulemaking: The Missing Link in “New Comitology”,’ European Law Journal, 19: 76–92. Cane, Peter. 2016. Controlling Administrative Power, Cambridge/United Kingdom: Cambridge University Press. Chamon, Merijn. 2011. ‘EU Agencies between Meroni and Romano or the Devil and the Deep Blue Sea,’ Common Market Law Review, 48: 1055–75. Chamon, Merijn. 2014. ‘The Empowerment of Agencies under the Meroni Doctrine and Article 114 TFEU: Comment on United Kingdom v Parliament and Council (Short-selling) and the Proposed Single Resolution Mechanism,’ European Law Review, 39: 380–403. Chiti, Edoardo. 2009. ‘An Important Part of the EU’s Institutional Machinery: Features, Problems and Perspectives of European Agencies,’ Common Market Law Review, 46: 1395–442. Craig, Paul. 2012 EU Administrative Law, 2. ed., Oxford: Oxford University Press.

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EU Agencies 2.0: the new constitution  631 Craig, Paul. 2013. ‘A General Law on Administrative Procedure, Legislative Competence and Judicial Competence,’ European Public Law 19: 503–24. Craig, Paul and Gráinne De Búrca. 2011, EU Law, 5. ed., Oxford: Oxford University Press. Curtin, Deirdre. 2009. Executive Power of the European Union, Oxford: Oxford University Press. Curtin, Deirdre, Herwig Hofmann and Joana Mendes. 2013. ‘Constitutionalising EU Executive Rule-Making Procedures: A Research Agenda,’ European Law Journal, 19: 1–21. De Larosière, Jacques et al., The High-Level Group on Financial Supervision in the EU – Report of 25 February 2009, available at http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf (March 29, 2016). Di Noia, Carmine and Matteo Gargantini. 2014. ‘Unleashing the European Securities and Markets Authority: Governance and Accountability After the ECJ Decision on the Short Selling Regulation (Case C-270/12),’ European Business Organization Law Review 15: 1–57. Everson, Michelle. 2012. A Technology of Expertise: EU Financial Service Agencies, LSE Europe in Question Discussion Paper Series (LEQS), LEQS Paper 49. Geradin, Damien. 2005. ‘The Development of European Regulatory Agencies: Lessons from the American Experience,’ in: Regulation through Agencies in the EU, Damien Geradin, Rodolphe Munoz and Nicola Petit, eds, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, 215–45. Gluck, Abbe R. 2015. ‘Imperfect Statutes, Imperfect Courts: Understanding Congress’s Plan in the Era of Unorthodox Lawmaking,’ Harvard Law Review, 129: 62–111. Griller, Stefan and Andreas Orator. 2010. ‘Everything Under Control? The “Way Forward” for European Agencies in the Footsteps of the Meroni Doctrine,’ European Law Review, 35: 3–35. Harlow, Carol. 1996. ‘Codification of EC Administrative Procedures? Fitting the Foot to the Shoe or the Shoe to the Foot,’ European Law Journal, 2: 3–25. Harlow, Carol. 2011. ‘Three Phases in the Evolution of EU Administrative Law,’ in: The Evolution of EU Law, Paul Craig and Gráinne de Búrca, eds., 2. ed., Oxford: Oxford University Press: 439–64. Hofmann, Herwig C.H. and Jens-Peter Schneider and Jacques Ziller (eds), ReNEUAL Model Rules on EU Administrative Procedure, 2015, http://www.reneual.eu (accessed August 29, 2015). Hofmann, Herwig C.H. and Gerard C. Rowe and Alexander H. Türk. 2011. Administrative Law and Policy of the European Union, Oxford: Oxford University Press. Ludwigs, Markus. 2011. ‘Die Bundesnetzagentur auf dem Weg zur Independent Agency?: Europarechtliche Anstöße und verfassungsrechtliche Grenzen,’ Die Verwaltung, 44: 41–74. Majone, Giandomenico. 2002. ‘Delegation of Regulatory Powers in a Mixed Polity,’ European Law Journal, 8: 319–39. Morgan, Glenn. 2012. ‘Supporting the City: Economic Patriotism in Financial Markets,’ Journal of European Public Policy, 19: 373–87. Rabin, Robert L. 1986. ‘Federal Regulation in Historical Perspective,’ Stanford Law Review, 38: 1189–326. Rose-Ackerman, Susan and Stefanie Egidy and James Fowkes. 2015. Due Process of Lawmaking, Cambridge: Cambridge University Press. Saurer, Johannes. 2005. Die Funktionen der Rechtsverordnung, Berlin: Duncker und Humblot. Saurer, Johannes. 2010. ‘Supranational Governance and Networked Accountability Structures: Member State Oversight of EU Agencies,’ in: Comparative Administrative Law, Susan Rose-Ackerman and Peter Lindseth eds, Cheltenham, UK and Northampton, MA, USA: Edward Elgar: 618–31. Saurer, Johannes. 2016. ‘Neue Entwicklungen bei der Vollzugskontrolle im europäischen Umweltrecht,’ Zeitschrift für Europäisches Umwelt- und Planungsrecht (EuRuP), 14: 78–90. Schmidt-Aßmann, Eberhard and Christoph Möllers. 2006. ‘The Scope and Accountablity of Executive Power in Germany,’ in: The Executive and Public Law, Paul Craig and Adam Tomkins eds, Oxford: Oxford University Press, 268–89. Scholten, Miroslava and Marloes van Rijsbergen. 2014. ‘The Limits of Agencification in the European Union,’ German Law Journal, 15: 1223–55. Schultz Bressman, Lisa. 2002. ‘Disciplining Delegation after Whitman v. American Trucking Ass’ns,’ Cornell Law Review 87: 452–85. Skowron, Magdalena. 2014. ‘Die Zukunft europäischer Agenturen auf dem Prüfstand,’ Europarecht (EuR): 250–61. Stein, Eric. 1981. ‘Lawyers, Judges, and the Making of a Transnational Constitution,’ American Journal of International Law, 75: 1–27. Weiler, J.H.H. 1991. ‘The Transformation of Europe,’ Yale Law Journal, 100: 2403–83.

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38.  Administrative discretion in the EU: comparative perspectives Joana Mendes*

The crisis-induced reforms of economic governance and financial market regulation in the European Union (EU) have reinforced the role of its executive. The stronger implementation competences of the European Commission in the area of economic governance, the role of the European Central Bank as lender of last resort and as supervisor of the European financial system, as well as the powers of the EU financial agencies have challenged the role of law in limiting and structuring the discretion of the EU executive. The debate on the role of law vis-à-vis the executive powers of the EU has largely focused on the ability of EU primary law to contain those powers and on its constitutional and democratic implications, following high-profile judgments of the Court of Justice.1 Against the background of the constitutional re-shaping of the EU legal and institutional structures arising from the financial and Eurozone crises, this chapter takes a different angle. It returns to a classic administrative law theme of the relationship between discretion and law. The focus is on how law (i.e., legal norms and legal principles that administrative action ought to concretize and respect) may constrain and structure the substantive, discretionary choices of the EU executive. A comparative overview of how national administrative law systems balance law and discretion will lay the basis for a normative conception that stresses both the autonomy of EU administrative actors in making policy choices – even where doctrines of delegation would seem to deny it – and the role of law in structuring those choices. Although in legal writings discretion has been predominantly addressed from the perspective of judicial control, this chapter argues that its relation to law is broader than implied by the judicial paradigm. The prospect that the EU may become more dominated by executive actors and, possibly, less driven and molded by judicial fiat emphasizes the importance of a broader perspective on discretion’s relationship to law that does not stop at the doorstep of courts (Dawson 2015). Part 1 argues that in important instances administrative discretion in EU law is anchored in a distinction between political choices and technical assessments. It explains the resilience of the Meroni dichotomy between ‘wide discretionary powers’ and ‘clearly defined executive powers’ in interpreting the authority of the EU agencies.2 It goes on to indicate how this conception has been influential in the post-2008 reforms, and it briefly *  I am grateful to Blake Emerson, Peter Lindseth, Thomas Perroud, Jens-Peter Schneider and Ulrich Stelkens for useful comments. This research is funded by the Netherlands Organisation for Scientific Research (NWO), under the VENI grant scheme. This chapter is a shorter version of an article published in the Modern Law Review. 1   Particularly, Case C-270/12 United Kingdom v. European Parliament and Council (ESMA) [2014] 2 CMLR 44; Case C-62/14 Gauweiler and Others v. Deutscher Bundestag [2016] 1 CMLR 1. 2   Case 9/56 Meroni [1957/1958] ECR 133. The Meroni judgment is generally understood as having defined the limits of delegation of powers to EU agencies.

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Administrative discretion in the EU  633 considers how that dichotomy may influence the role of courts in reviewing discretion in EU law. Part 2 succinctly revisits classic themes of law and discretion as developed in the legal orders of selected Member States. Probing into some of those approaches will both provide a better understanding of how administrative discretion is approached in EU law and highlight the limits of a classic perspective on discretion anchored in judicial review. Classic does not mean uncontested. Building on those who have contested the classic paradigm, Part 3 lays the foundations for a normative conception of law and discretion in the EU. It presents a unitary concept of discretion as a process of normative concretization in view of partially pre-determined ends. It relativizes the distinction between polit­ ical choices and technical assessments and between cognition and volition that seems to shape notions of discretion in EU law and in some national legal doctrines. It points out that administrative discretion, even where it is not subject to judicial review, is a space that is not free from legal-normative determinations and, specifically, from value judgments that underlie and are expressed in legal norms. Finally, it outlines the possible normative consequences of the proposed approach. Part 4 concludes and indicates why a segmented understanding of discretion should be avoided in EU law.

1. TECHNICAL vs POLITICAL: THE CONSTITUTIONAL SIGNIFICANCE OF A DICHOTOMY 1.1  Settling the Legality of a New Institutional Structure Discretion in EU law hinges in important respects on a distinction between political and technical assessments. This distinction still grounds the doctrine of delegation to administrative agencies in the EU, as revisited in the judgment of the European Court of Justice upholding the regulatory powers of the European Securities and Market Authority (ESMA), and it also pervades the way the EU Courts review discretionary acts of the EU institutions. The ESMA ruling, despite its idiosyncrasies, provides a powerful illustration of the institutional and legal complications of a fraught distinction. The ESMA case was part of a series of unparalleled judicial challenges to the constitutional foundations of the revamped EU financial and economic governance set up in the aftermath of the 2008 financial crisis (Moloney 2014, 1642). Arguably, the Court’s judgment was conditioned by the sensitive political context in which the contested regulation was adopted.3 Despite hinging on an apparently quite specific issue – the possibility to condition or ban short-selling – the powers of intervention challenged in this case were and remain an important feature of the EU financial governance structure created in 2010 to safeguard financial stability in the EU. The emphasis on ESMA’s technical expertise was an important anchor to the Court’s arguments in favor of the constitutional conformity of the agency’s powers. At stake was the power given to ESMA regarding the notification, prohibition or

3   ESMA, n 1 above at [44, 84–85]. See also Report of the High Level Group on Financial Supervision in the EU chaired by Jacques de Larosière, Brussels, 25 February 2009, para 162 (available at http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf).

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634  Comparative administrative law l­imitation of short-selling activities – a sensitive regulatory mandate because such decisions could override decisions of national authorities (either to act or not to act).4 The Court examined the nature of this power taking as a starting point the dichotomy between ‘discretionary powers’ and ‘clearly defined executive powers’, following Meroni. This landmark ruling adjudicated between the UK’s plea that ESMA had been given too much discretion and its contestation by the EU institutions.5 The UK argued that ESMA’s regulation of short selling required it to arbitrate between competing public interests and, thereby, breached Meroni. The EU legislative institutions denied that ESMA had been given ‘discretionary powers’ in the Meroni sense; by contrast, they argued that ESMA was dependent on specific professional and technical expertise. The Court dismissed the UK’s plea, concluding that ESMA’s powers were ‘clearly defined executive powers.’ Although the Court did not explicitly state that ESMA’s powers are not discretionary, by reiterating the Meroni dichotomy, it also appeared to accept the claim that these powers do not imply a ‘wide margin of discretion [that may] make possible the execution of actual economic policy.’6 In fact, the Court seemed to accepted the argument that ESMA’s decisions are determined not by ‘policy considerations but [by] complex professional considerations’ (the argument of the Parliament), that ‘ESMA does not have any margin of discretion . . . [it] is obliged to adopt such measures if certain circumstances arise’ (the argument of the Council), that ‘assessing the factual elements referred to in the relevant legislation. . . does not entail [ESMA] in making economic policy choices but simply in making a technical assessment in their field of expertise’ (the argument of the Commission).7 On the contrary, the Court’s reliance on the technical and expertisedependent characteristic of the ESMA’s mandate was instrumental to the judgment.8 Specifically regarding the limits of delegation, the Court stressed the amenability of the agencies’ decisions to judicial review, rather than the nature of its authority: as long as its decisions are liable to undergo judicial review, their legality is not affected.9 According to the Court, various legal conditions defined the authority of the agency in a precise way and, thereby, fulfilled that core requirement. Those conditions include the verification of whether there is ‘any threat of serious financial, monetary or budgetary instability’ ‘seriously’ endangering financial stability or ‘the orderly functioning and integrity of financial markets’, or ‘the possibility of a default by any Member State or supra-national issuer’.10 Although clearly ‘not wholly open ended,’ to use the terms of the Advocate General, these are hardly politically weightless issues.11 Under conditions of uncertainty typical of the emergency situations for which those powers were granted,  4   Article 28(1) and (2) of Regulation (EU) 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps, O.J. 2012, L 86/1. See ESMA, n 1 above, Opinion A.G. Jääskinen at [52].  5   ESMA, n 1 above [27–40], referring to Meroni, n 2 above.  6   Meroni, n 2 above, as invoked by the Court in ESMA, n 1 above at [41].  7   ESMA, n 1 above at [35, 37 and 40], respectively.  8   Ibid., at [82, 85 and 105].  9   Ibid., at [53]. 10   Art. 24(3)(b) of Commission Delegated Regulation (EU) 918/2012 of 5 July 2012 supplementing Regulation (EU) 236/2012, OJ 2012, L 274/1. 11   Opinion of AG Jääskinnen, n 4 above [41]. Also the Advocate General denied that ESMA had been empowered to take policy decisions [93–100].

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Administrative discretion in the EU  635 ESMA’s decisions may require value-laden choices that shape the way markets operate (albeit in exceptional circumstances).12 By rejecting the UK’s argument, the Court denied that this could be the case. Rather, it focused on the undeniable fact that the verification of those legal conditions requires complex technical assessments and the professional expert­ ise of the agency. Furthermore, should there ever be an instance in which ESMA would, in fact, take policy decisions implying wide discretion, judicial review would be available. Although the Meroni doctrine, as revisited in ESMA, is limited to the powers of EU agencies, the premise on which it is grounded – the ability to separate complex technical assessments from the appraisal of competing interests – has broader implications. The characterization of certain powers as dependent on technical expertise and as such not entailing policy choices means that a given allocation of authority is not constitutionally problematic, even where the dichotomy is itself problematic.13 The spectrum between policy choices/value judgments and the application of technical expertise not entailing discretion that enables policy choices is much broader and more diverse and complex than the EU institutions, including the Court and the Advocate General, could admit in order to preserve the legality of the ESMA’s mandate. Yet, in a period of constitutional transition, in which the EU institutional structures are adjusting to political and socioeconomic challenges unforeseen prior to 2008, the distinction between decisions entailing complex technical assessments, on the one hand, and those entailing policy choices and value judgments, on the other, has maintained the aura of legality that the re-allocation of authority within the EU has arguably compromised. That distinction is also implicit in Gauweiler, where the Court in its review of the proportionality of a policy of the European Central Bank permitting Outright Monetary Transactions (OMT) stressed that nothing more can be required of the ECB than a careful and accurate use of its economic expertise and of the ancillary technical means.14 It has also served to strengthen the position of the Commission in the new institutional structure of the EU’s economic governance (Lenaerts 2014, 764). 1.2  Judicial Review of Discretion ‘We still have the Court’, one could rightly counter-argue, to review the exercise of discretion by EU agencies and the institutions. The EU Courts have the legal and procedural means to ensure that their authority is deployed in a lawful and reasonable manner in view of the competing public and private interests at stake. That was, indeed, one of the main points of the Court’s revision of Meroni, as indicated above. Where would the Court draw the boundaries of judicial review of ESMA’s discretionary decisions, should it ever be confronted with a legality challenge? Although the question is, at present, hypothetical, the role of the Court in the emerging constitutional configur­ ation of the EU may have also been at stake in its ESMA ruling. If the Court had used the opportunity to discard Meroni and its distinction between wide d ­ iscretionary powers 12   See Moloney (2014, 1660) on the challenges that Meroni may pose to the powers of the Single Resolution Board. 13   Drawing this inference from ESMA, see Lenaerts (2014, 762). 14   Case C-62/14, Gauweiler et al. v. Deutscher Bundestag [2016] 1 CMLR 1 at [75]. For an analysis of this judgment, see Borger (2016).

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636  Comparative administrative law and executive powers and admitted that ESMA may, in fact, make policy decisions, the Court could have established a different starting point to review future judicial challenges. According to established case law, if the EU institutions have wide discretion, judicial review is limited to examining whether procedural rules were complied with and whether an act contains a ‘manifest error or constitutes a misuse of powers, or whether the authority did not clearly exceed the bounds of its discretion.’15 Although this formula has enabled significant variation in the stringency of judicial review, limited review of choices that accommodate competing interests is a long-standing trait of the EU Courts’ approach to discretion.16 By contrast, the EU Courts have shown that they are willing to go quite far when reviewing discretionary decisions grounded on technical complex assessments. Drawing on a seminal merger case (Tetra Laval), the Courts have held in various instances that judicial review of such assessments does not preclude an exhaustive review of the supporting factual information and of its suitability to justify the decisions adopted, and they have reviewed them accordingly.17 An intense scrutiny of complex technical assessments may lead to possibly confining the range of reasonable or plausible choices. Yet, the Tetra Laval type of review arguably perpetuates the pervasiveness of the political/technical divide. Tetra Laval enables the courts to scrutinize the choices that follow logically from factual assessments – as a matter of cognition – not the choices that stem from balancing the public interests that ought to be pursued against those that may be forfeited in the given circumstances – a matter of volition (Mendes 2016, 4327). Be that as it may, it took the Court at least a decade since the creation of the General Court and decades of review of competition cases, where the authority of the Commission is well established, to arrive at the Tetra Laval standard of review. The technical complexity of the assessments underlying not only ESMA’s powers but also those of the ECB and of the Commission in the framework of the EU economic governance, as well as their political sensitiveness, may be an obstacle to intense judicial review. It is possible that in the post-2008 EU’s constitutional configuration, important discretionary powers bestowed upon EU institutions or bodies, by virtue of their ability to make technically complex assessments, may be subject to relatively weak judicial control. It follows that the distinction between wide discretionary powers to make policy choices and discretion stemming from technical assessments has been one factor influencing the post-crisis re-allocation of authority in the EU. This distinction arguably solidifies the gap between the authority that the EU institutions and bodies effectively have and their formal competences, in a way that may twist the answers given to fundamental questions regarding the legitimacy that their authority would require and the design of accountability mechanisms (Chiti 2015, 327–31; Moloney 2014, 1160–61).

15   For an earlier instance, see, e.g., Case 55/75, Balkan-Import Export GmbH v. Hauptzollamt Berlin-Packhof, [1975] ECR 19 at [8]. 16   Craig (2012, 409–29); Hofmann, Rowe, and Türk (2011, 498–9). 17   Case C-12/03, Commission v. Tetra Laval [2003] ECR I-987 at [38, 39 and 43]. Further on this line of case law, see Mendes (2016, 428–9, n 26–31).

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Administrative discretion in the EU  637

2. DISCRETION AND LAW: PERSPECTIVES FROM THE LEGAL TRADITIONS OF THE MEMBER STATES In national legal orders the relationship between law and administrative discretion has been a core aspect of the construction and evolution of the État de droit and the Rechtsstaat and has helped define the relative position of courts and administrations. The constraints on discretion imposed by courts and the possibility of judicial review (salient in ESMA), limited judicial review in the face of wide discretion (that guides EU case law), the assumption (implicit in ESMA) that the verification of criteria of action does not entail discretion, and the distinction between technical assessments and policy choices have pervaded theories of discretion and its relation to law in national legal systems. Revisiting some of these conceptions can contribute to a better understanding of these traits of EU law and of the pervasiveness of a judicial understanding of discretion. Although many of the powers acquired by the EU executive would not fall under the label ‘administrative’ in national legal orders, scholarly work on administrative discretion provides a rich doctrinal and jurisprudential elaboration that is relevant for understanding the tensions between legal norms and discretion in EU law. This inquiry provides insights that can ground a reconstruction of this relationship. It situates administrative processes in an institutional context where courts may have a limited role, and it contests both the division between discretion and legality and a segmented conception of discretion. 2.1  Excès de Pouvoir and the Boundaries of Legality In the EU, as in many national legal systems, the relation of law to discretion has been largely shaped by judicial review (Craig 2012; Ritleng 1999). The realm of legality – understood in a broad sense as including general principles of law, constitutional norms, international agreements, regulations, in addition to parliamentary laws – and the realm of judicial control are often seen as overlapping. Courts control legality but, however far their control might lead them, legality should remain their limit. At the same time, courts, as arbiters of legality, define the scope of the discretionary power of the administration. French courts have mainly done so via the recours pour excès de pouvoir (Frier and Petit 2008, 469–70; Woehrling 1999, 75–6). This judicial approach presupposes a difficult distinction between legality and discretion. The discussion among French legal scholars on the scope of judicial review of administrative discretion is illustrative of the difficulties in accommodating the judicial control of discretion within the boundaries of legality, and of the limits of such a court-centric approach to discretion. In France, current judicial control is the result of an historical evolution that saw, initially, the Conseil d’État and, later, other administrative courts progressively diminish the scope of unreviewable discretion (Hauriou 1933, 404; Frier and Petit 2008, 470). The close ties (including organic links) between the Conseil d’État and the administration have mitigated objections to judicial review of discretion that focus on the incapacity of the judiciary to assess the substance of administrative decisions that rely on political, economic and social assessments, often escaping the logic of legality (Moderne 1999). The progressive extension of the scope of judicial control – that went along with the broadening of administrative intervention since the 1970s – challenged the premise that judicial control, as a matter of principle, does not go beyond legality.

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638  Comparative administrative law Early on Maurice Hauriou contested this premise. Tracing the historical origins of the recours pour excès de pouvoir, Hauriou (1933, 404–9) noted the mixed character of this legal action. At its roots, excess of power was different from legality and, in Hauriou’s view, in the inter-war period it played a distinct and more complex function. Beyond legality, he noted, there were rules of administrative conduct that can reach farther than the rules externally imposed on the administration in structuring discretion. Excès de pouvoir covered also the control of these rules and, therefore, included controls that would be typical of an administrator in a superior position. Unlike legality, excès de pouvoir origin­ ated as self-limitation of power: ‘discretionary power defines its own limits through an internal exercise of reason’ (Hauriou 1933, 438). Hauriou’s view on excès de pouvoir was vehemently opposed by Bonnard. Focusing, in particular, on the control of the causes (motifs) and of the purpose of the act, Bonnard pointed out that their control remained purely a control of legality and not a control of opportunité.18 A decision that lacks underlying reasons is irregular, because it defies a rational process of decision-making. It is illegal because it breaches the customary rule that an act needs to have a motive. Adopting a capacious meaning of legality, he argued that the causes of an act are always an element of legality and are as such subject to judicial control. There might be discretion in the assessment of the value of those underlying causes or reasons, but not in their existence. Similarly, the judicial control of the purpose of the act is also a control of legality because an act needs to be taken in view of a goal that is legally defined. Even if the goal is only defined in abstract terms, the purpose of an administrative act ought always to further service public (Bonnard 1923, 388–92). Several decades later, Devolvé (1988) attempted to overcome the assumption that intensive judicial review of administrative acts would breach the tenet that judges ought not rule on issues of opportunité. The question, as Devolvé noted, was politically salient because it delimited the boundaries of credible judicial intervention. By then, many of his contemporaries – among them a significant number of authoritative administrative law scholars – admitted that judicial control could go beyond legality.19 Although admitting that the Conseil d’État does not fully avoid issues of opportunité, Devolvé (1988, 277, 291, 293) argued that substantive issues such as the classification of monuments, the representative character of a trade union, or the urgency that justifies the expulsion of a foreigner are not matters of opportunité but rather pertain to the qualification facts, which, by law, must be assessed before an act is adopted. The emphasis placed on the rational elements of a decision-making process as an element of their legality (Bonnard 1923) and on the verification of the conditions that a norm attaches to the exercise of discretion (Devolvé 1988) enables the assumption that, no matter how far an administrative court decides to go in each instance, judicial review is, nevertheless, restricted to a matter of legality (Chapus 2001, 1057). In this conception, situations in which judicial review generates new rules and cases where the court examines issues whose legal nature is far from evident, do not alter that conclusion.20 Courts ought 18  Discretion and opportunité (advisability) overlap (see Hauriou 1933, 351; Chapus 2001, 1056). Opportunité is, however, a narrower term, as it generally refers to assessments that are external to legal determinations. 19   Denying it, while attempting to draw a difficult line, see Chapus (2001, 1057–8). 20   For an example, see Fatôme and Jégouzo (2015, 951).

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Administrative discretion in the EU  639 to control administrative choices to preserve the tenets of the État de droit, an approach that is arguably recognizable in the ESMA judgment, as in other seminal judgments of the Court of Justice.21 The same concern, albeit with a different focus (the subjective protection of rights, rather than the objective control of legality), underlines the conventional approach to administrative discretion in German law, to which I now turn. 2.2  Undetermined Legal Concepts One distinctive feature of the German legal system is the richness of analytical distinctions aimed at refining discretion and its relationship to law (Schmidt-Aßmann 2003, 220). This doctrinal elaboration took place against the backdrop of Article 19(4) of the Basic Law, a provision that, although focused on the judicial protection of any person’s rights, has resulted in intense judicial control of administrative action and in a c­ onsiderable ­reduction of the space of discretion (Schmidt-Aßmann 2003, 226–30). One distinction differentiates between undetermined legal concepts (unbestimmte Rechtsbegriffe) and discretion (Ermessen). It has been accompanied by a sharp partition of the legal norm into conditions under which a decision-maker may act (Tatbestand), on the one hand, and the possible legal consequences (Rechtsfolgenseite) where discretion may be attributed, on the other. Despite the discussion and contestation of this dogmatic approach to discretion, and the challenges it faces in particular in the area of markets regulation, it remains influential in German administrative law (Hoffmann-Riem 2012, 731–3; Maurer 2009, 146–8, 154–60; Schneider 2010, 1208–11; Franke 2016, 30–31). Here one may find an explanation of the argument – implicit in the ESMA judgment and arguably influential in legal thought beyond German scholarship – under which the verification of the conditions for administrative action defined in a legal norm does not entail discretion. Legal norms use undetermined legal concepts when defining the conditions of administrative action (Tatbestand), such as ‘public order,’ ‘harmful effect to the environment,’ ‘best available technique,’ ‘important reason.’ There are different causes of indeterminacy and different types of undetermined concepts. Their application may be subject to full judicial control unless, via interpretation, courts determine that the legislator intended to leave a margin of appreciation to the decision-maker (Beurteilungsspielraum). This is accorded only exceptionally (Maurer 2009, 148–51; Schmidt-Aßmann 2003, 233–4; Schneider 2010, 1208). The definition of the content of undetermined legal concepts seems to be predominantly understood as a matter of cognition and legal interpretation. Administrative discretion, by contrast, requires volition in defining the content of the act or in making a choice that is allowed by law. In a conventional understanding, administrative discretion emerges in the determination of legal effects, i.e., in the definition of the content of the act (Rechtsfolge). Prominent German legal scholars have contested this conventional view. SchmidtAßmann, for instance, endorses a broad notion of discretion encompassing choices that

21   Case C-269/90 Technische Universität München v. Hauptzollamt München-Mitte  [1994] 2 CMLR 187 Opinion of AG Jacobs, [10–16], regarding the possibility to review decisions of technical nature.

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640  Comparative administrative law would be qualified as Ermessen and Beurteilspielraum. He argues that they convey different techniques of normative formulation that, from a methodological perspective, should be treated in similar terms (Schmidt-Aßmann 2003, 220–21). Such an approach seems to be particularly suited to situations in which administrative action is geared to achieving relatively open-ended goals, for which legal norms define terms and criteria. In any event, how far judicial control may go in cases where the legislator intended to delegate discretionary power to the executive remains a point of contention (Hoffmann-Riem 2012, 732–3). The distinction between discretion and undetermined legal concepts has been influential in other legal systems in Europe (Clarich 2015, 115; García de Enterría and Fernández Rodriguez 2011, 481; Diniz de Ayala 1995, 128–9, 150–52; Vieira de Andrade 2011, 47–49). In EU law, this distinction is mostly defended in legal commentary (Bouveresse 2010, 44–66). It could explain and justify the ESMA ruling. In this view, the verification of whether there is a ‘threat of serious financial, monetary or budgetary instability’ would amount to filling in undetermined legal concepts via an essentially cognitive process. To the extent that they are determinable by resorting to specialized knowledge, verifiable despite the possibility of differing expert views, this legal condition would be one way to delimit ESMA’s authority in a sufficiently precise way. This view would be reinforced by the argument that that requirement delimits the conditions under which ESMA may lawfully prohibit or limit short-selling activities (Tatbestand). The proponents of this approach would argue that, as such, it does not amount to discretion. The arguments of the Parliament and the Council do not stray far from this view.22 2.3  Interest Appraisals and Technical Assessments A parallel distinction between discretion proper and technical discretion has pervaded Italian doctrine and jurisprudence, under the influence of the seminal work of Giannini (Mattarella 2006, 1996).23 In an influential 1939 monograph, Giannini identified discretion as the margin of choice stemming from the comparative assessment of public and private interests that conflict in a given situation. Discretion enables the search for the solution that best serves the public interest; its exercise is guided by the value that legal norms attribute to conflicting interests, as constructed by the administrative decisionmakers (Giannini 1939, 74–5, 78). Crucial is the assessment of the circumstances in which the decision was taken in view of the value judgments inherent in the applicable legal norms (Giannini 1939, 76–9; Mattarella 2003, 670 fn 156). Different from discretion proper are choices entailed by technical assessments. Although the former refers to value judgments stemming from the appraisal of competing public interests, the latter consist of the verification and qualification of facts by the application of technical or scientific concepts (Giannini 1939, 42–3; Clarich 2015, 125). Such assessments may be subject to different opinions and may be disputed, but the margin of choice that they entail ­(technical discretion) is considered distinct from the choices implied in the exercise of discretion. They do not require the act of volition that discretion presupposes.

22 23

  ESMA, n 1 above, at [35–38].   Yet, see Caranta (2008, 191).

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Administrative discretion in the EU  641 The way the distinction between discretion proper and technical discretion has been received in Italian doctrine resembles the German dichotomy between discretion proper and the choice stemming from undetermined legal concepts (Clarich 2015, 124). Yet, while Giannini’s work indeed made this distinction, he also emphasized the connection between elements of cognition and volition entailed in the exercise of discretion, an aspect that seems to have remained lost in the subsequent analyses of the nature of discretion (Giannini 1939, 79–81; Mattarella 2006, 1996).24 2.4  Situating the Comparative Law Argument These doctrinal constructions reflect the often complex and intricate case law in the jurisdictions where they have emerged and the historical and constitutional specifics of each legal system. Yet, at a certain level of abstraction they have traveled between legal systems. Advocates of their transposition into EU law argue advantages in terms of legal security, coherence and refinement of procedural and legal tools of review (Caranta 2008, 214; Barbier de la Serre and Sibony 2008, 941). From this viewpoint, a comparative analysis would reinforce the relevance of the political/technical divide in the characterization of discretionary powers. The normative advantages of the distinction between undetermined legal concepts, technical discretion, and discretion proper found in national legal orders would prima facie justify a similar approach to discretion in EU law. This is not the position defended here. One should guard against the formalism that distinctions between different types of discretion may engender (Queiró [1942] 1989, 103–4). They are above all indicative of a specific conception of how legal norms operate in delimiting discretionary powers, guided by one main rationale: the judicial review of discretion designed to tame an otherwise unbridled authority. Paradoxically, however, these distinctions may establish a formal view of the authority of administrative entities that does not reflect the complexity of discretion and the scope of autonomy that in reality they may have.25 A judicial paradigm conveys a specific meaning of discretion. Without paying justice to the richness of the varied doctrinal analyses, one may say that when considered primarily from the perspective of judicial review, discretion tends to be seen in negative terms. Even if most contemporary authors would acknowledge and stress the merits of a space of autonomy that is legally given to administrative decision-makers, the prevailing assumption still seems to be, implicitly or explicitly, that in an ideal state of realization of the rule of law (in the sense of État de droit, Rechtsstaat, or Stato di diritto), administrative powers should be bound by law in their entirety and, as such, subject to judicial review (Clarich 2015, 118–19). Discretion, at least the kernel of unreviewable discretion, then tends to be defined by the absence of legal norms or principles that, once interpreted, would be capable of indicating the solution that should apply in a specific case. It entails a choice that is not legally determined, in the sense that it is not given or discernable via interpretation. Discretion is ‘what is left outside of judicial control’

24   His analysis sets the ground for a broader view on discretion – see sub-sections 3.1 and 3.3. below. 25   Sub-section 3.3. below.

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642  Comparative administrative law (Caranta 2008, 185).26 Such a perspective avoids the difficult delimitation of the boundaries of legality, as evidenced by the discussion between French administrative lawyers on the distinction between legality (légalité) and advisability (opportunité). Bonnard’s argument that judicial control over the motives of an act is still a control of legality is particularly illustrative. It led him to transform a rational element of decision-making – every act needs to have a cause – into an aspect of the legality of the act, even if taken in a broad sense to include customary law.27 The prevailing negative view of discretion that the judicial paradigm still conveys arguably fails to capture the complexity of the interaction between legal norms, discretion, and judicial review. The assumption that the control of a discretionary decision may curtail or annihilate the space of discretion overlooks the fact that judicial control is better perceived as a second step in the process of shaping normative conduct, in which courts rather than weakening the position of the administration may collaborate (undisputedly in a different role) in the achievement of a solution for a complex socio-economic reality (Woehrling 1999, 96–7). Rather than removing a space for administrative choice between various possible alternatives, courts could structure the exercise of discretion in a way that contributes to better administrative decision-making.28 A different perspective on discretion, conditioned neither by the judicial paradigm nor by the distinctions that it favors, would acknowledge the merits of a constitutional interpretation that gives autonomy to administrative decision-makers without foregoing its relation to law. Where a discretionary choice remains the responsibility of the administration, by virtue of absent or limited review, such a choice ought to be guided by legal criteria. To put it differently, if one overcomes a perspective on discretion focused on control, and adopts instead the perspective of the administrative process, the relationship between law and discretion no longer turns on how far courts may reach when reviewing discretion, but how legal norms operate in the spaces of discretion available to decision-makers (Schmidt-Aßmann 2003, 220). For this purpose, one needs to overcome a segmented understanding of discretion.

3. DISCRETION AND LAW BEYOND THE JUDICIAL PARADIGM 3.1  Discretion as a Construct of Law Beyond an understanding of discretion anchored in categorical distinctions, discretion should be conceived as the authority attributed to decision-makers to choose between different alternatives when concretizing legal norms with a view to pursuing the ends that those norms define (Schmidt-Aßmann 2003, 220).29 Legal norms attribute and delimit discretion by referring to public interests, which they define at a high level of abstraction

    28   29   26 27

Critically, Woehrling (1999, 95). Section 2.1, above. Sub-section 3.3 below. Similarly, Franzius (2012, 192); Giannini (1939, 66).

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Administrative discretion in the EU  643 (e.g. the protection of public health, the international competitiveness of a given industry, financial stability, etc.).30 In doing so and by defining the conditions for the exercise of discretion, legal norms reflect a compromise between competing interests that reflect the specific social-economic, political or cultural contexts in which they are embedded. They define normative programs that reflect value judgments on which public interests should be protected, weighed, given preference or sacrificed by decision-makers when performing their administrative functions. Discretion is the ability to make a choice that best embodies the normative programs that political processes have converted into legal norms based on the founding values and legal principles that ground the state’s legal order. This conception does not remove discretion from administrative decision-makers. The value judgments that legal norms enshrine may be subject to different interpretations and justify different solutions depending on the factual circumstances. Both are determined via the intervention of decision-makers to whom discretion was attributed (Hauriou 1933, 356). However, this perspective on discretion stresses that, even in areas where legality is thinner (because of the indeterminate and open-ended character of legal norms, or because of decision-making that escapes formalized processes), as well as in areas where discretion is delimited by a series of legal conditions the verification of which requires technical expertise, the exercise of discretion includes the reference to value judgments that legal norms incorporate. Thus, the verification that, in a given instance, the Union institutions, acting in an administrative capacity, ‘reconcile divergent interests and thus select options within the context of the policy choices which are their own responsibility,’ or perform ‘complex assessments of an economic and social nature,’ delimits a space of decision-making that, in addition to non-legal considerations, should also be substantively influenced by legal norms.31 By the same token, when making choices of a technical nature, on the basis of complex assessments, the value judgments that the enabling legal norms incorporate ought not to be disregarded. 3.2  Critique of a Segmented Understanding of Discretion Legal norms typically indicate the purposes for which discretion is permitted and the conditions of its exercise that indicate the value judgments embedded in those norms.32 The substantive choices that fall within the scope of those norms is a matter of legal interpretation. Claims about what the legal norms allow are inseparable from the contexts in which they are applied and from other factors having an impact on the judgment. Top-level political directions, expert judgments, bureaucratic motivations, and the moral and ideological preferences of decision-makers all condition the interpretation of legal rules (Baldwin, 1995, 25). In a complex administrative setting, such as the EU, political directions may come from domestic governments, high-level EU bureaucrats, and heads of departments   On the implications, see Franzius (2012, 192); Mattarella (2003, 668).   E.g. Case C-180/00 Kingdom of the Netherlands v. Commission, [2005] ECR I-6603, at [55]; Case C-667/13 Estado português v. Banco Privado Português, not yet published at [67], emphasis added. 32   Similarly, Schmidt-Aßman (2003, 221). 30 31

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644  Comparative administrative law or units. They may be shaped by the pressure of interest groups outside formalized pro­ cedures, or from the self-understandings of decision-makers about their place in a political and bureaucratic system (Galligan, 1986, 132). Moral and ideological preferences may depend upon the domestic preferences of national bureaucrats, a common organizational culture or esprit de corps of the institutions, and departmental or professional preferences (Trondal 2010, 4–9). In such a complex context, an analytical distinction between norm interpretation, technical assessments and public interest appraisals or policy choices may force administrative decision-making into pre-established categories in a way that is potentially detrimental to a proper understanding of discretion as both a construct of law and a space of autonomy to make normative choices.33 Severing these different aspects, because judicial review is limited to a control of legality, may enhance the analytical rigor of doctrinal constructions but may be an illusionary means of delimiting the scope of discretion and of identifying the role of law within the spaces of discretion. Thus, the distinction between undetermined legal concepts and discretion may hide the reality that, even if the former may be subject to full judicial control, these concepts raise questions that must be answered by executive decision-makers in the first instance. In turn, the way they address these ­questions may influence the type of control that the courts may perform. A segmented understanding of discretion may also be normatively problematic, even assuming that where the courts would not enter, for lack of substantive or procedural grounds to do so, legal criteria or considerations do not apply or are not relevant. By severing the legal aspects subject to review from the others that should remain the responsibility of administrative decision-makers, such distinctions may ultimately endorse the view that discretion is a space free from legal-normative determinations. One loses sight of law as a constitutive element of discretion. 3.3  Bounded Discretion Viewing discretion as a space where administrative decision-makers engage in a creative process of norm concretization functional to the pursuance of public interests stresses both the autonomy of decision-makers and the bounded nature of that autonomy. It implies that the choice between alternative views on technical issues and the choice between the various value concepts may also be discretionary choices (Queiró [1942] 1989, 134–6; Schmidt-Aßmann 2003, 220–21). At the same time, the exercise of discretionary powers must not be dissociated from a duty of administrative decision-makers to choose a course of action that, according to their interpretation, is suitable to achieve the public interests they need to weigh and pursue (Soares 1955, 120, 188–9). The process of implementing public programs implies a dialectical relationship between the assessment of real-life situations and the weighing, mutual accommodation and ordering of competing public interests (Mendes 2016, 438–9). In this process, the legal solution is determined by whether the legal conditions for action are fulfilled – both value concepts and tools developed in specific scholarly fields (Queiró [1944] 1989, 236–9). The logical process that produces the application and concretization of the norm intertwines these 33

  Similarly Mendes 2016, 425.

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Administrative discretion in the EU  645 two aspects. Segmenting them is artificial. The interpretation of the conditions identified in the legal norm, including the undetermined legal concepts, and the verification of the factual conditions, may be predominantly a cognitive process. Yet, it may be deeply interconnected with the determination of the content of a legal act or action and with the aspects of volition that discretion entails (Queiró [1944] 1989, 236–9).34 The fact that the judge may perform full judicial review of the interpretation of the norm, of the concepts it uses, and of the verification of the factual elements that grounded the adoption of a legal act neither eliminates this interdependence nor the discretion that exists in the very verification of whether the conditions to act are fulfilled. Returning to the example of ESMA, the agency may only adopt measures that restrict short selling if there is ‘a threat to the orderly functioning and integrity of the financial markets or to the stability of the financial system of the Union.’35 The Commission specified that a threat shall mean, among other things, ‘any threat of serious financial, monetary or budgetary instability concerning a Member State. . .’ or/and ‘the possibility of default by any Member State or supra-national issuer.’36 It is undisputed that the meaning of these concepts will require complex economic analysis. Yet, arguably, the verification of these conditions may entail the weighing of competing public interests and condition the type of measures that the ESMA will decide to adopt (e.g. the very assertion of a threat may affect the efficiency of the markets). These will be measures with significant political implications regarding the allocation of authority between the ESMA and national regulatory authorities, and with legal consequences for the legal spheres of market operators and consumers. A unitary conception of discretion arguably provides a better understanding of the space of autonomy given to decision-makers than an approach that seeks to segment the legal norm and separate the cognitive from the volition elements of discretion. At the same time, by pointing out that those choices are made to concretize the normative programs defined in legal norms, it also indicates that the value judgments enshrined in legal norms are one of the elements that should structure the exercise of discretion, irrespective of the possibilities of judicial control. What consequences would follow from such a unitary conception of discretion for the way the EU executive exercises discretion and for the intensity of EU judicial review? The conception of discretion proposed here stresses that legal norms are not merely a vessel for non-legal technical expertise. Legal norms imply a public-interest-regarding exercise of discretion and a choice informed by a fair consideration of the competing legally protected interests at stake. This is less a matter of ensuring objectivity than one of making explicit the value choices that underlie the exercise of discretion and provide a justification in view of the public interest mandate reflected in the legal norms, albeit informed by sound technical assessments. The implications of this postulate are different depending upon whether the institution faced with a discretionary choice is an executive body or a reviewing court. Mechanisms should be built in the administrative process to ensure the incorporation of the public

  A similar view would stem from Giannini’s work.   Art. 28(2)(a) of Regulation (EU) 236/2012, n 4 above. 36   Art. 24(3) of Commission Delegated Regulation (EU) 918/2012, n 10 above. 34 35

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646  Comparative administrative law interest dimension of discretion in decision-making. Existing procedural rules and practices of careful examination and reason-giving, possibly improved by the critical eye of the European Ombudsman or by internal processes of administrative review, may serve as self-reflective tools that ensure that decision-makers have duly balanced all relevant public interests in a given situation (Mendes 2016, 444–9). Where judicial review of discretion is triggered, courts should operate in a dynamic relationship with decision-making bodies, as pointed out above.37 Courts have a crucial role in signaling the normative yardsticks for a correct exercise of discretion. In particular, they may prompt transformations in the administrative process in line with legal principles that ensure the rationality of public authority. They may thereby influence the administrative processes to quite varied degrees, as EU Courts have done via the principle of care and the duty to give reasons.38 Judicial review should act as a trigger to induce and improve the ways in which executive bodies ensure a public-interest regarding exercise of discretion (Scott and Sturm 2006, 570–75).

4.  BOUNDED DISCRETION IN EU LAW: A PROPOSAL The post-2008 reforms of economic and financial market regulation increased the breadth and political salience of EU executive powers. These reforms call for an approach to the role of law in structuring discretion that is not limited to a judicial paradigm and that could inform administrative processes, irrespective of judicial review. In national law trad­itions the relationship between law and discretion has engaged administrative lawyers since the early times of the État de Droit or Rechtsstaat. They provide both an ­explanation and a critical view of prevailing conceptions in EU law and lay the groundwork for a normative reconstruction that is arguably suitable to EU law. In national legal systems, classic distinctions between policy choices, complex technical assessments, and the interpretation of legal criteria of action have enabled administrative lawyers and judges to define the role of law and of courts in relation to discretion. Such distinctions have also influenced EU law. They re-surfaced in the post-2008 context, having influenced the allocation of authority to the EU financial agencies and the definition of their decision-making powers. In particular, the characterization of certain powers as essentially dependent on technical expertise has enabled the Court to endorse their legality. A similar reasoning is present in Gauweiler, albeit with a different salience. Given the significance of these two rulings in the post-2008 context, one may argue that the distinction between technical assessments and political choices has been part of the constitutional reconfiguration of the EU that may be bringing it back to the functionalism of the early days of EU integration (Ritleng 2016, 28–32; Vauchez 2014). Although revisiting such constructions may provide an explanation for the legal significance of those distinctions and their possible influence in EU law, it does not provide a normative argument for their transposition into EU law. They would entrench divisions that are unsuitable to the powers of the EU executive. They convey a formal view of the

37 38

  Section 3.4, above.   Critically on the duty of care, see Mendes (2016, 430–37).

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Administrative discretion in the EU  647 powers of executive and administrative bodies that does not reflect the complexity of discretion and the scope of autonomy that, in reality, those bodies have. The Court of Justice has chosen to stress that the authority of the EU financial agencies is essentially justified by technical expertise, and it made the suitability (and the legality) of their discretion chiefly hinge on the correct deployment of such expertise. A similar approach is discernible in Gauweiler, in relation to the ECB. As a consequence, the Court of Justice has endorsed the legality of the authority bestowed upon these entities in a way that conceals the dialectical relationship between technical assessments and policy choices. It chose to suppress the difficulties of such a dichotomy, presuming that the correct deployment of expertise would amount to confined discretion largely free of legal-normative choices. In ESMA, it also saw judicial review as the ultimate guarantee of legality when, in practice, most discretionary decisions will never reach the courts. The end result is normatively problematic. The distinctions mentioned sort out various types of administrative choices to identify those that should remain the responsibility of the administration with little or no interference from courts. These characterize a judicial paradigm of discretion. They tend to distinguish the legal, and hence reviewable, aspects of discretionary decisions, from those choices with which courts should not interfere or interfere only to verify their factual and legal correctness. The conclusion may be that, beyond that type of control, there is no relevant element of legality. Discretion then emerges as a space free from legal-normative determinations, in which the correctness of the technical analyses and the accurate use of expertise become the main criteria of legality. In this conception, law withers as a constitutive element of discretion, irrespective of possibilities of judicial review. By contrast, discretion should be seen as the authority to make a choice that best implements the normative programs and value judgments found in legal norms. Decisionmakers’ choices should be guided by the normative criteria that stem from those norms, in view of the circumstances that require regulation. Technical assessments allow decisionmakers to establish whether the legal conditions of action are fulfilled and to evaluate how different interests may be affected (cognition); they are entwined with the balancing of competing public interests (volition) in defining the content of an act and its normative consequences. An assessment of how public interests are weighed should be an important aspect of the lawful exercise of discretion, over and above the correctness of technical assessments. Discretion requires making value judgments that are permissible under legal norms. These are the reflection of political compromises that decision-makers must not ignore. Value judgments should be made explicit and justified by reference to those norms. In this way, law remains a constructive handmaiden of discretion irrespective of possibilities of judicial review.

REFERENCES Ayala, Diniz de (1995) O Défice de Controlo Judicial da Margem de Livre Decisão Administrativa, Lisboa: Lex. Baldwin, R. (1995) Rules and Government, Oxford: Clarendon. Barbier de la Serre, E. and A. Sibony (2008) ‘Expert Evidence before the EC Courts’ Common Market Law Review 45(4), 941–85.

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648  Comparative administrative law Bonnard, R. (1923) ‘Le pouvoir discrétionnaire des autorités administratives et le recours pour excès de pouvoir’ Revue du Droit Public et de la Science Politique 40, 363–92. Borger, V. (2016) ‘Outright Monetary Transactions and the Stability Mandate of the ECB: Gauweiler’ Common Market Law Review 53(1), 139–96. Bouveresse, A. (2010) Pouvoir discrétionnaire dans l’ordre juridique communautaire, Bruxelles: Bruylant. Caranta, R. (2008) ‘On Discretion’ in Sacha Prechal and Bert van Roermund (eds) The Coherence of EU Law: the Search for Unity in Divergent Concepts, Oxford: OUP, 185–215. Chapus, R. (2001) Droit Administratif Général, Vol 1, Paris: Montchrestien (15th ed.). Chiti, E. (2015) ‘In the Aftermath of the Crisis – The EU Administrative System Between Impediments and Momentum’ Cambridge Yearbook of European Legal Studies 17(1), 311–33. Clarich, M. (2015) Manuale di Diritto Amministrativo, Bologna: Il Mulino (2nd ed.). Craig, P. (2012) EU Administrative Law, Oxford: OUP (2nd ed.). Dawson, M. (2015) ‘Opening Pandora’s Box? The Crisis and the EU Institutions’ in Mark Dawson, Henrik Enderlein and Christian Joerges (eds), Beyond the Crisis: The Governance of Europe’s Economic, Political and Legal Transformation, Oxford: OUP, 86–93. Devolvé, P. (1988) ‘Exite-t-il un Contrôle de l’Opportunité?’ in Conseil Constitutionnel et Conseil d’État: colloque des 21 et 22 janvier 1988 au Sénat, Salle Médicis, Palais du Luxembourg, Paris: LGDJ-Montchrestien, 69–312. Fatôme, E. and Y. Jégouzo (2015), ‘Le juge, arbitre du bon goût en matière d’esthétique urbaine?’ Actualité Juridique. Droit Administratif 16, 947–51. Franke, P. (2016) ‘Rechtsschutzfragen der Regulierungsverwaltung’ Die Verwaltung 49(1), 25–54. Franzius, C. (2012), ‘Modalitäten und Wirkungsfaktoren der Steurung durch Recht’ in Wolfgang HoffmanRiem, Eberhard Schmidt-Aßmann, Andreas Vosskuhle (eds) Grundlagen Verwaltungsrechts Vol I, München: Beck, 179–257. Frier, P.L. and J. Petit (2008) Précis de Droit Administratif, Paris: Monchestrien (5th ed.). Galligan, D. (1986) Discretionary Powers: A Legal Study of Official Discretion, Oxford: Clarendon. García de Enterría, E. and T.R. Fernández Rodriguez (2011) Curso Derecho Administrativo I, Madrid: Civitas (15th ed.). Giannini, M.S. (1939) Il Potere Discrezionale della Pubblica Amministrazione, Concetto e Problemi, Milan: Giuffrè. Hauriou, M. (1933) Précis de Droit Administratif, Paris: Sirey. Hofmann, Herwig C.H., G.C. Rowe, and A.H. Türk (2011) Administrative Law and Policy of the European Union, Oxford: OUP. Hoffmann-Riem, W. (2012) ‘Eigenständigkeit der Verwaltung’ in Wolfgang Hoffman-Riem, Eberhard SchmidtAßmann, Andreas Vosskuhle (eds), Grundlagen Verwaltungsrechts Vol I, München: Beck, 677–776. Lenaerts, K. (2014) ‘EMU and the EU’s Constitutional Framework’, European Law Review 39, 753–69. Mattarella, B.G. (2006) ‘Discrezionalità amministrativa’ in Sabino Cassese et al. (eds), Dizionario di Diritto Pubblico: Vol. III, Milan: Giuffrè, 1993–2003. Mattarella, B.G. (2003) ‘L’Attività’ in Sabino Cassese (ed.) Trattato di Diritto Amministrativo, Milan: Giuffrè, 629–704. Maurer, H. (2009) Allgemeines Verwaltungsrecht, Munich: Beck (17th ed). Mendes, J. (2016) ‘Discretion, Care and Public Interests in the EU Administration: Probing the Limits of Law’ Common Market Law Review 53(2), 419–51. Moderne, F. (1999) ‘Origine et evolution de la jurisdiction administrative en France’ Revue Administrative 52(9) 15–22. Moloney, N. (2014) ‘European Banking Union: Assessing its Risks and Resilience’ Common Market Law Review 51(6), 1609–70. Queiró, A. (1942) Reflexões sobre a Teoria do Desvio de Poder em Direito Administrativo republished in Afonso Queiró (1989), Estudos de Direito Público Vol. I Dissertações, Coimbra: Universidade de Coimbra, 81–175. Queiró, A. (1944) O Poder Discricionário da Administracão, Estudos de Direito Público, republished in Afonso Queiró (1989), Estudos de Direito Público Vol. I Dissertações, Coimbra: Universidade de Coimbra, 235–45. Ritleng, D. (1999) ‘Le juge communautaire de la légalité et le pouvoir discrétionnaire des institutions communautaires’ L’Actualité Juridique – Droit Administratif, 55(9), 645–57. Ritleng, D. (2016) ‘Does the European Court of Justice take Democracy Seriously? Some thoughts about the Macro-Financial Assistance Case’ Common Market Law Review 53(1), 11–33. Schmidt-Aßmann, E. (2003) La Teoría General del Derecho Administrativo como Sistema, Madrid: Marcial Pons. Schneider, J.P. (2010) ‘Rechsschutz im Regulierungsverwaltungsrecht’ in Michael Fehling and Matthias Ruffert (eds), Regulierungsrecht, Tübingen: Mohr Siebeck, 1201–14. Scott J. and S. Sturm (2006) ‘Courts as Catalysts: Re-thinking the Judicial Role in New Governance’ Columbia Journal of European Law 13(3), 565–94.

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Administrative discretion in the EU  649 Soares, R. (1955) Interesse Público, Legalidade e Mérito, Coimbra: Atlântida. Trondal, J. (2010) An Emergent European Executive Order, Oxford: OUP. Vauchez, A. (2014) Démocratiser l’Europe, Paris: Seuil. Vieira de Andrade, José Carlos (2011) Licoes de Direito Administrativo, Coimbra: Imprensa da Universidade. Woehrling, J.M. (1999) ‘Le contrôle juridictionnel du pouvoir discrétionnaire en France’ Revue Administrative 52(7), 75–97.

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39.  Administrative law reform in the European Union: the ReNEUAL Project and its basis in comparative legal studies Herwig C.H. Hofmann and Jens-Peter Schneider

The Research Network on European Union Administrative (ReNEUAL) model rules on European Union (EU) administrative procedure law, first published in 2014, are the result of a real-life, large-scale undertaking in comparative administrative law. The model rules were developed on the basis of comparative administrative law. The basis of comparison was, on the one hand, administrative rules in various EU regulatory policy fields and, on the other hand, approaches to standard questions arising in administrative law contexts in European states. This chapter introduces the background and the outcome of the model rules on EU administrative procedure law.

1. THE STATUS QUO IN EU ADMINISTRATIVE LAW AND THE DRAFTING OF THE RENEUAL MODEL RULES The ReNEUAL project sought ways to better realize constitutional values in EU public law, especially its provisions on administrative procedure. This objective resulted in a multi-annual research collaboration with mostly, but not exclusively, European specialists in national and European administrative law and constitutional law with backgrounds in different legal systems and linguistic approaches. The first major ReNEUAL project was the ‘Model Rules on EU Administrative Procedure,’ first published online in September 2014. It presented in one document a set of innovative codifications of administrative procedures. Subsequent to a first on-line publication in English, the model rules have been translated and published (in chronologic order) in Spanish, Polish, German and Italian, with a French and a Romanian version ready for publication, and a Portuguese version in preparation. Given that the quality of a legal text might only reveal itself in the process of translation, many points of the model rules have been revisited and re-discussed during the process of translation. Arguably, the ensuing discussions of how to understand and describe certain concepts often required the network to further clarify concepts. We will point out some of these elements in discussing the model rules. In addition, the 2014 publication of the first version of the model rules received much thoughtful feedback. Much of it was collected during a series of conferences presenting and discussing the model rules in various jurisdictions between 2014 and 2016.1 At these conferences, where the model rules were studied from a national law

1   Conferences included specific events to discuss the translations of the model rules in Barcelona, Rome, Milan, Budapest, Leipzig, Cluj, Wroclaw, Paris and Lund.

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Administrative law reform in the European Union  651 perspective, they led to a fresh set of insights. Taking ideas and inspirations from these various translation processes and discussions an improved up-dated version of the model rules will be published in English version in 2017. 1.1  The Approach in Light of the Specific Challenges in Today’s EU Legal System The starting point of the project was an assessment undertaken by ReNEUAL working groups of the status quo in EU administrative law. This work analyzed EU rules on administrative procedures for the implementation of EU law, which were created in the context of generally fast-paced, dynamic legislative, regulatory processes and case law. EU administrative procedure law is, like much of EU law, often rather experimental in design. Examples for this include the emergence of the so-called ‘comitology’ system and the evolution of EU agencies and their relations with Member State bodies. Another example of this dynamic and experimental approach is the use of information networks in EU administration as a flexible model to ensure de-centralized implementation of EU law while creating common rules for a single market. Also the mix of hard-law and soft-law instruments used in regulatory areas governed by EU law pair dynamic developments with experimentalist approaches. The existing body of rules and principles of EU administrative law has emerged principally from legislation and regulatory practice developed for specific policy areas. There is very little legislation applicable across policy areas. The bulk of the overarching body of law governing administrative procedures in EU law is based on the case law of the Court of Justice of the European Union (CJEU) in Luxembourg that develops and applies general principles of EU law. The result of this approach is a significant fragmentation into sector-specific and issuespecific rules and procedures. Problems which are common throughout policy areas, and indeed Member States’ legal systems, have been solved in different ways in each policy area. Solutions to common issues are thus reinvented on an ad hoc basis, irrespective of whether a policy-specific solution is warranted or not. Examples of this trend include: rights of and procedures for participation and hearings; inclusion of external expertise in decision-making; forms and formalities of decision-making; withdrawal and revocation of decisions; consequences of amendments, times and deadlines as well as consequences of procedural errors, to name just a few. The ReNEUAL model rules, however, are not predicated on the assumption that pro­ cedural heterogeneity is always undesirable. Nor are they premised on the assumption that one type of procedure is necessarily suitable for all types of cases. Nonetheless, in EU law, the diversity of solutions established without regard for an overarching, transversal concept has become overbearing. This, in turn, often results in unwarranted complexity, increasingly pronounced by the fact that the administrative procedural rules that pertain in any particular area will be an admixture of sector-specific legislation, complex case law, and administrative practice. Even within this dense normative framework, many issues of practical importance for administrators and affected individuals will not be clearly regulated. The complexity arising from the diverse solutions does not protect against persisting regulatory gaps. These result from the fact that some procedural elements are addressed within policy-specific rules only partially, which means that often underspecified general principles of law must fill the void. Moreover, there is also a gap between, on the one hand,

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652  Comparative administrative law the proliferation of new forms of administrative action in the EU and, on the other hand, their integration into a coherent system of protection. Examples of this can be found in the expansion of so-called ‘composite’ administrative procedures in EU law, i.e. pro­ cedures in which actors from various jurisdictions, both national and European, contribute to one single administrative procedure. These composite administrative pro­cedures result in laws from multiple jurisdictions being applied in one single procedure that feed into one individual act adopted either by a Member State body or by an institution or agency of the EU. Composite procedures require joint gathering and use of information as the ‘raw material’ of de-centralized decision-making. In many policy areas, EU agencies facilitate cooperation by establishing shared databases for the collection and exchange of information. Composite procedures, often designed predominantly with a view towards achieving efficiency and optimal use of pre-existing administrative resources, can run the risk of diminishing protection of individual rights and limit access to judicial review that could hold the diverse actors involved in a procedure to account. The absence of a systematic transversal approach is thus not just a formal problem. It is one of the main reasons why lacunae in the protection of procedural rights continue to exist. The multi-jurisdictional nature of many, if not most, administrative procedures thus poses a particular challenge for EU administrative law. Despite ‘Europeanization’ of the policy areas, there is no fully fledged EU administration. Instead, implementation of EU law within the joint legal space is generally undertaken by national bodies that are in some cases supported by EU bodies. This distinguishes EU administrative law from many federal legal systems, which like Germany or the US follow a model of separating the implementing competences more clearly either according to levels (Germany) or according to policy competencies (US). In contrast, the EU has developed an integrated, multijurisdictional approach, which in the absence of general rules of procedure, reinforces fragmentation between sector-specific procedures. The lack of general rules of procedure for EU institutions, bodies, offices and agencies, therefore, has a negative impact on the coherence of procedures in Member States’ authorities. This creates barriers to administrative coordination within Member States, not just between them. EU administrative law however is also unique in that, on the EU’s ‘constitutional’ level, Article 41 of the Charter of Fundamental Rights of the EU (CFR) contains a limited enumeration of some principles of ‘good administration.’ These are formulated as individual rights obliging EU institutions and bodies to provide fair, timely and reasoned decisions, opportunities to be heard prior to adverse individual decisions, and access to one’s file as well as language rights. The core principles of good administration enumerated in Article 41 CFR are accompanied by rights of access to documents in Article 42 CFR and rights to an effective judicial remedy in Article 47 CFR. The latter has been interpreted by the case law of the CJEU to have repercussions for administrative procedures, for example, regarding the duty to give reasons and to grant a fair hearing prior to making decisions. Additionally, general principles of EU (administrative) law, as developed by the case law of the CJEU, have a broader scope than such binding and non-binding partial codifications, but are more abstract in nature. Using general principles of law, they fill voids in regulation within policy-specific rules. One example is the right to a fair hearing. According to the case law of the CJEU, an authority implementing EU law is bound by the EU general principle on the right to a fair hearing, even in cases where the legal basis which establishes the procedures to be fol-

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Administrative law reform in the European Union  653 lowed by that authority does not oblige it to organize a hearing.2 The general principles of EU administrative law as developed by the CJEU thus have a broader scope than specific legislation and can be applied to cover rights and obligations arising in the context of rulemaking, contracts, planning procedures, information exchange systems, and enforcement networks. Yet, reality shows that the development of general principles of EU administrative law through the gradually developing case law of the CJEU is, in part, hampered by the limited standing-rights of individuals. This is especially true when it comes to administrative rulemaking, contracts, and information management activities. The existence of soft-law guidance on proper administrative procedure provided by the European Ombudsman’s (EO) Code of Good Administrative Practice and by the EU institutions’ internal rules of procedure only partially mitigates this. The Ombudsman’s code is applied principally through review of administrative action by the Ombudsman itself. 1.2  The Model Rules on EU Administrative Procedure The ReNEUAL model rules set out proposed accessible, functional, and transparent rules which make visible the rights and duties of individuals and administrations alike. The target audience for the model rules are, first, legislatures on European and national levels. To this end, the model rules are explicitly formulated to allow their use in future legislative projects. They are formulated in language that can be applied directly to a legislative text. The second target group are courts looking for a compilation of good standards to aid their review of procedural developments. Finally, the model rules are also designed to spur further academic debates in the various European legal systems and linguistic groups towards ensuring high standards and to foster an understanding for the specific challenges which European integration brings to the field of administrative law. The ReNEUAL model rules comprise standard models for decision-making pro­ cedures, without limiting the possibility of modification for the needs of certain policy areas. The ReNEUAL model rules do not take aim at the dynamic, experimental nature of the EU’s legal and political system. Instead, they are designed to support the maturing of the European legal order by providing ‘building blocks’ for decision-making procedures. These do not limit the possibility of further experimental developments in certain policy areas. They, instead, contribute to consolidating the lessons learned from past experimentalism and comparative approaches in the field of administrative law. The model rules are designed to function as lex generalis provisions. They cover the general questions of protection of rights in the design of effective decision-making procedures. Policy specific adaptations to these general rules are possible by legislation relating to specific matters. The ReNEUAL model rules are organized in six parts referred to as ‘books,’ each specifying procedures leading to various outcomes of administrative procedures. They include the adoption and implementation of binding decisions with identified addressees (single-case decision), binding acts of general application (rulemaking), binding agreements (contracts) or the handling of the collection and use of information as input into decision-making. ReNEUAL’s model rules do not follow the same definition of the scope of applicability across the various books. Some specific considerations have to be taken   See e.g. CJEU case C-135/92 Fiskano AB v Commission [1994] ECR I-2885, para. 39.

2

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654  Comparative administrative law into account, which lead to differentiation between the general scope of the model rules as reflected in Book I and the more specific scope of some of the other Books. Generally speaking, Books II (on rulemaking), III (on individual decisions) and IV (on administrative contracts) are drafted for the EU institutions, bodies, offices and agencies, whereas Books V (mutual assistance) and VI (information management) have been drafted for Member States’ authorities as well as EU authorities. At this stage of development, the ReNEUAL model rules do not go further and actually articulate the nature of the consequences of non-compliance. The reasons are two-fold: first, while some national administrative procedure laws, indeed, include binding sanctions for non-compliance—such as annulment or damages—many others do not and are, nevertheless, enforced by courts in the way they deem most appropriate. Second, the EU courts have managed very well so far until now to impose appropriate sanctions for noncompliance with EU law. The choice that has been made in this version of the ReNEUAL model rules does not, however, mean that a codification of EU administrative procedure law should not in the future find an appropriate formulation of the sanctions to be applied in the event of non-compliance. The process of drafting the ReNEUAL model rules follows an approach of ­‘innovative codification.’ This involves bringing together in one document existing principles, which are scattered across different laws and regulations and in the case law of courts. The process is ‘innovative’ in that the model rules modify existing principles and rules and add new ones where they were felt to be warranted by the drafting teams. This process began with consideration of the procedural rules currently prevailing in particular EU policy areas, which led to identification of a preliminary version of possible procedural rules. The approach was to take a traditional ‘restatement’ approach and enlarge its ambit in view of the many areas which require innovative developments in the form of genuine ‘statements’ on how the law de lege ferrata should be (Bermann 2010).

2. COMPARATIVE STUDIES AS A CORE ELEMENT OF THE RENEUAL METHODOLOGY To the readers of a book like this, it hardly needs to be mentioned that comparative administrative law has a long tradition reaching back to the early nineteenth century, which waned with the emergence of more state-centered, positivist approaches in the late nineteenth century and first half of the twentieth century (Huber 2014, 6). In Europe at least, the rise of post-Second-World-War European integration clearly propelled comparative administrative law back onto the agenda of judicial and legislative legal landscape.3 In the traditions developed through this process, the work of the ReNEUAL working and drafting groups was informed by two main objectives of comparative law. One is the concept of comparative law as the only real-life laboratory of legal concepts and constructs. The comparative method applied across legal systems and across policy areas in

3   One example is the case law of the early Court of Justice being concerned very clearly with a comparative approach. See e.g. the case, discussed in greater detail below, Joined Cases 7/56 and 3–7/57 Algera and others v Common Assembly [1957] ECR 39.

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Administrative law reform in the European Union  655 this sense widens the pool of concepts and uses the reality in other countries as an arena for observation of workability and weaknesses of solutions (Schönberger 2011, 509). This was in part the approach used by the ReNEUAL drafters of the model rules. Another, possibly more theoretical approach treats comparative law as a tool of comprehension and as a key to understanding the rationality and the functioning of different legal systems. This understanding of comparative administrative law was brought into the process of comparative research by mixed groups of researchers representing different legal traditions and systems. The diversity of the ReNEUAL team sought to ensure that this comparative element was covered by background as well as ensuring that each legal researcher was aware of differing legal concepts and sensitivities. The ReNEUAL model rules try to make this process transparent in the explanations and commentary added to the model rules, which explain the reasoning for the choice of one solution over another. 2.1 The Comparative Method as Central Element to the Development of EU Law by the CJEU The ReNEUAL approach to drafting the model rules on the basis of comparative law is not alien to EU law methodology as applied by the CJEU in interpretation of the treaties and acts of EU institutions. This comparative method is central to the recognition and interpretation of unwritten general principles of law. The recognition of, and reliance on, these principles has provided many of the basic elements of European administrative law, and it has often been central to the recognition of both procedural and substantive rights of individuals within the EU legal system (Hofmann et al. 2011, 143; Tridimas 2006; Schwarze 2005, 193; Laenerts 2004; Bernitz and Nergelius 2000). A comparative approach is also a systemic reality within the CJEU, which is composed of members representing all the legal traditions and systems found within the Union. The use of the comparative method in the development of the case law of the CJEU law has two basic motivations. The first is using the comparative method as an approach to developing the EU ‘common law’ of administrative procedure, largely by elaborating on the general principles of law underlying the common constitutional traditions of the EU Member States. This approach was first developed in Algera and the subsequent case law of the CJEU regarding the European Coal and Steel Community (ECSC).4 These judgments laid down a number of the foundations of the administrative law system of the later EU. For example, in Algera, a case dealing with letters and communications by the Common Assembly, the Court ruled that these could constitute acts subject to judicial review as a consequence of their nature as ‘administrative measures,’ a translation from the French ‘acte administrative’ or the German ‘Verwaltungsakt,’ despite the different concepts behind the terminology in different legal systems.5 Later case law regarding the

4   See e.g. Case 4/54 ISA v High Authority [1954–56] ECR 91; Case 8/55 Fédération charbonnière de Belgique v ECSC High Authority [1954–56] ECR 245; Algera and others v Common Assembly, n 3 above; Case 9/56 Meroni v ECSC High Authority [1957–58] ECR 133; Case 10/56 Meroni v ECSC High Authority [1957–58] ECR 157; Joined Cases 43, 45, and 48/59 Von Lachmüller v Commission [1960] ECR 463; Case 105/75 Giuffrida v Council [1976] ECR 1395. 5   Algera and others v Common Assembly, n 3 above.

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656  Comparative administrative law protection of fundamental constitutional rights such as Stauder6 and Nold7 confirmed this approach. In Nold, the Court stated that it was ‘bound to draw inspiration from the constitutional traditions common to the Member States’ and that it could not ‘therefore uphold measures which are incompatible with fundamental rights recognized and protected by the Constitutions of those States.’8 In so holding, the CJEU underscored the ‘leitmotiv’ of the EU’s legal order as being embedded in the constitutional orders and traditions of the Member States giving expression to the notion of a common European constitutional space protecting its shared values through their expression in legal principles (Häberle 1991). The second motivation for the comparative method is to obtain guidance from the various solutions adopted for a common legal problem in different legal systems, the inspiration for a methodology best suited to the objective of the Union based on the rule of law (Lenaerts 2003, 879). The various legal traditions thus compared and contrasted not only constitute the legal and philosophical background of the EU legal system but also amount to a pool of legal concepts, methods, and experience useful in solving genuine and current problems in the concrete application of abstract legal principles. The approach of the CJEU to develop through the general principles of law a sort of ‘common law’ of EU administrative procedure is in some respects similar to that of US courts, where the federal courts have filled out the statutory requirements of the Administrative Procedure Act (APA) with an elaborate jurisprudence that implicates constitutional concerns (Metzger 2010). In that, one might even argue that the CJEU case law developing a common administrative law of the EU through general principles of law has embraced the conceptual idea of a common law approach more fully than that observed with regard to the US system (Donnelly 2007, 1105). The comparative approach used in the ReNEUAL, nonetheless, differs from the methodological approach of comparative law applied by the CJEU for the interpretation and further development of EU law in one important aspect: the CJEU generally focusses, as shown above, more on comparing Member States’ legal systems in search of solutions applicable to EU law, while at the same time only making very limited use of analogies and comparing solutions found in specific policies to the same problem. ReNEUAL, on the other hand, explicitly undertook a comparison between legal systems as well as a ­comparison between approaches developed within various policy areas subject to EU powers. 2.2 Comparative Law Influences from Cross-policy Sector Review and National Legislation as well as International Legal Provisions Comparison of EU Member States with national law and the EU member States and non-EU countries are highly relevant. Rules for EU administrative procedures do not exist in a vacuum. Legal systems around the world face similar difficulties when it comes to organizing the administrative implementation of law. Especially during the last century,

  Case 29/69 Stauder [1969] ECR 419.   Case 4/73 Nold v Commission [1974] ECR 491. 8   Ibid., para. 13. 6 7

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Administrative law reform in the European Union  657 in line with the development of the ‘administrative state,’ many legal systems have turned to codification of administrative procedures. It was and is clear to the drafters of the ReNEUAL model rules on administrative procedure that the challenges to the implementation of EU law and policy might in many cases be characterized by a greater complexity than the issues encountered within states when implementing their own national law, even in federally organized states. Nevertheless, although national codification experiences are not generally transferable one-to-one to the EU level, they do contain valuable case studies and inspiration to be taken into account when analyzing the possibilities of codifying EU administrative procedures. Therefore, the discussion within EU Member States on codifying administrative procedures—from first attempts to codification in Spain in 1889, to twentieth century codifications starting with the Austrian code of 1925, to the most recent example of the French code having entered into force on January 1, 2016— are relevant at EU level. In fact, many of the arguments used in the national jurisdictions pro and contra codification of administrative procedure codes are also repeated at EU level. Existing national codifications differ with regard to their applicability for different levels of government or to different aspects of administrative procedure, such as rulemaking or adjudication. Differences regarding the levels of government are evident from looking at legislative powers at the regional level of government in, for example, Austria, Belgium, Germany, Italy and Spain, as well as, for certain parts of their territory, Finland, Portugal and the United Kingdom. But not all levels are necessarily covered by codifications of administrative procedure. Germany’s federal code of administrative procedure is applicable to federal authorities. The laws of each Land are in turn applicable to the latter’s authorities. These different codes are similar, representing a common and coherent legal and administrative culture. In Spain and in Italy, a single basic general law is applicable to central as well as regional and local levels of administration. However, certain regions and autonomous communities have the power to adopt complementary legislation. Further, the depth of regulation also differs across the national systems. The administrative procedure law of Italy, for example, is to a large extent built on principles to be fleshed out in specific policy legislation. The latter approach of a more restricted Italian codification has been also the guiding principle of the ReNEUAL drafters with the objective of achieving a short and workable draft as well as to ensure that the lex generalis nature of the model rules would be visible from the outset. Further important differences between national codifications exist with regard to the administrative actions which are codified and the way they are defined. Many if not most administrative procedure acts in force within EU Member States apply only to unilateral administrative decisions (or adjudication). Some, such as the German law of 1976, also contain some rudimentary rules applicable to contracts. Others, like the French code, understand public contracts as a specific case of administrative acts. National approaches also differ as to whether rulemaking is covered. In some Member States, like France, ‘administrative acts’ include regulatory acts (decrees, ministerial regulations, etc.), whereas in others they are whole separate types of act. Therefore, in France, the codification of administrative procedure generally also applies to the latter, while in other codes, it does not. This confirms that, although inspiration can be drawn from many of the EU Member States’ laws on administrative procedure, no one single model is transferable as such. In some cases, such as with regard to rulemaking, non-EU legal systems like that

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658  Comparative administrative law of the US APA of 1946,9 have developed an extensive practice well worth taking into consideration. Examples for comparative inspiration from public international law-based i­ nstruments —often also referred to as ‘global administrative law’—include the 1977 Council of Europe resolution on the protection of individuals in relation to the acts of administrative authorities.10 Further, principles derived from the study of diverse regulatory regimes created under public international law show that general principles such as consultation and participation, access to information rights and reason-giving are increasingly seen as central to the legitimacy of administrative action beyond the state. This is of course not surprising given the role that public international law enjoys as a source of EU administrative law. It is also not surprising given that the realms of public international law and administrative law are increasingly converging, in that many international agreements and organizations are directly concerned with administrative activities and tasks and the prerequisites. The legality and legitimacy of their actions therefore become increasingly similar to those expressed in traditional administrative law. On the other hand, the administrative law regimes of states, including those of EU Member States and of the Union itself, are becoming more and more internationalized. International organizations and their acts increasingly influence domestic (European or national) administrative practice and decision-making. Although international administrative cooperation itself demands a regulatory or constitutive framework, and the provision of such a framework has become one of the tasks of international administrative law, this dimension is awaiting further research by the ReNEUAL working groups to assess whether model rules addressing these aspects might be helpful at this stage of the development of the law.

3. IMPACT OF COMPARATIVE STUDIES ON THE RENEUAL MODEL RULES According to the different forms of act addressed, each of the ReNEUAL model rules’ books takes into account a different set of comparative influences. Some areas draw more heavily on national experiences within EU Member States and non-EU Member States. Others draw more inspiration from a cross-policy-sector comparison. Again others are altogether more innovative given the architectural specificities of decision-making procedures. In the following we will try to highlight these different influences. 3.1  Book I (General Provisions) Book I of the ReNEUAL model rules is rather short and consists of: a preamble assembling the most important (constitutional) principles of EU administrative procedure; four articles providing rules on the scope of application; rules on the relation of the model   5 U.S.C. 553 (2012).   Council of Europe, Resolution 77 (31) On the Protection of the Individuals in Relation to the Acts of Administrative Authorities (adopted by the Committee of Ministers on 28 September 1977 at the 275th meeting of the Ministers’ Deputies). The resolution did not however use the term ‘good administration.’  9 10

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Administrative law reform in the European Union  659 rules to either specific procedural rules of the EU or to Member State law; and definitions relevant to more than one of the following books. Comparative studies influence the scope of application of the rules only indirectly because national codification processes very clearly demonstrate that questions of scope are very often highly controversial (Schneider 2014, 208). This knowledge as well as early discussions with various high-ranking national judges led ReNEUAL generally to limit the scope of application to EU authorities. National experiences with codifications of administrative procedure influenced also the lex specialis rule in Article I-2. Although such rules introduce the risk of de-codification, national examples show that such lex specialis rules are needed in order to provide flexibility to the administrative legal order (Schneider 2014, 213–14). The influence of comparative studies on the definitions in Article I-4 is very limited with the exception of the definition of the term ‘administrative action,’ a term which is used in Article I-1(1) in combination with definitions in other books to define the applic­ ability of the ReNEUAL model rules. The concept of administrative action as well as the substantive scope of application of the model rules is restricted to specific administrative activities. In this regard the model rules follow most national codifications within the EU11 as the legislators refrain from imposing advanced procedural requirements on a broad and unlimited set of activities (Schneider 2016a, 8). 3.2  Book II (Administrative Rulemaking) Book II of the model rules addresses rulemaking procedures by the EU authorities acting in an executive capacity, that is, those that remain outside the formal legislative procedures provided for in EU law. The scope of the proposed rules is not limited to rulemaking by the Commission. It also includes the making of other non-legislative acts of general application by other EU institutions, bodies, offices, and agencies. The objective of the proposed procedural rules is to ensure that the constitutional principles of participatory democracy and transparency as well as principles of EU administrative law, in particular, the ‘duty of care’ (full and impartial assessment of all relevant facts) are observed in rulemaking procedures (Curtin et al. 2013). In order to establish an innovative codification on administrative rulemaking the drafting team examined various sector-specific procedural regimes. According to this evaluation recent rulemaking frameworks like those for the European Aviation Safety Agency (EASA) or the European Securities and Markets Authority (ESMA)12 provide best-practice examples which inform for instance the rules of Book II on the initiation of rulemaking procedures, the preparation of draft rules, consultations, and the requirement of reasoned explanation. In contrast, national experiences from EU Member States could not be used by the drafting team, as provisions on rulemaking are not a standard component of national

11   §§ 56 ff. APA (Austria); Arts. L200-1 ff. APA/CRPA (France); § 9 APA (Germany); Arts. 2 ff. APA (Italy); Art. 1:3 APA/GALA (Netherlands); Arts. 104 ff. APA (Poland); Arts. 87 ff. APA (Spain); Ss 7 ff. APA (Sweden). 12   EASA-Regulation (EC) 216/2008; ESMA-Regulation (EU) 1095/2010.

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660  Comparative administrative law codifications in the EU. However, the ReNEUAL team did explore experiences in non-EU jurisdictions, including US rules on executive rulemaking. With regard to US rules on rulemaking, US law—not unlike the provisions in Article II-4—requires a ‘notice-andcomment’ procedure for draft rulemaking. After in-depth analysis of the US scholarship on this matter, the drafting group of Book II concluded that the phenomenon of ­‘ossification’—meaning agencies’ failure to update rules because of the intensive procedural and reason-giving requirements of the rulemaking procedure—was less due to rulemaking procedures per se but more to specific rules on standing in court. Given the considerable differences between the judicial procedural rules of the US and the EU, the drawbacks of establishing formal procedural rules for rulemaking appeared less relevant. Meanwhile, the benefits are considerable in terms of both the quality of rulemaking and compliance with constitutional provisions strengthened under the Treaty of Lisbon. Well-designed codification of rulemaking procedures can ensure improved rule-making procedures exist while protecting against an overly rigid approach which would lead to the blocking of rulemaking initiatives. 3.3  Book III (Single-case Decision-making) Book III is concerned with single-case decision-making, which is central to any regime of administrative procedure. Although only some national codifications of administrative procedure of EU Member States regulate administrative rulemaking, no codification of this kind neglects single-case decision-making. The general objective of Book III is to provide a clear set of rules applicable to all stages of an administrative procedure preparing and adopting a single-case decision, from its initiation (Chapter 2), through the gathering of the relevant information (Chapter 3), particularly through hearings and consultations (Chapter 4) to the making of the final decision (Chapter 5) as well as rules on its potential rectification and withdrawal (Chapter 6). A characteristic of Book III in comparison to national codifications is the integration of several rules concerning socalled composite procedures which are a special feature of the EU administrative space and defined in Article I-4(4) (Schneider 2016a, 13–14). The influence of different forms of comparative study varies among the chapters and provisions of Book III. As already mentioned with regard to Book I, the substantive scope of application is determined by a rather restrictive and formal definition of ‘decision’ as the relevant administrative action for Book III (Article III-2(1)). This concept reflects similar approaches in national codifications (see above 3.1). In contrast, the definition of ‘party’ in Article III-2(3) and the general principles of fair decision-making laid down in Article III-3(1), are more or less influenced by Article 41 of the CFR. But the more concrete rules in Article III-3(2)–(5) guaranteeing impartiality of decision-makers draw on examples from national codifications as well as from sector-specific EU law. An even broader mix of sources of inspiration has been used for Article III-4 on online information on existing procedures. In this case ReNEUAL has been inspired by the US APA and codifications of EU Member States as well as by EU secondary law or policy reports of EU officials. Comparative legal studies of the various dimensions have therefore been intensively used in drafting Book III. The footnotes in the explanations to Book III indicate this clearly even if it was not possible to display all the material which has been used

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Administrative law reform in the European Union  661 throughout the discussions. One can distinguish the following sources and areas of influence: The EU CFR informed the rules on impartial investigation, on access to the file and the right to be heard, and concerning the use of languages. Other relevant provisions of EU primary law are Article 296(2) TFEU concerning the duty to give reasons and Article 297(2) TFEU concerning form and notification of decisions. Secondary EU law has been a major source of inspiration with regard to the rules on investigation by request or by mandatory decision, the article establishing duties to cooperate of parties, the section on inspections, and the article concerning the consultation of the interested public. The jurisprudence of the CJEU has been relevant for the drafting of the rules codifying the duty of care, the privilege against self-incrimination and the legal professional privilege, the provision on access to the file and the right to be heard, and the chapter on rectification and withdrawal of decisions. National law of EU Member States has influenced the provisions concerning the responsible official, the principle of investigation as well as the articles concerning the consultation of the interested public, the duty to specify the decision, the duty to indicate available remedies, the use of electronic forms, the notification of a decision, the correction of obvious inaccuracies, and specific features with regard to the withdrawal of legal decisions that are beneficial. Additional sources of inspiration are the European Code of Good Administrative Behavior drafted by the European Ombudsman and Recommendations of the Council of Europe. 3.4  Book IV (Contracts) Book IV regulates administrative procedures leading to the conclusion of a public contract as well as procedures governing the execution or termination of such contracts. Book IV does not regulate the substantive law of obligation. Only contracts regarding administrative activities concluded by EU authorities fall within its scope. The drafting team of Book IV faced several challenges. First, the team had to screen an abundant amount of restatement material (including standard contracts and contract templates developed by the Commission), which is very ambiguous and fragmentary in nature. Second, there is no consensus among lawyers on how to understand this ma­terial. Thus, a very heterogeneous landscape already exists at European level. Third, this ­landscape becomes even more complex when the national level is taken into account. The national concepts of public contracts (and public contract law) differ considerably— regardless of whether these contracts are governed by national public or national private law, or by a mixture comprising public and private law elements. Like Book III, Book IV is influenced by a variety of sources. Sectoral EU law has been especially influential with regard to the section on the competitive award procedure (Art. IV-9–Art. IV-19). This important element of Book IV is inspired by the Commission Communication on contract awards13 as well as by Title V of the EU Financial Regulation 966/2012 and by Title V of the respective implementing Regulation 1268/2012. Several other rules either codify existing CJEU jurisprudence or propose

13   Commission Interpretative Communication on contract awards not subject to the provisions of the Public Procurement directives (2006/C 179/02).

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662  Comparative administrative law s­ olutions to problems arising from this case law. Particularly interesting is Book IV’s effort to distinguish the authority’s decision to enter a contract (first level legal act) from the contract itself (second level legal act), which is derived from the CJEU jurisprudence. This jurisprudence, for its part, follows the French public contract model (Rennert 2016, 22). Thus, national public contract law inspires the ReNEUAL model rules indirectly through the CJEU jurisprudence. Nevertheless, the ReNEUAL model rules do not follow the pure French model, but, rather, the model rules modify it with regard to the contractual consequences (i.e. on the second legal level) of legal defects of the decision on the first legal level. French public contract law empowers the courts to modify the contract, but the ReNEUAL model rules prefer an innovative approach of obligations for the contracting parties to renegotiate the contract (Rennert 2016, 24). Another source of inspiration, especially relevant for Chapter 4 of Book IV dealing with subcontracts, has been findings of the European Ombudsman, the so-called ‘ombudsprudence.’ Finally, in Book IV the drafting team used the wording of the Draft Common Frame of Reference (DCFR), an equivalent to the ReNEUAL project in the field of European private law for a limited number of rules.14 In other cases the ReNEUAL model rules differ explicitly from the DCFR. 3.5 Book V (Mutual Assistance) and Book VI (Administrative Information Management) Mutual assistance and administrative information management constitute important parts of European administrative law because EU law is implemented mostly by various Member State authorities. The persons and enterprises regulated by these authorities engage in cross-border activities using the fundamental freedoms within the Single Market as enshrined in the EU treaties. However, national authorities are, with very few exceptions, still bound by the principle of the territorial limits of public authority. Thus, supervision of cross-border movements of goods, services, workers or capital depends on cooperation between the respective national authorities. This horizontal cooperation is complemented by vertical cooperation if central EU agencies provide information or expertise to competent Member State authorities. Moreover, national authorities support the EU authorities that directly implement EU law if they need local knowledge or national enforcement powers. Today, no general legislation provides a clear procedure for cross-border or multilevel mutual assistance. Instead, EU and Member State Authorities rely either on divergent ­sector-specific rules or on conventions of the Council of Europe. Book V of the ReNEUAL model rules establishes mutual assistance between public authorities as a generally applicable default obligation. Its detailed rules about the duties of either the requesting authority or the authority whose cooperation is requested, the grounds for refusal of a request, the right of a person concerned to be informed, and the allocation of costs are directly applicable to all fields of EU law as long as no more advanced forms

14   Study Group on a European Civil Code and the Research Group on EC Private Law Principle Definitions and Model Rules of Administrative Law (2009), http://ec.europa.eu/justice/ policies/civil/docs/dcfr_outline_edition_en.pdf (accessed 18 September 2016).

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Administrative law reform in the European Union  663 of inter-administrative cooperation are applicable. Consequently, the rules of Book V provide a minimum standard for mutual assistance. Book V is inspired to a great extent by conventions of the Council of Europe, especially the European Convention No. 100 of 1978 on the obtaining abroad of information and evidence in administrative matters. One reason for this is that this convention today closes the existing gap in EU law as mentioned above. Thus, it reflects the state of play. In addition, Convention No. 100 is a general instrument while most other international conventions or relevant supranational instruments of EU law are of a more sector-specific nature like tax law, customs law, or internal market law. In contrast to Books III and IV, national codifications of administrative procedure are not a source of inspiration expli­ citly mentioned in the explanations to Book V. The reason is the rather divergent state of play in national legal orders. In many Member States no general provisions on mutual assistance seem to exist.15 A few Member States possess comprehensive general rules on mutual assistance, which are either integrated into their codifications of administrative procedure16 or outsourced to supplementary acts.17 A number of other states rely on very short provisions either within their procedural codifications18 or in their ­constitutions19 obliging authorities to provide mutual assistance without any further guidance. Book VI supplements Book V (and Book III) by regulating advanced forms of interadministrative information exchange which are central features of information networks within the composite European administration (Galetta et al. 2014, 65–70). Thus Book VI combines a general codification with pre-structured, but flexible rules in order to allow for adaptations to the specific needs of a sectorial information exchange. Book VI is probably the most innovative Book of the ReNEUAL model rules because the drafting team could not rely on national codifications as a model. Consequently, the drafters had to compare and analyze a wide range of sector-specific and often very recent material of EU law in order to develop the classification mentioned above and to identify best-practice solutions to the legal problems arising from advanced information exchange within horizontal and vertical administrative information networks in the EU (Schneider 2016b).

4. IMPACT OF THE RENEUAL MODEL RULES ON THE DEVELOPMENT OF ADMINISTRATIVE LAW IN THE EU AND AT NATIONAL LEVEL Two recent drafting processes of administrative procedure at EU as well as at national level have been particularly influenced by the ReNEUAL model rules. On the EU level the European Parliament has been most active in promoting an administrative procedure act in the form of EU legislation. A resolution of January 15, 2013 called for a codification of general principles of administrative procedural   Important examples in this regard are France, Italy and the UK.   See for example §§ 4–8 APA (Germany); Art. 4(5), 34–37 APA (Lithuania). 17   Estonian Administrative Cooperation Act. 18   See for example s. 6 APA (Sweden); s. 10 APA (Finland); see also Art. 4 APA (Spain; Act 30/1992) which will be replaced in 2016 by Arts. 140­142 of Act 40/2015. 19   See Art. 22 of the Austrian Constitution. 15 16

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664  Comparative administrative law law. The European Commission, which is in charge of initiating legislative procedures, adopted a rather cautious position and refrained from drafting a proposal for a European administrative law. However, the European Parliament provided for the first time in its history a draft regulation on its own. This draft was endorsed by the Parliament in June 2016.20 Several ReNEUAL members were invited by the European Parliament to provide expertise to the Parliament´s drafting team. In line with the ReNEUAL findings, the Parliament found that the existing fragmentation of administrative procedure law was due to an increase in sector-specific legislation and the subsequent differentiated jurisprudence of the CJEU. Nonetheless, in view of the near revolutionary act of the European Parliament to itself draft an act, much political compromise had to be made and the European Parliament chose to be very selective regarding the content. In view of this, the Parliament’s draft, although heavily influenced by the ReNEUAL model rules, applies a more restricted approach by concentrating on single-case decision-making and does not include model rules for composite procedures. It also differs from the ReNEUAL approach of a clearly defined scope of application concerning the administrative actions covered by its draft (Schneider 2016c, 134–5). On the Member State level, the most recent codification is that of France, the ‘Code des relations entre le public et l’administration’ which entered into force on January 1, 2016 (see Custos in this volume). The influence of the ReNEUAL project on the drafting of the new French code on administrative procedures may be assessed by reference to both the start of the drafting process and its result. The drafting of the Code clearly intended to draw inspiration from comparative and European law (Vialettes and Barrois de Sarigny 2014). This intention had a tangible impact on the composition of the group of experts nominated by the French government to advise on the drafting of the code. This ‘cercle d’experts’, composed of about 20 individuals with academic, judicial, or administrative backgrounds, included two prominent members of the ReNEUAL project among the only six academic members of the advisory committee. The resulting code shows some limited influence of the ReNEUAL model code. Limitations stem, on one hand, from the very different context of a multi-level integrated administrative structure in the EU by comparison to the situation within the unitary French state. Further, the new French code is not structured according to the various types of administrative activity (as is the case in the ReNEUAL model rules) but rather according to the various types of relations between the administration and the citizens. However, there are undeniable common elements in the approaches underlying the French code and the ReNEUAL model rules, as well as recognition of debates undertaken in the EU Members States. The process is a typical example of the ongoing export of concepts from the national to the European level and the subsequent re-importation of concepts as evolved by the European approach.

20   Resolution for an open, efficient and independent European Union administration (2016/2610(RSP)) B8-0685/2016.

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Administrative law reform in the European Union  665

5. CONCLUSIONS The ReNEUAL model rules are the outcome of a large-scale undertaking in comparative administrative law. The sources of inspiration consist of: primary (constitutional) and secondary (legislative) EU law; the case law of the CJEU, the practice of EU institutions, bodies, offices, and agencies; the comparative law of the EU Member States; and other rele­vant national and international experiences of full or partial codification of administrative procedure. Furthermore, some proposed rules are the result of studies of the so-called ‘ombudsprudence’ of the EO and especially the proposals frequently added to EO reports. The comparative law element was used both to identify problematic aspects of the law of the EU which have been solved by Member State legal systems and to isolate approaches already addressed in some policy areas of Union law but not others. For both, the comparative point of view is decisive. The use of comparative (administrative) law is not an alien element in EU law. In fact, the very origins of EU administrative law have consisted of finding principles of law applicable to the EU legal system by comparison between EU Member State legal systems and approaches. Further, the experimental nature of many policy developments in EU law imply that a great diversity of solutions exists. The comparative method allows for taking stock and analyzing what has worked better and whether and in what conditions a more generalizable application would be possible. The normative criteria in assessing various principles are drawn from the constitutional framework of the Union. In this context, the influence of different forms of comparative studies varies among the different books of the ReNEUAL model rules. These books concern general provisions especially with regard to the scope of application and the relation to sector-specific law (Book I), administrative rulemaking (Book II), single-case decision-making (Book III), contracts (Book IV), mutual assistance (Book V), and information management (Book VI). Some of these forms of administrative action are not covered by either national law or by certain sources of EU law. Accordingly, the drafting teams could not rely for all books on the same material. In addition, national law does not reflect the specifics of composite procedures which are a core element of EU law, while some provisions of sectorspecific EU law are not adequate for a general codification. However, choices between different legal solutions had to be made in some cases. ReNEUAL did not limit itself to one single comparative and evaluative method. Instead, the drafting teams composed of experts from various backgrounds have taken into account the constitutional principles relevant for administrative law enshrined in the EU treaties as well as the promotion of administrative efficiency and legal effectiveness. The balancing of these arguments has been influenced by the various discussion fora established within ReNEUAL as well as with stakeholders, other academics, and legal practitioners. Whether the EU legislature or the legislatures of the EU Member States endorse fully, partially or for some policy-specific legislation the ReNEUAL’s proposals is of course part of their legislative discretion. From this perspective it is promising that the European Parliament voted in June 2016 in favor of a resolution accompanied by a fully-fledged draft regulation for an open, efficient and independent European Union administration. The parliamentary draft does not integrate all books of the ReNEUAL model rules in order to concentrate on the most important problems of single-case decision-making by EU authorities. Such an initiative is a clear indication that the European Parliament is

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666  Comparative administrative law aware of the fact that the recently questioned legitimacy and democratic accountability of the European administration will be enhanced by a codification reflecting and highlighting constitutional principles of administrative procedure. It remains to be seen whether the other legislative bodies of the EU follow the European Parliament in this regard.

REFERENCES Bermann, G.A. (2010), ‘A Restatement of European Administrative Law: Problems and Prospects,’ in Susan Rose-Ackerman, Peter L. Lindseth (eds), Comparative Administrative Law, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, 595–605. Bernitz, Ulf and Nergelius, Joakim (eds) (2000), General Principles of European Community Law, The Hague: Kluwer. Curtin, Deirdre et al. (2013), ‘Constitutionalising EU Executive Rule-Making Procedures: A Research Agenda,’ 19 European Law Journal, 1–21. Donnelly, C.M. (2007), ‘Les rapports entre droit administratif fédéral et droits administratifs des états aux ÉtatsUnis: Comparaison avec l’Union Européenne,’ in Jean-Bernard Auby and Dutheil de la Rochère (eds), Droit Administratif Européen, Brussels: Bruylant, 1085–110. Galetta, Diana-Urania et al. (2014), ‘Information Exchange in the European Administrative Union – An Introduction,’ 20 European Public Law, 65–70. Häberle, Peter (1991), ‘Gemeineuropäisches Verfassungsrecht,’ Europäische Grundrechte Zeitschrift 18, 261–74. Hofmann, Herwig C.H. et al. (2011), Administrative Law and Policy of the European Union, Oxford: Oxford University Press. Hofmann, Herwig C.H. et al. (2014) (eds), ReNEUAL Model Rules on EU Administrative Procedure, http://www. reneual.eu/index.php/projects-and-publications/reneual-1-0, last visited 18 September 2016. Huber, P.M. (2014), ‘Grundzüge des Verwaltungsrechts in Europa’, in Armin von Bogdandy et al. (eds), Handbuch Ius Publicum Europaeum Vol. 5, Munich: C.F. Müller Verlag, 6–72. Lenaerts, Koen (2003), ‘Interlocking Legal Orders in the European Union and Comparative Law’, 52(4) International and Comparative Law Quarterly, 873–906. Lenaerts, Koen (2004), ‘In the Union we Trust: Trust-Enhancing Principles of Community Law’, 41(2) Common Market Law Review, 317–43. Metzger, Gillian (2010), ‘Ordinary Administrative Law as Constitutional Common Law’, 110 Columbia Law Review, 479–536. Rennert, Klaus (2016), ‘Anstelle eines Grußworts: Die Sicht des Bundesverwaltungsgerichts’, in Jens-Peter Schneider et al. (eds), ReNEUAL-Musterentwurf für ein EU-Verwaltungsverfahrensrecht – Tagungsband, Munich: Beck, 19–24. Schneider, Jens-Peter (2014), ‘Germany’, in Jean-Bernard Auby (ed.), Codification of Administrative Procedure, Brussels: Bruylant, 203–26. Schneider, J.-P. (2016a), ‘The ReNEUAL codification project: Book III’, in Matthias Ruffert (ed.), The Model Rules on EU Administrative Procedures: Adjudication, Groningen: Europa Law Publishing Groningen, pp. 1–15. Schneider, J.-P. (2016b), ‘Information Exchange and its Problems’, in Carol Harlow et al. (eds), Research Handbook on EU Administrative Law, Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing (forthcoming). Schneider, J.-P. (2016c), ‘Einzelfallentscheidungsverfahren als Gegenstand von Buch III des ­ReNEUAL-Musterentwurfs’, in: Jens-Peter Schneider et al. (eds), ReNEUAL-Musterentwurf für ein  EU-­ Verwaltungsverfahrensrecht – Tagungsband, Munich: Beck, 129–42. Schönberger, C. (2011), ‘Verwaltungsrechtsvergleichung’, in Armin von Bogdandy et al. (eds), Handbuch Ius Publicum Europaeum Vol. IV, Munich: C.F. Müller Verlag, 493–540. Schwarze, Jürgen (2005), Europäisches Verwaltungsrecht (2nd ed.), Baden-Baden: Nomos. Tridimas, Takis (2006), The General Principles of EC Law (2nd ed.), Oxford: Oxford University Press. Vialettes, Maud and Barrois de Sarigny, Cécile (2014), ‘Le projet d’un code des relations entre le public et les administrations’, Actualité Juridique Droit Administratif (AJDA), 402–4.

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40.  The constitutional basis of EU administrative law Matthias Ruffert

Constitutional texts are often silent or extremely brief as far as administrative law is concerned, to the chagrin of many scholars.1 Among the better-known texts, the French Constitu­tion of 1958 is perhaps the most copious, but beyond the classic statement that government ‘dispose de l’administration’ (Article 20 (2)), the text only includes some rules on nomination, territorial entities, the ombudsman and budgetary audits.2 In Germany with its great administra­tive tradition – just to mention Prussia and Max Weber –, the Grundgesetz (Basic Law) has a chapter on administration (Articles 83–91), but it only deals with the distribution of administrative competences between the federation (Bund) and the states (Länder) (Heitsch 2001). In the United States, most constitutional requirements for administrative law are drawn from Article II Section 2(2) – appointment – and Section 3 – faithful execution of the laws –, which leave open many controversial questions of administrative law (Aman and Mayton 2014, 491 ff.). In the United King­dom, with no written constitution, unwritten constitutional rules on administrative law are not abund­ ant, to say the least (Craig 2012a: introductory chapter). All in all, would it not be help­ful to have clear constitutional texts on the organization and activity of the administra­tion to determine such issues as the establishment of new agencies, the scope of administra­tive rulemaking, or the legitimacy of administrative action, rather than addressing these issues through the complicated interpretations of constitutional or administrative lawyers? At the end of the day, the choice of legal form is up to national legal systems. Beyond the state, at the supranational level of the EU, however, the topic of the constitutional basis of administrative law appears to be especially important. Under the doctrine of con­ferral, an international or supranational entity cannot exercise more powers than conveyed to it by its Member States. This principle is enshrined in Article 5(1) Treaty on European Union (TEU) for the European Union3 (Calliess 1999, 69 ff.; Calliess 2016: paras 6 ff.); hence, there is a need to describe EU administrative powers precisely. It may therefore be quite astonishing that until 2009, the entry into force of the Lisbon Treaty,4 the administrative powers of the EU had hardly been mentioned, and even the new Treaty did not include a particular chapter on the topic. There are a series of norms in the Treaties on administrative issues which will be explained in the third part of this chapter: Articles 17 TEU, Articles 197, 291(1) and 298 Treaty on the Functioning of the European Union (TFEU) and Article 41 Charter of Fundamental Rights of the European Union

  Cf. Tom Ginsburg, in this volume.   Constitution du 4 octobre 1958 (JORF n° 0238 du 5 octobre 1958, page 9151), latest amendment: Loi constitutionnelle n° 2008-724 du 23 juillet 2008 de modernisation des institutions de la Ve République, Articles 13 (2), 34, 47-2 (2), 71-1 (1). 3   Consolidated version: [2012] OJ C63/1. 4   [2007] OJ C306/1. 1 2

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668  Comparative administrative law (ChFREU5) (see below 2.), but before doing so, two constitutional preliminaries have to be addressed.

1.  CONSTITUTIONAL PRELIMINARIES 1.1  Does the EU have a Constitution? First, it may be disputed whether we can really consider the legal order of the European Union as a constitutional one. This dispute, however, appears to have been settled so that, on the one hand, the divergent positions are clear and, on the other hand, there is consensus on those points that are important for our subject. At any rate, the debate has cooled down compared with the global controversies (on the debate in international law see Kadelbach and Kleinlein 2007). There is clarity about the divergent positions: One line of argument puts particular stress on the inherent link between constitution and state and the notion of sover­eignty (Grimm 2012, 275, 2015). These commentators emphasize the difference between a constitution and a treaty, and search for a constitutional moment when the pouvoir constituant exercises its creative power. They seek a given community, a people, or, at least, a communicative collectivity that shapes the constitu­tion (Lindseth 2014, 533). An interesting variant of this view – and one that is more prominent in the US than in Europe – brings in the dichotomy of ‘constitutional’ and ‘administrative’ (above all Lindseth 2010 and Lindseth 1999). The supranational construction of European integration is viewed as a perpetuation of the rise of the administrative state since the nineteenth century: administrative tasks that cannot be resolved satisfactorily at the national level are referred to a supranational administrative level (Lindseth 2015). This level is described as highly institutionalized but not constitutionalized (Lindseth 2017). To have a constitution, it would need the aforementioned qualities (constitutional moment, people/communicative collectivity, etc.) (Lindseth 2015). Following this school of thought, a supranational entity such as the EU cannot have a constitution, at least not at this point in time. The German Bundesverfassungsgericht (Federal Constitutional Court) is very near to holding that view. In its judgment on the Treaty of Lisbon, it designates the Member States as ‘the constituted primary political area of their respective polities’ and excludes some policy fields from the grasp of EU power.6 However, the Court accepts another organizing concept using the term Staatenverbund, which it describes as ‘a close long-term association of states’.7 This moves towards the other line of argumentation that operates – more or less – on the basis of multilevel constitutionalism and that understands the EU as a polity created by the Treaties as its constitution (cf. Pernice 2009). The one and only constitutional moment is replaced by a process   [2012] OJ C326/391.   Bundesverfassungsgericht, judgment of 30 June 2009, 2 BvE 2/08, 2 BvE 5/08, 2 BvR 1010/08, 2 BvR 1022/08, 2 BvR 1259/08 and 2 BvR 182/09, available at www.bundesverfassungsgericht.de, paras 250 et seq.; quotation para. 301. 7   Ibid., para. 229. 5 6

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The constitutional basis of EU administrative law  669 of continuous constitutionalization (Peters 2001, 360  ff.), and the presumed obstacles to transnational communication are seen as exaggerated. The ECJ has more than once alluded to these ideas and held that the EU has its ‘own constitutional framework’.8 Despite the current moves toward political disintegration around ‘Brexit’, there is no need to set this line of argumentation aside. Both opinions, however, concur in the hierarchical nature of the Union’s legal order. The institutions are bound by the Treaties and are obliged to implement any requirements they contain. Today, the general primacy of EU law with respect to national law is also beyond question, as the ECJ held as early as 1964, and it is now generally accepted, subject only to limitations in very exceptional cases.9 This is exactly what a constitutional basis of administrative law should be about: EU principles and rules binding on administrative law and administrative activity in the EU institutions and in the Member States when implementing EU law. Such principles and rules, rooted in very basic concepts of the rule of law, democracy and human rights, can be called constitutional. What is at stake is simultaneously enabling and constraining power– at supranational level – in the fulfilment of its tasks.10 1.2  Does Administrative Law need a Constitution? Second, the general discussion about the relationship between constitutional and administrative law should not be set aside. We can find illustrations about this sometimes conflictual relationship in the history of European administrative legal systems. Thus, the Conseil d’État developed its supervisory role and its standards for controlling government from general principles without much attachment to the content of constitutions at that time (Legendre 2011, 22 ff.). The ‘founding father’ of German administrative law, Otto Mayer, in the preface to the third edition of his seminal Verwaltungsrecht wrote that ‘Verfassungsrecht vergeht, Verwaltungsrecht besteht.’ – Constitutions come and go, administrative law remains (Mayer 1924, preface). This phrase was deliberately provocative, an outrageous utterance in 1924 after the German monarchies, which had been in place since the early Middle Ages in some locations, collapsed, but it was true in a sense that there was a substantial amount of doctrinal consistency surviving the political cataclysm.11 Today, the situation is different in France as well as in Germany. In France, administrative law cases have for a long time been subject to scrutiny according to the bloc de constitutionnalité, and the question préjudicielle de constitutionnalité (QPC) has considerably strengthened the con­stitutional influence on administrative law (Frier and Petit 2014, para.  67; Heun 2002, 106). In Germany, Mayer’s proverb has been replaced since the 1950s by another saying. Fritz Werner, the first president of the Bundesverwaltungsgericht founded after the Second World War, said that ‘Verwaltungsrecht ist konkretisiertes Verfassungsrecht’ – administrative law is a concretized form of constitutional law (Werner   ECJ, Opinion 2/23, ECLI:EU:C:2014:2454, para. 158 (ECHR II).   ECJ, Case 6/64, ECR 1964, 1253 (Costa v. ENEL); Bundesverfassungsgericht, Order of 6 July 2010, 2 BvR 2661/06, para. 53 (Honeywell), available at www.bundesverfassungsgericht.de. 10   On the twofold function of constitutions see Möllers 2009, 170–75. 11   For a modern assessment of this proposition cf. Tom Ginsburg, in this volume.  8  9

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670  Comparative administrative law 1959). In the US, constitutional principles set the framework for administrative procedure and the judicial review of administrative action (Mashaw 1985, 2005).12 However, the debate continues in the UK: What would be the added value of giving constitutional status to basic rules and principles if they are already firmly enshrined in the rule of law, and if they have been so for ages (Craig 2015: 166 et seq.)? Looking at EU administrative law, however, we have to bear in mind the supranational character of the EU. The need to formulate constitutional foundations is especially high due to the particular legal nature of an entity that depends on a conferral of powers in the Treaties. Although we can discern a common European rule of law, laid down in general principles formulated by the ECJ over years, the idea of concretising constitutional aims and values at the level of administrative law is appealing for the sake of legal clarity and normative preci­sion.

2.  CONSTITUTIONAL ISSUES OF EU ADMINISTRATIVE LAW 2.1  The Complexity of Federalism: The European Composite Administration EU government combines Member States’ administration with administration at supranational level. The entity to be administered is obviously not a state, but a union of states, and in terms of administrative law, the concept of the ‘European Administrative Space’ is a metaphorical expression which is quite common; it usefully describes this situation and at the same time avoids the intrusion of constitutional complexities into the debate in administrative law (Olsen 2002 and SIGMA 1999). The starting point of analy­sis is certainly not a constitutional one. From the very beginning, administrative powers have been exercised by institu­tions/ authorities of the (then) European Economic Community and of the Member States, and the principle of separation applied (Schmidt-Aßmann 2004, paras 7/7 ff.). In general, this is still valid: When analysing administra­tive activity in the EU, we have to attribute it either to EU institutions or to Member States’ authorities (Hofmann 2004: 163 et seq.). This is important for judicial review – which court is competent for judicial review under which standards? – and liability – who is subject to damage claims in which court? –, and it causes particular difficulties concerning liability, which will be addressed later. The Treaty of Lisbon, for the first time, contains a constitutional rule on the relationship between EU and Member States’ administration. Article  291(1)  TFEU reads as follows: ‘Member States shall adopt all measures of national law necessary to implement legally binding Union acts.’ There is a dispute about the meaning of that sentence. Some authors argue that it applies only to rulemaking, and not to any other administrative activity, in­cluding adjudication (Stelkens 2012a, 2012b). They base their argument on the position of that article within the Treaties. It is not placed in a passage on a­ dministration – which does not exist – but in the section on rulemaking (‘The legal acts of the Union’). However, it appears to be more con­vincing to apply the article to the whole range of administrative activity (Bast 2012, 919; Peers and Costa 2012: 446; Hofmann and Türk 12

  I owe this remark to a helpful comment by Blake Emerson.

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The constitutional basis of EU administrative law  671 2012, 112; Krönke 2013: 59 ff.; Ruffert 2016: Art. 291 AEUV, para. 1). The wording hints at such openness: ‘all measures . . . necessary’ does not only cover abstract or general rules. Further, the section on legal acts also includes the decisions of EU institutions (cf. Article 288(4) TFEU). If interpreted in such a broad sense, section (1) of Article 291 must be read in the following way: if implementation of EU law is necessary, it is first and foremost up to the Member States to do this; the implementing powers of the EU institutions have to be drawn from other provisions of the Treaties. The real problem lies elsewhere. The normative emphasis on the Member States’ power of implementation is in conflict with administrative reality in the European administrative space. For a long time, co-operative structures have developed in that space (SchmidtAßmann 1996). Several types of structures exist, in particular, in various fields of product licensing (Schneider 2007: 315 et seq.; Sydow 2004, 118 ff.). The model of transnational state licensing is most common: A product is licensed in one Member State to be marketed in the whole Union. Co-operation is reduced to mutual trust, which is at an institutionally low level, but is high in substantive terms, as it requires common standards and legitim­ ate expectations of their sound implementation all over the Union. Another model of product licensing is called referential state licensing in which the licensing of a product in one Member State does not have automatic transnational effect but triggers a transnational administrative procedure involving several Member States’ authority and – in many instances – the Commission. Such licensing procedures, whether transnational or referential, may apply to ordinary products but also to food or chemicals. A further type of co-operation is the erection of networks of authorities, for example, in the field of tele­ communication and (formerly) energy, as well as in antitrust law (Ruffert 2007). Member States’ authorities together with the Commission co-operate in network structures, in particular to prepare rules for their respective fields. Often these rules are elaborated as some form of soft law (‘guidelines’). Such networks may also have specific tasks, as does the European Competition Network that dis­tributes competition law cases between the Commission and the competent antitrust authorities of the Member States.13 Some networks have grown into agencies that have become part of the complex federal structure of EU administration; they will be considered in the next section. The overall picture shows a combination of co-operation and hierarchy. In im­plementing EU law at the administrative level, the Member States do not act in isolation, but co-­ operate horizontally. Often, the supranational element involves vertical co-operation with the Commission. Administrative law scholarship named the overall construction composite or integrated European administration (Verwaltungsverbund) by (on this terminology Schmidt-Aßmann 2005, Britz 2006, Chiti 2004 as well as Hofmann and Türk 2007; see also Cassese 2004). Obviously, such a composite or integrated view of European administration is likely to be in conflict with the rule in Article 291 (1) TFEU as explained above. Therefore, that provision must be read together with Article  197(1)  TFEU, which ­stipulates: ‘Effective implementation of Union law by the Member States, which is 13   See http://ec.europa.eu/competition/ecn/index_en.html (accessed March 28, 2017). Legal basis: Council Regulation (EC) 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, [2003] L1/1; Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities, Council Document 15435/02 ADD 1.

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672  Comparative administrative law e­ssen­tial for the proper functioning of the Union, shall be regarded as a matter of common interest.’ This article is the only one in the title on Administrative Co-operation of the TFEU, and it transfers rather limited powers to the EU, namely to support Member States in their implementing efforts by measures, including the exchange of information and training schemes (Ohler 2012, paras 8 ff.; Classen 2015, paras 80 ff.). Member States are not obliged to avail themselves of such support, and the article is without prejudice to virtually every other administrative obligation of the Member States or the Commission (Article 197(2) and (3)). However, the principle in the first para­graph of Article 197 TFEU is formulated in a general way and clearly proclaims that imple­mentation (i.e. administrative performance) is not a matter for the Member States alone, but one of common interest (Ruffert 2016: Art. 197 AEUV, para. 21). Consequently, the first constitutional basis of EU administrative law is that the administra­tive implementation of EU law is a primary responsibility of the Member States, but that it is to be con­sidered a matter of common interest, which implies that the supra-national level is to be involved if necessary. 2.2  The Plurality of Supra-nationalism: The Administration of the EU The starting point for analyzing the administration of the EU is quite straightforward, although the relevant provisions were only inserted into the Treaties when the Treaty of Lisbon entered into force. It is common knowledge that the European Commission is at the heart of the EU’s administrative activity, but only since 2009, did the TEU provide in its Article 17 (1), fourth and fifth sen­tences, that the Commission, ‘shall execute the budget and manage pro­grammes. It shall exercise coordinating, executive and management functions, as laid down in the Treaties.’ Hence, the core administrative body of the EU is the Commission; perhaps it is interesting to note that the German version uses the term ‘Verwal­tungsfunktionen’ (i.e. administrative functions) in place of management functions. At any rate, the Commission with its large body of Directorates General14 is both empowered and able to perform these administrative functions. The unitary picture of supranational administration has been subject to profound tensions in re­cent years. Internal problems of accountability led to the outsourcing of a range of tasks, usu­ally with considerable budgets to be distributed, as in the field of research and education, to (now) six executive agencies.15 However, these executive agencies lack independence in many respects so that their action can still be attributed to the Commission. This is completely different for so-called regulatory agencies that are set up to be independent. They are vested with diverse administrative tasks to be performed in an independent way. Over the years, this ‘agencification’ led to a significant pluralization of the EU ad­ministration (Hofmann and Morini 2012). In the beginning, the number of new agencies was high (it is now 34), but their powers were rather limited, in most instances to the collection of statistical data or other information and to giving advice based on the

  Overview: http://ec.europa.eu/about/ds_en.htm (accessed March 28, 2017).   Council Regulation (EC) 58/2003 of 19 December 2002 laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes, [2003] OJ L11/1. On their creation Craig 2003. 14 15

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The constitutional basis of EU administrative law  673 data collected (Ruffert 2008). Since the end of the last decade, pluralization has made a qualitative shift. Agencies in network industries received real regulatory competences,16 and the powers of the newly created agencies for the supervision of financial markets are considerable (Kohtamäki 2012), even after many of these powers were transferred to the European Central Bank (ECB) in 2014.17 Although the process of agencification could have been taken up by the Lisbon Treaty in a separate chapter or title, they are only mentioned in several provisions (‘institutions, bodies, offices and agencies of the Union’18). Two constitutional issues have to be addressed: First, there has to be a legal basis for any agency that is founded at EU level. The founding regulations mention their respective bases. There is no general power of organization as in a state, but the ECJ is quite lenient in accepting a legal basis for the establishment of an agency.19 Following this line of jurisprudence, the Court allowed the EU institutions to base the foundation of the European Securities Market Authority (ESMA) on Article 114 TFEU, i.e. the power to establish the internal market through harmonization. If harmonization needs an institutional background, an agency can be established. Further, Article 298 TFEU vests the EU with the power to regulate the organization of an agency once it has been established (Ruffert 2016: Art. 298 AEUV, para. 129). Its first paragraph makes clear that the EU needs an administrative body: ‘In carrying out their missions, the institutions, bodies, offices and agencies of the Union shall have the sup­port of an open, efficient and independent European a­ dministration.’ (on the underlying model of government see Ziller 2012: 740  et seq.). The power to regulate internal matters of organization is laid down in the second paragraph: ‘the European Par­liament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall establish provisions to that end.’ However, the power to organize the EU administration should have been laid down in a more precise and coherent way. The second constitutional issue is the legitimacy of agencies. The Treaties do not settle this matter, but there are many developments that can generate an overall picture. The most astonishing aspect is that the core standard is drawn from a jurispru­dence that dates back to the ECSC and originally related to the transfer of single administra­tive tasks to private companies. Following the ECJ in Meroni (1958), the institutions of the (now) EU may delegate competences to newly created entities, such as the agencies, but have to preserve political discretion.20 This jurisprudence could and can be challenged in various ways; what can be said, at least, is that even though heavily criticized, the Court

16   See, in the field of energy, http://europa.eu/about-eu/agencies/regulatory_agencies_bodies/ policy_agencies/acer/index_en.htm (accessed March 28, 2017. 17   Council Regulation (EU) 1024/2013 of 15  October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, [2013] OJ L287/63. 18   This enumeration can found in 15 articles in TEU and TFEU (list in Ruffert 2016: para. 9) plus in Articles 41 and 42 of the Charter of Fundamental Rights of the European Union. 19   ECJ, Case C-217/04, ECR 2006, I-3771, paras  42  et seq. (ENISA); Case C-270/12, ECLI:EU:C:2014:18, paras 88 et seq. (UK v. Parliament and Council). 20   ECJ, Case 9/56, ECR 1958, 133 (Meroni I) and Case 10/56, ECR 1958, 157 (Meroni II).

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674  Comparative administrative law has not abandoned it (Craig 2012b, 154–5). It is, however, somehow deplorable that the ECJ never considered that the principle of democracy, now well enshrined in Article 10(1) and (2)  TEU, was important in this respect (Ruffert 2014, 361). If Article  10(2) TEU puts the European Parliament at the core of the institu­tional design for the sake of democracy and if the European Commission is accountable to­the European Parliament (Article 17(8) TEU), how do all these agencies find their place in a democratic construction of the European Union as a whole? Obviously the main reason for this deficiency is the federal element in the agencies’ structure which makes them appear as a perpetuation of the network structures already mentioned.21 Their boards are composed of Mem­ber States’ representatives together with the Commission, as we see in the agencies ‘miniUnions’ led by ‘mini-Councils’ for the fulfilment of certain administrative tasks. One last matter has become clear over time: It is by no means correct to declare that the administrative functions exercised by the agencies are merely technical and not political – and, therefore, not subject to requirements of democratic legitimacy. Issues like chemicals’ safety management, energy supply regulation, or financial market supervision are without doubt highly political; no one would assert that they were not based on politi­cal choice (Groß 2014: 207). All in all, it is by no means settled that the polycentric construction of legitimacy that is developing at EU level (Groß 2015; on the issue of legitimacy Peuker 2011) will find general acceptance in all Member States. It is one thing to develop constitutional guidelines given the scarcity of explicit provisions, but it is another to apply existing constitutional rules to the new, agency structures. The ECJ was faced with this issue when it had to decide whether agencies could be involved in delegated rulemaking. It should be noted that the preparation of binding, delegated legislation or the issuance of soft law is well known and that the legal soundness of these phenomena is not called into question under specific norms in the Treaties. However, in the ESMA case,22 an agency was empowered to issue binding rules, to be precise: ESMA was empowered to prohibit short-selling in the stock market. The Court – upon an action for annulment brought by the UK – used two lines of argument to back its rather generous approach. First it denied that delegated and implementation powers under Articles 290 and 291 TFEU were exclusively held by the Commission.23 Although there was no explicit conferral of such powers to a Union body, office or agency, the Treaty presupposed the possibility of such conferral in its Articles 263, 265, 267 and 277 which contained judicial review mechanisms that applied ‘to the bodies, offices and agencies estab­lished by the EU legislature which were given powers to adopt measures that are legally binding on natural or legal persons in specific areas’.24 Second, the Court placed an emphasis on the need for rapid intervention in financial markets and for a high degree of professional expertise on the part of the authorities involved.25 Obviously, this is rather weak. Methodically, it is highly questionable to infer a power to issue certain acts from powers to call into question such acts by means of judicial

    23   24   25   21 22

See above 2.1. ECJ, Case C-270/12, ECLI:EU:C:2014:18 (UK v. Parliament and Council). Ibid., paras 77 et seq. Ibid., paras 65 and 80. Ibid., para. 85.

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The constitutional basis of EU administrative law  675 review.26 Besides, only Article 277 TFEU of the articles enumerated by the Court clearly mentions an ‘act of general application adopted by an institution, body, office or agency of the Union’ (emphasis added). Articles 265 and 267 TFEU are only concerned with ‘acts of bodies, offices or agencies of the Union. . .’; Article 263 TFEU with ‘acts of bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties.’ Indeed, acts of general application, on the one hand, and decisions in individual cases, on the other hand, are unduly conflated by the Court’s first line of argument. The second line of argument is even more flawed. The urgency of the need for rapid intervention into the markets and the expertise of the rulemaking body cannot in themselves replace a clear confer­ral of power (Kohtamäki 2014; similarly before the judgment Chamon 2011, 1055). This is not to say that rulemaking by agencies is unacceptable per se; the polycentric structure of the EU administration is not necessarily illegitimate. The argument is rather, if the constitutional provisions on administrative matters are thin and sparse, more ­academic effort is needed to provide a sound constitutional basis for EU ad­ministrative law. 2.3  The Individual and Government: A Europe of Citizens The whole search for constitutional content in EU administrative law might appear futile if we consider that administrative law should above all be about the limitation of power to the benefit of the individual. At least, this is the first justification for administrative law, the second – which was dealt with in the sections above – is enabling the administration to exert proper action (Schmidt-Aßmann 2004, para. 1/30). So where is the individual, where is the citizen in EU administrative law – or do we have to accept that the Union’s citizens are reduced to administrés in this respect, as they used to be viewed in French law? Indeed, the original Treaties turned a blind eye to the protection of the individual. It was beyond the imagination of those who drafted them that the newly created Communities could be so powerful as to intrude into individual rights. However, the highly interventionist Common Agricultural Policy deeply affected individual rights, and it is in this field  – admittedly be­yond the reach of most ordinary administrative lawyers – that administrative legal principles and rules were first developed in the course of European integration (Schwarze 2006). The European Court of Justice responded to this challenge by creating general principles of law, which partly ma­tured into the ChFREU, binding since 2009.27 However, the develop­ment of the Court’s jurisprudence is not about human rights only. Of course, there are links between the protection of human rights and the protection of the individual in administrative law. We have to consider, however, that some

26   The relevant Working Group in the European Convention where the amendments to the articles quoted were adopted was more cautious: ‘It is also impossible to state categorically, when an agency is set up, that it will not perform such acts, even if the Regulation establishing it does not give it power to adopt decisions in the formal sense.’ (Final report of the discussion circle on the Court of Justice Doc. CONV 636/03, para  25). Cf. also ‘Right of appeal against agencies created by secondary legislation’ Working Document 09 of 10 March 2003; Communication from the Commission – The operating framework for the European Regulatory Agencies, Doc. COM(2002)718 final, pp. 13 et seq. Stelkens 2014 explicitly takes the contrary view. 27   Art. 6(1) of the Treaty of Lisbon, supra note 3.

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676  Comparative administrative law of the principles are genuinely administrative legal ones, and they continue to be ap­plied to the guarantees of the Charter: certainty, non-retroactivity, proportionality. Some of those administrative law rights have found explicit recognition in Article 41 of the Charter, the right to good administration: the right to impartial, fair and reasonably quick treatment; the right to be heard; the right of access to one’s file; the right to be given reasons; the right to damages in case of a breach of law, and – very important since the very beginning of European administration28 – the right to be heard in any language of the Treaties. This very article is not exempt from critique. Some argue that such minimal rights are insufficient, others criticize the scope of the article which only applies to EU institutions’ activities while other parts of the Charter also apply to Member States’ actions (on this debate see Ruffert 2016; Art. 41 GRCh, para. 9). Although any such criticism must be taken seriously, it should be underlined that Article 41 contains a general recognition of the individual in EU administrative law, and provides a basis for further codification of the individual’s position – as is reflected in the ReNEUAL project29 presented in the chapter by Herwig Hofmann and Jens-Peter Schneider. It is fair to say that if we construct a constitution of EU administrative law, the position of the individual ought to be put at the cen­tre. Other specific rights support the protection of the individual in Article 41, such as the right of access to documents (Ar­ticle 42) and the right of access to justice (Article 47).

3.  CONSEQUENCES FOR COMPARATIVE RESEARCH To sum up, we can discern constitutional bases for EU administrative law in all of the three fields analyzed, but with different normative force. What consequences should be drawn from this picture for administrative law research which extends beyond parochial developments and takes a cross-border, if not a global, per­spective? Three final points should lead to further discussion. First, the various linkages between constitutional and administrative law in the EU reflect the political character of administrative law. Although doctrine more than once tried to claim that administrative law is purely technical and somehow a-political, it is not. Institution building, rulemaking, the attribution of powers in a federal en­tity, the position of citizens in relation to government – these are all highly political issues. The political impact becomes apparent in many fields of EU administrative law where the quest for deepening and broadening European integration shapes administrative law more than any theoretical or doctrinal approach in administrative law properly speaking. This is most visible in the rapid building of the Banking Union with a plethora of administrative in­struments, many of them vested in the European Central Bank which was certainly not de­signed to take such a core role in the field of supervision and resolution (Lamandini 2015). Another instance is less spectacular, but more settled in its continuity. In the field of research policy, the EU has been building new institutions and shaping new instruments

28   EEC Council: Regulation No 1 determining the languages to be used by the European Economic Community, [1958] OJ 17/385. 29   See Hofmann and Schneider in this volume.

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The constitutional basis of EU administrative law  677 of action, which sometimes matured into Treaty provisions over the years and sometimes did not (Pilniok 2011). Government is always political, and administrative law often serves political functions. It must consequently be constitutionally well founded. Arguments of administrative efficiency (security, welfare and the like – ‘output’ in short) are not sufficient to guarantee legitimacy, to provide accountability, and to ensure the legal protection of the individual. Second, although the administrative law of the EU is influenced by many peculiar­ ities, whether they are due to its supranational character or whether they arise from the ­combination of different administrative legal cultures from the Member States, it is most likely that there are similar phenomena in other jurisdictions. Everywhere political developments affect administrative law, so that there is an overall need for a constitutional basis of administrative law. This observation triggers the need for comparative research. There are many comparative efforts to understand how the institutions, instruments and norms of EU administrative law have been shaped out of parochial models within the EU, as can be shown by the most impressive handbook Ius Publicum Europaeum (von Bogdandy, Cassese and Huber 2010, 2011, and 2014). There is, however, less comparative research that compares EU administrative law with other federal entities such as the US. Important exceptions notwithstanding (Schütze 2011; Strauss 2006; Bermann 2008), this is a field for deeper research in the near future.30 It would be useful to ask how different jurisdictions secure the constitutional basis of administrative law, and Europeans can learn from comparative insights as they seek to improve the design of EU administrative law. Third, if the constitutional basis provides the link between political developments, on the one side, and administrative law, on the other, we face a challenge for any systematic view of administrative law. Politics follows its own rules, and democracy is not bound by administrative lawyers’ needs. Given that constitutional protections serve democratic government, one might wonder whether a systematic perspective on administrative law is really needed as long as the institutions, instruments and procedures for the protection of the individual are safely in place. However, a systematic comparative view can help us to find out whether there are common (or at least) similar institutional developments, standard forms of administrative action and, above all, global standards for the protection of citizens’ interests that would call for a justification in case the administration deviates from the law to the detriment of the individual. The effort of building European administrative law out of a particular consti­tutional situation is impressive, but it is perhaps not unique. The process of shaping a common administrative law for the European administrative space may serve as an example for globally overarching comparative approaches.

REFERENCES Aman, Alfred C. and William T. Mayton (2014), Administrative Law, 3rd ed., St Paul, MN: West. Bast, Jürgen (2012), ‘New Categories of Acts after the Lisbon reform: Dynamics of Parliamentarization in EU Law,’ Common Market Law Review, 49(3), 885–927. Bermann, George A., Charles H. Koch Jr and James T. (2008), Administrative Law of the European Union, Chicago: American Bar Association.

  See also Tom Ginsburg in this volume.

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678  Comparative administrative law von Bogdandy, Armin, Sabino Cassese and Peter Michael Huber (eds), (2010), (2011), (2014) Ius Publicum Europaeum, vols. III–V, Heidelberg: C.F. Müller. Britz, G. (2006), ‘Vom Europäischen Verwaltungsverbund zum Regulierungsverbund – Europäische Verwaltungsentwicklung am Beispiel der Netzzugangsregulierung bei Telekommunikation, Energie und Bahn,’ Europarecht 41, 46–77. Calliess, C. (2016) ‘Art. 5 EUV,’ in Christian Calliess and Matthias Ruffert (eds), EUV/AEUV – Kommentar, 5th ed., Munich: C.H. Beck. Calliess, C. (1999), Subsidiaritäts- und Solidaritätsprinzip in der Europäischen Union, 2nd ed., Baden-Baden: Nomos. Cassese, Sabino (2004), ‘European Administrative Proceedings,’ Law and Contemporary Problems 68(1), 21–36. Chamon, M. (2011), ‘EU Agencies between Meroni and Romano or the Devil and the Deep Blue Sea,’ Common Market Law Review 48, 1055. Chiti, E. (2004), ‘Decentralisation and Integration into the Community Administrations: A New Perspective on European Agencies,’ European Law Journal 10(4), 402–38. Classen, C.D. (2015), ‘Art. 197 AEUV,’ in Eberhard Grabitz, Meinhard Hilf and Martin Nettesheim (eds), Das Recht der Europäischen Union, Munich: C.H. Beck. Craig, Paul (2015), UK, EU and Global Administrative Law. Foundations and Challenges, Cambridge: Cambridge University Press. Craig, Paul (2012a), Administrative Law, 7th ed., London: Sweet & Maxwell. Craig, Paul (2012b), EU Administrative Law, 2nd ed., Oxford: Oxford University Press. Craig, Paul (2003), ‘The Constitutionalization of Community Administration’, Jean Monnet Working Paper 3/2003. Frier, Pierre-Laurent and Jacques Petit (2014), Droit administratif, 9th ed., Paris: LGDJ. Grimm, Dieter (2015), Sovereignty, New York: Columbia University Press. Grimm, Dieter (2012) ‘Wer ist souverän in der Europäischen Union?,’ in Dieter Grimm, Die Zukunft der Verfassung II: Auswirkungen von Europäisierung und Globalisierung, Berlin: Suhrkamp, pp. 275–92. Groß, Thomas (2015), Die Legitimation der polyzentralen EU-Verwaltung, Tübingen: Mohr Siebeck. Groß, Thomas (2014), ‘Ist die Wirtschaftskrise ein Katalysator für das Entstehen unabhängiger Behörden? Reformen der Bankaufsicht im Vergleich,’ Die Verwaltung 47(2), 197–219. Heitsch, Christian (2001), Die Ausführung der Bundesgesetze durch die Länder, Tübingen: Mohr Siebeck. Heun, Werner (2002), ‘Verfassungsrecht und einfaches Recht – Verfassungsgerichtsbarkeit und Fachgerichtsba rkeit,’ Veröffentlichungen der Vereinigung der Deutschen Staatsrechtslehrer 61, 80–118. Hofmann, H. and A. Morini (2012), ‘Constitutional Aspects of the Pluralisation of the EU Executive through “Agencification,”’ European Law Journal 36, 419–33. Hofmann, H. and A. Türk (2012), ‘Die Ausübung übertragener Normsetzungsbefugnisse durch die Europäische Kommission,’ Zeitschrift für Gesetzgebung 27, 105–37. Hofmann, H. and A. Türk (2007), ‘The Development of Integrated Administration in the EU and its Consequences,’ European Law Journal 13(2), 253–71. Hofmann, Jens (2004), Rechtsschutz und Haftung im Europäischen Verwaltungsverbund, Berlin: Duncker & Humblot. Kadelbach, S. and T. Kleinlein (2007) ‘International Law – a Constitution for Mankind? An Attempt at a Re-appraisal with an Analysis of Constitutional Principles,’  German Yearbook of International Law 50, 303–48. Kohtamäki, Natalia (2014), ‘Die ESMA darf Leerverkäufe regeln – Anmerkung zum Urteil des EuGH vom 22. Januar 2014,’ Europarecht 49(3), 321–32. Kohtamäki, Natalia (2012), Die Reform der Bankenaufsicht in der Europäischen Union, Tübingen: Mohr Siebeck. Krönke, Christoph (2013), Die Verfahrensautonomie der Mitgliedstaaten der Europäischen Union, Tübingen: Mohr Siebeck. Lamandini, Marco, David Ramos Muñoz, and Javier Solana Álvarez (2015), Depicting the Limits to the SSM’s Supervisory Powers: The Role of Constitutional Mandates and of Fundamental Rights’ Protection, Rome: Quaderni di Ricerca Giuridica, Banca d’Italia ed., No. 79. Legendre, P. (2011), ‘L’histoire du droit administratif’, in Pascale Gonod, Fabrice Melleray and Philippe Yolka (eds), Traité de droit administratif, Paris: Dalloz, pp. 3–58. Lindseth, P. (2017) ‘Between the “Real” and the “Right”: Explorations Along the Institutional-Constitutional Frontier,’ in Maurice Adams, Ernst Hirsch Ballin and Anne Meuwese (eds), Constitutionalism and the Rule of Law: Bridging Idealism and Realism, Cambridge, UK: Cambridge University Press. Lindseth, P. (2015) ‘Supranational Organizations’, in Ian Hurd, Ian Johnstone and Jacob Katz Cogan (eds), Oxford Handbook of International Organizations, Oxford: Oxford University Press. Lindseth, P. (2014), ‘Equilibrium, Demoi-cracy, and Delegation in the Crisis of European integration,’ German Law Journal 15(4), 530–67. Lindseth, P. (2010), Power and Legitimacy, Oxford: Oxford University Press.

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41.  What’s in a label? The EU as ‘administrative’ and ‘constitutional’ Peter L. Lindseth

1. INTRODUCTION: THE CHALLENGE OF ‘COMING TO TERMS’ WITH EU GOVERNANCE Regulatory power—particularly the power to make rules of general and prospective application (‘rulemaking’)—is today increasingly diffused throughout our systems of governance. Regulatory power includes, of course, rules that are contained in statutes adopted by the ‘constitutional’ legislature—that is, by the body understood to possess centralized rulemaking power delegated directly from the people themselves. But regulatory power also refers—indeed more typically refers—to decentralized norm production and enforcement in the hands of ‘administrative’ bodies exercising authority under enabling statutes adopted by the legislature. These regulators may include executive departments, independent bodies like central banks or agencies, or perhaps even public corporations or ‘quangos’ (that is, quasi-autonomous non-governmental organizations). When one adds in regional and local bodies, the regulatory picture becomes even more complex. This picture, however, only begins to account for the diffusion and fragmentation of regulatory power within the state. It does not account for the shift in regulatory power that takes place today beyond the confines of the state, whether through privatization or supranational or international delegation. I will leave aside the question of regulatory privatization, no matter how important that dimension is becoming to comparative administrative law (see, for example, Auby; Barak-Erez; Dickinson; and Ramraj in this volume; see also Lindseth 2006). Instead, the focus here will be on the diffusion of regulatory power to public entities operating beyond the state, with particular reference to the supranational dimension of this phenomenon as exemplified by the European Union (EU). In the process of European integration, each Member State has of course retained its own constitutional legislature—a national parliament (NP)—while also possessing its own administrative apparatus with a distinctive national history, character, and complexity. The EU, however, also purports to have a ‘legislature’ of its own—the Commission, Council and European Parliament (EP) acting in various combinations depending on the domain—while also possessing an increasingly variegated ‘administrative’ sphere that includes the Commission’s directorates-general (DGs), national-supranational committees (‘comitology’), treaty-based bodies like the European Central Bank (ECB), and an extensive array of agencies created by EU legislation. When we add national administrative actors into this picture—as we must do because, in the EU, supranational bodies normally only produce norms but depend on national actors to interpret and enforce them—then what emerges is an image of a ‘composite’ administrative sphere of extraordinary multilevel diffusion and fragmentation (see Ruffert in this volume). So how shall we ‘come to terms’ with this complex reality of regulatory power in the 680 Susan Rose-Ackerman, Peter L. Lindseth and Blake Emerson - 9781784718657 Downloaded from Elgar Online at 04/09/2018 05:09:26PM via University of Liverpool ROSE-ACKERMAN_9781784718657_t.indd 680

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The EU as ‘administrative’ and ‘constitutional’  681 EU? I use the phrase ‘coming to terms’ in two senses, which play off each other in interesting ways. The first is nominal: literally, how shall we name what we see? What is the conceptual vocabulary that best captures the character of the EU system of governance? If we regard this nominal challenge in strictly legal terms and, more importantly, give the pronouncements of the European Court of Justice (ECJ) and sympathetic legal commentators the dispositive role in our determination, then the response is clear: the EU is a ‘constitutional’ level of governance in its own right, with the EU treaties serving as a ‘constitutional charter of a Community based on the rule of law.’1 The implication is that the centralized rulemaking process in the EU—in which the Commission ‘proposes’ and the Council and EP together ‘dispose’ in various ways—is also of a ‘constitutional’ character, serving as the EU’s ‘legislature.’ In this view, the EU’s ‘administrative’ sphere begins where this ‘legislative’ sphere ends (see, e.g., Hofmann and Schneider; Mendes; Ruffert; and Saurer in this volume for examples of commentators adopting this position). The other sense of ‘coming to terms’, however, looks beyond the nominal and legal and moves into the sociological and historical domains. It recognizes that ‘coming to terms’ entails a deeper process of reconciliation in which European public law at all levels (national and supranational) confronts a feature of EU governance that the nominal constitutional discourse either elides or outright ignores. I am speaking here of the core disconnect at the heart of European integration, in which regulatory power has undoubtedly shifted to the supranational level but the EU lacks autonomous democratic and constitutional legitimacy to support the exercise of that power in its own right. This legitimacy shortfall is not necessarily a permanent feature of EU governance—the EU may yet attain its own democratic and constitutional legitimacy in the future, depending on whether the necessary socio-political, socio-cultural developments take place (notably the emergence of an ever elusive European ‘demos’).2 But for now the democratic and constitutional disconnect remains a persistent feature of EU governance, one that, to date at least, no amount of institutional engineering has been able to overcome. To be sure, the EU possesses various other kinds of legitimacy (legal, technocratic, and functional) and these have been crucial to supporting the EU’s vast regulatory power.3 Nonetheless, EU governance continues to depend on the Member States to supply the most robust forms of democratic and constitutional legitimacy, precisely as one would expect of a system in which the ‘principals’—in a legitimacy sense—remain national, while the regulatory ‘agents’ are increasingly supranational. The problem with the nominal constitutionalism of the ECJ and legal commentators, therefore, is that it proceeds ‘as if’ the EU possesses this robust form of legitimacy in its own right, in defiance of the EU’s actual socio-historical character. In ‘coming to terms’ with this reality, we must do more than name it; rather, we must also understand how European law, both national and supranational, has evolved to accommodate the   Case 294/83, Parti écologiste ‘Les Verts’ v. Parliament, 1986 E.C.R. 1339, 1365 para. 23.   Democracy and constitutionalism should be understood to emerge through overlapping historical processes, given their mutual dependence on the existence of a historically constructed ‘demos’ perceiving itself capable as well as entitled to self-rule. In this view, I am following the leads suggested by the work of Jed Rubenfeld 2001 and Bruce Ackerman 1991. For further elaboration, see Lindseth 2014, 538–9. 3   See infra note 12 and accompanying text. 1 2

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682  Comparative administrative law ­ nderlying socio-historical disconnect and contradictions it raises. From this sociou historical perspective, the analytical focus must necessarily move beyond the nominal constitutionalism of the ECJ and sympathetic legal commentators to a more comprehensive understanding of the EU’s legal and institutional development as a novel instance of regulatory power beyond the confines of the state (see, e.g., Lindseth 1999; Lindseth 2010; Lindseth 2014). What this less ECJ-centric analysis tells us is that, despite what EU judges, lawyers, and law professors maintain, there are numerous features of EU public law that are not merely in tension with, but also that directly contradict, the dominant constitutionalist discourse. First and foremost, the EU remains almost entirely dependent on the Member States for the sine qua non of genuine constitutional power: the legitimate capacity to extract in a compulsory fashion and then redirect—what I am calling ‘mobilize’—either fiscal resources (taxing and spending) or human resources (policing and defense) for the benefit of the polity as a whole (see Lindseth 2017). The manner in which the Member States may choose to use these resources (including any borrowing to make up for fiscal shortfalls) is increasingly subject to supranational surveillance and discipline to which each state has pre-committed by way of the EU treaties.4 Nonetheless, the multiple current crises in European integration have made repeatedly clear that the EU now lacks the legitimacy to take over this mobilization function itself in any macroeconomically or geopolitically significant sense.5 Secondly, even as to regulatory power that falls short of compulsory resource mobilization—particularly rulemaking and adjudicative power—the EU remains dependent on mechanisms of national oversight and intermediation that channel the more robust democratic and constitutional legitimacy of national institutions to the EU level. These mechanisms of ‘mediated legitimacy’—drawing importantly on models developed in the postwar administrative state (Lindseth 2004)—have been central features of the institutional development of EU governance since its inception (Lindseth 2010). These two elements—nationally grounded resource mobilization and nationally mediated legitimacy—suggest that the EU system of governance is ultimately of a derivative, delegated, ‘administrative’ character, albeit of a novel supranational type, operating on behalf of multiple constitutional ‘principals’ in the various Member States. From this perspective the EU as a whole, including its purported ‘legislature’ and indeed even its ‘courts’ (including the ECJ), operate as supranational regulatory agents of constitutional principals who remain on the national level. These principals do not necessarily control their supranational administrative agents—indeed, normative autonomy has been the very purpose of supranational delegation, and for sound functional reasons.6 Nonetheless, the national principals do provide the EU’s ultimate underpinnings of democratic and constitutional legitimacy. We must thus dispense with an idealized understanding of a ‘Westphalian’ principal with unbridled power to direct regulatory outcomes within a particular territory, an ahistorical reading of state sovereignty if there ever was one 4   On the role of the EU treaties as legal ‘pre-commitment’ mechanisms, see below n.7 and accompanying text. 5   Again, this may change in the future, but as of today this anchoring of legitimate compulsory extraction at the national level suggests a crucial fault line between the EU’s primarily regulatory rather than any potential future constitutional character, cf. Lindseth 2012c. 6   See infra notes 10–11 and accompanying text.

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The EU as ‘administrative’ and ‘constitutional’  683 (Sheehan 2006). As a consequence of institutional complexity, the power of control over administrative actors, whether de facto and de jure, is often greatly diminished, if sometimes nearly relinquished entirely, except in all but the most extreme circumstances. In the shift from ‘the simple to the complex’ (Braibant 1993), constitutional principals have often come to settle for something less than actual control—perhaps merely supervision, coordination, or what an American administrative lawyer would call ‘oversight’ (Lindseth et al. 2008; Strauss 2007). This shift away from actual control toward mediated legitim­ ation of administrative governance, whether within or beyond the state, necessarily has given rise to the need to reconcile this socio-historical reality of diffuse and fragmented regulatory power with conceptions of strongly legitimated democratic and constitutional government on the national level. Armed with this analytical framework, we can begin to answer the core question posed by this chapter: What’s in a label? Stated in the most direct way possible, this chapter argues that it matters a great deal legally how we view the EU socio-historically, particularly in this challenging task of reconciliation. If we determine that the EU is not properly understood as autonomously ‘constitutional’ but instead is merely an ­‘administrative’ level of governance (even of a novel, powerful, supranational type), this then has significant implications for how to reconcile EU law with its properly administrative character. Most importantly, it suggests that we should deeply question the nominal ‘as if’ constitutionalism of the ECJ, rethinking fundamental judicial doctrines to bring them more into line with the EU’s deeper administrative character in a socio-historical sense (Lindseth 2016).

2.  EUROPEAN CONSTITUTIONALISM REVISITED The idea that EU public law is, at least in part, a kind of ‘constitutional’ law for supra­ national governance is deeply ingrained in European legal-scholarly discourse. Sometimes this constitutional character is taken as a given and unquestioningly asserted (see, e.g., Hofmann and Schneider or Saurer in this volume). Other times the autonomously constitutional character of EU law is acknowledged as subject to contestation even as the commentator adopts an approach that assumes EU public law is, at least in part, ­‘constitutional’ law (see, e.g., Ruffert in this volume or, in greater detail, Tuori 2015). No one, of course, actually claims that the EU possesses a formal written constitution. The typical claim, rather, is that the EU possesses a constitution in a material sense, grounded in the treaties but, more importantly, elaborated by the jurisprudence of the ECJ. This material ‘constitution’ for the EU establishes and delimits institutional powers (both vertically and horizontally) and also defines a new patrimony of European rights that judges may enforce on behalf of litigants against public power wherever located. The EU’s ‘constitution’ is thus not the result of a particular mobilization by a European constituent power (or ‘demos’) but is instead the outcome of an on-going process in which the normative output of the ECJ, in interpreting the EU treaties, has played a decisive role. The Finnish legal theorist Kaarlo Tuori has recently expressed the consensus position in his 2015 monograph, European Constitutionalism, arguing that the ECJ is the crucial actor in the EU’s veritable ‘constitution-making’ process (Tuori 2015, 33, 115, 327–8; see also Saurer in this volume). Recalling Ockham’s razor, however, we should be cautious about adopting an analytical

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684  Comparative administrative law label unless it actually adds to our understanding of the phenomenon under investigation. What does the ‘constitutional’ label actually add to our understanding of EU public law? To examine this question, let me consider Tuori’s consensus account a bit further. Tuori invokes Kelsen’s notion of a constitution as ‘a higher law, the law of laws,’ the main function of which is ‘to regulate the production of new legal norms’ and in cases of conflict, to enjoy prevalence (Tuori 2015, 10–11). In this way, Tuori seeks to account for the ECJ’s core principles of ‘direct effect and supremacy,’ which are functionally designed to ensure ‘the effective and uniform application of European law’ throughout the EU (Tuori 2015, 16). But there is a central problem with this ‘constitutional’ characterization that Tuori never actually confronts: If we substitute a less normatively loaded term like legal entrenchment for the dominant idea of constitutionalization via ECJ case law, then it becomes difficult to distinguish EU public law, and more particularly the EU treaties, from a kind of enabling legislation in modern administrative governance. Enabling legislation also ‘regulates the production of new legal norms’ and, within a particular regulatory domain, also constitutes ‘a higher law’ that enjoys normative prevalence over subordinate norms in cases of conflict. In principal-agent terms, enabling legislation uses legal entrenchment as a pre-commitment mechanism by which constitutional principals confer power on autonomous agents (whether within or beyond the confines of the state) in order to ensure a stream of policy choices in line with the original conferral.7 The purpose of such legislation is thus not to make rules for particular sectors but, in response to functional demand, to confer power on regulatory institutions to make rules, subject to whatever substantive and procedural constraints are defined in the enabling legislation or elsewhere.8 Tuori claims that EU law nonetheless meets two ‘central criteria for European constitutionalization’: ‘granting rights to private subjects and establishing direct relationships between them and European institutions’ (Tuori 2015, 37; see also 110). But these criteria are not peculiarly constitutional either: enabling legislation also grants rights and establishes legal and institutional relationships. These two elements would also be present even if we saw the ECJ as a new type of supranational administrative adjudicator, just as Europe’s founders apparently did.9 Conferring regulatory power on supranational bodies need not signal constitutionalization but rather simply the delegation of greater normative autonomy to supranational ‘pre-commitment’ agents in fulfilling their regulatory functions—what has been called a ‘trustee’ agency (Majone 2001). The purpose of this trustee agency, most importantly, is to prevent ‘principal drift’ among the multiple Member States,10 thus maintaining the credibility of their  7   On the relationship between national and supranational forms of delegation as pre-commitment mechanisms, see Majone 1998.  8   Cf. Rubin 1989, 380–85 (describing ‘transitive’ versus ‘intransitive’ legislation).  9   The French socialist André Philip, in a pamphlet supporting the Schuman Plan published by the European Movement in 1951, expressed the typical view of the Court and its role: The new ECJ had been explicitly ‘modeled on the French Council of State (Conseil d’Etat), an administrative institution which has in fact ensured the protection of private interests and individual liberties for more than a century,’ Philip 1951, 38; see also Ministre des affaires étrangères 1951. 10   See, e.g., Menon and Weatherill 2002, 119. Cf. also Thatcher and Stone Sweet 2002, 6 (discussing ‘[c]omposite principals’ as ‘a principal comprised of multiple actors whose collective makeup changes periodically through, for example, elections,’ and which thus ‘may not possess

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The EU as ‘administrative’ and ‘constitutional’  685 initial policy commitments over time (most importantly, to free movement in its various forms).11 Perhaps sensing the substantive weakness of his constitutional vocabulary, Tuori returns to functional comparison. He argues that, because the ECJ ‘exercise[s] functions which equal those of state constitutional courts,’ this justifies ‘applying constitutional concepts to the European level’ (Tuori 2015, 13). He later elaborates that ‘analogous constitutional functions . . . warrant transposition to a transnational level of a constitutional vocabulary elaborated in the state setting’ (Tuori 2015, 28). The problem with Tuori’s list of purported constitutional functions (‘constitutive,’ ‘positioning,’ ‘organizing,’ ­‘restrictive,’ and ‘­legitimizing’) (Tuori 2015, 29) is that it leaves out the most crucial function of all: the capacity to extract and redirect fiscal and human resources for societal ends in a compulsory and legitimate fashion. This might be called the ‘metabolic’ function. All regulatory authority—whether in terms of rulemaking, enforcement, or ­adjudication—ultimately depends on whether, how, and where this metabolic function has been ‘constituted’ (in the EU case, at the national level). This is the sine qua non of constitutional authority around which all ‘constitutional law,’ whether institutional or rights-based, ultimately revolves. Legal, technocratic, and/or functional legitimacy may be sufficient to support the delegation of regulatory power to an administrative body.12 But that body will not have the autonomous legitimacy to mobilize resources, unless the body has a legal authorization from a legislative ‘principal’ that in fact has that constitutional authority. Such fiscal powers to tax, spend, and borrow, as well as the powers of human mobilization in policing and defense, are essential to give lifeblood to the regulatory regime, no matter how vast or autonomous its normative power might otherwise be. For this reason, authorizing legitimate compulsory mobilization is the core power of constitutional legislatures. In the face of a plethora of functional demands in the modern era legislatures continue to reserve these powers to themselves even as the remainder of regulatory authority has, to varying degrees, proven capable of conferral elsewhere (depending on the system). To the extent that constitutional constraints on delegation mean anything in administrative governance, the power to authorize the legitimate compulsory mobilization of resources—even if subject to self-imposed legal

stable, coherent preferences over time. Instead, they may be competitive with one another over some or many issues, as when member state governments in the EU disagree on matters of policy that fall within the agents’ mandate’). 11   Although not presented in principal-agent terms, Weiler’s notion of supranational bodies preventing selective ‘exit’ is consistent with this analytical framework. Weiler 1991. 12   Administratively produced norms are generally experienced as at least legally legitimate when they are understood to remain within the substantive and procedural constraints of the en­abling legislation and the constitution. Furthermore, they may be experienced as technocratically legitimate when they are seen as the product of administrative expertise derived from informed evidence gathering and reason giving (by contrast, norms produced by constitutional legislatures are not, generally speaking, subject to the same expertise-based constraints; see infra note 34 and cases cited). Additionally, administrative rules are experienced as functionally legitimate in the face of the perceived incapacity of constitutional legislatures to produce norms of the scope and depth needed to address ‘modern problems’—a claim often used to justify delegations of normative and regulatory power to supposedly more capable administrative actors (Landis 1938, 1; see also Willis 1935; Loughlin 2005; Lindseth 2015).

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686  Comparative administrative law pre-commitments to oversight or discipline from the outside—is the one dimension of authority that a constitutional legislature cannot delegate. Nor can an executive or administrative body take over this power directly, with or without legislative authorization, at least not without fundamentally altering the democratic and constitutional character of the system. Legitimate compulsory power to mobilize resources defines the boundary between a legitimate constitutional ‘principal’—normally an NP—and the whole range of regulatory ‘agents’ that benefit from functional transfers of normative power, whether within or beyond the confines of the state. The metabolic function cannot be included among those fulfilled by the EU because it simply does not yet exist at the supranational level in any significant sense. The Eurozone crisis, for example, may have ‘opened inroads into Member State sovereignty’ via supra­ national surveillance over national budgets (itself of questionable rigor),13 ‘but the ­decisive step in the direction of Europeanizing fiscal policy and building up a Union fiscal capacity has not been taken’ (Tuori 2015, 233, 300). The EU’s continuing dependence on national resource mobilization is a direct result of ‘the weak self-identity and frail mutual solidarity of European citizenry,’ which serve as the essential ‘sociological and cultural presuppositions for the emergence of a European demos, the subject of European democracy’ (Tuori 2015, 221). In the Eurozone crisis, the lack of such fiscal capacities has forced reliance on a strategy in which all essential costs— political and economic—have been borne by the Member States themselves, because that is where legitimate compulsory mobilization powers still reside (cf. Thimann 2015). Again, the EU may regulate, on a pre-commitment basis, the exercise of these powers, but it cannot overtake them (at least not yet). Similarly, as to the mobilization of citizens in the refugee crisis, these crucial functions ‘are related to the Weberian characteristics of the modern state as possessor of a monopoly on legitimate violence;’ and as such, ‘they are protected by basic constitutional principles which, according to the constitutional doctrine of the Member States, pose insurmountable hurdles to additional transfers of sovereignty rights’ (Tuori 2015, 314). The EU’s powers are thus limited to normative and regulatory harmonization, coordination, and surveillance—including pre-commitment authority to oversee budgets and refugee processing—but they do not extend to genuine constitutional powers to mobilize fiscal and human resources. This essential fact points to the fundamental weakness in conventional understandings of the EU ‘as if’ it were constitutional in its own right. The nominal understanding refuses to answer the key question: ‘legitimate for what?’ (Lindseth 2012a). I am speaking here of the linkage between the nature of the legitimacy enjoyed by a legal or political order (legal, technocratic, functional, or robustly democratic and constitutional) and the scope of power that the legal order can then successfully exercise. We can call this the power-legitimacy nexus, which underlies all delegation constraints in modern administrative governance. This nexus focuses our attention on what kind of legitimacy is necessary for what kind of power, and in turn how this reciprocal relationship determines the type of law that results. The EU legal order clearly enjoys a legal, technocratic and functional legitimacy sufficient to support autonomous regulatory power and law of a uniquely powerful supranational type. This is certainly the case with regard both to the EU’s ‘pre13

  See Eriksson 2016.

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The EU as ‘administrative’ and ‘constitutional’  687 commitment’ function as well as its efforts to protect fundamental rights in the process of integration (recalling that administrative adjudicators can be forthright interpreters and enforcers of rights, as the historical experience with the French Conseil d’Etat shows). But the EU’s regulatory legitimacy simply does not compare with the socio-historical, demos-based legitimacy that supports compulsory powers in national constitutional law to amass fiscal and human resources for public purposes. Given the absence of these powers at the EU level, the ECJ’s purported ­‘constitutionalizing’ case-law should be understood in a new light. It takes on the character of what Tuori calls ‘parasitic’ legitimacy, characterized by the attempt to mobilize ‘the sheer legitimating force of constitutional rhetoric’ (Tuori 2015, 35–6). As Tuori himself acknowledges (with a nod to Carl Schmitt), the normative salience of ‘constitutional concepts make them coveted objects in the power games of constitutional theory; hegemony over the definition of, say, “democracy” is a crucial stake in these games’ (Tuori 2015, 123, citing Schmitt 1996). The ECJ’s nominal, ‘as if’ constitutionalism has been ‘parasitic’ in this sense, with the result being ‘a kind of Napoleonic self-coronation’ on the part of the Court (Tuori 2015, 137). This in turn has led simply ‘to a gouvernement des juges (or des experts), justified by claims to substantive legitimacy . . . or outputbased expert legitimacy’ (Tuori 2015, 172). This constitutionalized juristocratic and technocratic ascendance has had profound implications for constitutional democracy on the national level, particularly in the context of the Eurozone crisis. Rather than operating as pre-commitment agents, supranational bodies appear to take on the character of principals in the integration process, supervising the conduct of Member States as their agents. The core concept of EU supremacy that is so central to nominal ‘as if’ European constitutionalism takes on a harsher political valence in these circumstances: Just as supremacy traditionally ‘extends to national legislatures’ (Tuori 2015, 204), it now also extends to the electorates of the Member States themselves, in an ultimate principal-agent inversion. As the former Greek finance minister Yanis Varoufakis famously reported of his meetings with the Eurogroup in 2015, the German finance minister Wolfgang Schäuble made clear that ‘we can’t possibly allow an election to change anything. Because we have elections all the time, there are 19 of us, if every time there was an election and something changed, the contracts between us wouldn’t mean anything’ (Varoufakis 2015). The message was clear: the functional demand for uniformity and effectiveness—core principles of ‘as if’ EU constitutionalism (Lindseth 2016)—necessarily prevailed over national democratic and constitutional legitimacy in the Eurozone crisis. Similarly, Jean-Claude Juncker, the Commission President, famously proclaimed in response to the Syriza election victory in Greece in January 2015: ‘Il ne peut y avoir de choix démocratique contre les traités ­européens’—‘There can be no democratic choice against the European treaties’ (Mevel 2015). It is precisely this ‘constitutionalist pretense’ in its most extreme form (see Lindseth 1999, 736) that the administrative perspective on EU governance has sought to combat from its very first articulation. Without the socio-historical underpinnings of demosbased legitimacy: all we are left with, from the standpoint of popular perception, is a technocratic [and ­juristocratic] body . . . with an attenuated relationship to the perceived ultimate source of

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688  Comparative administrative law the agency’s ­normative powers: the participating states severally as representatives of their ­‘sovereign’ peoples. The temptation to ignore this attenuated relationship . . . simply lays the groundwork for  serious, on-going democratic-legitimacy problems in supranational bodies (Lindseth 1999, 736).

Given the persistent legitimacy concerns that the multiple crises in the EU have recently revealed, maybe it is time to rethink the nominal ‘as if’ constitutionalism of the ECJ. Perhaps we should regard it as an ‘infant disease’ à la Pierre Pescatore (1983), albeit with much different consequences than what Pescatore, a nominal constitutionalist par ­excellence, actually intended. I turn to this question in the following section.

3. THE ADMINISTRATIVE CHARACTER OF THE EU AS A TALE OF TWO CASES: ESMA AND GAUWEILER (BY WAY OF CHEVRON AND MEAD) The ECJ’s ESMA judgment in 2014, responding to the UK’s challenge to the expanding powers of the European Securities and Markets Authority (ESMA) in the global financial crisis,14 has rightly garnered considerable attention in this volume (see, in particular, the chapters by Mendes; Ruffert; and Saurer). The ESMA dispute does indeed provide a nice window on the evolution of EU public law with regard to the transfer of regulatory power to EU agencies. But the Court’s judgment, along with the opinion of Advocate General Jääskinen,15 are also reflective of the important role that nominal constitutionalism plays in EU legal discourse. The UK’s challenge arose out of a 2012 regulation empowering ESMA to issue rules banning short-selling.16 The UK asserted that this empowerment violated the prohibition famously set out in the Court’s judgment in Meroni,17 which prohibits EU author­ ities (e.g., the Commission) from sub-delegating their authority to other entities. As AG Jääskinen noted, however, ‘the EU legislature is not acting as a “delegating authority” in the sense of the Meroni judgment when it confers implementing powers on institutions, agents, or other bodies of the Union, but a constitutional actor exercising its own legislative competence, as conferred on it by the higher constitutional charter, i.e. the Lisbon Treaty.’18 From this strongly nominal constitutionalist perspective, the question was one of the ‘constitutional’ limits on ‘legislative’ delegation, precisely as one would find in any modern administrative state. In upholding the delegation of power to ban short-selling, the Court quite typically stressed the functional demands of technocratic expertise, the existence of legislatively-defined (if capacious) limits on the agency’s discretion, as well as the procedural recourse to judicial review—all aspects of the decision that my colleagues

  Case C-270/12, United Kingdom v. European Parliament and Council (ESMA), EU:C:2014:18.   Opinion of AG Jääskinen in Case C-270/12, United Kingdom v. European Parliament and Council (ESMA), EU:C:2013:562. 16   Regulation 236/2012/EU of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps, O. J. 2012, L 86/1. 17   Case 9/56, Meroni v High Authority [1957 and 1958] E.C.R. 133. 18   Opinion of AG Jääskinen in Case C-270/12, supra note 15, at para. 91. 14 15

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The EU as ‘administrative’ and ‘constitutional’  689 have analyzed elsewhere in this volume from the perspective of comparative administrative law (again, see Mendes; Ruffert; and Saurer). Violation of delegation constraints, however, was not the UK’s only claim in ESMA. The UK also challenged the ‘legal basis’ of the short-selling regulation, which, for our purposes, means simply that the UK asserted that the Council—i.e., the section of the EU ‘legislature’ composed of Member State ministers—should have proceeded by unan­ imity, thus preserving the UK’s right of veto. The UK lost the argument in the face of what Matthias Ruffert (this volume) rightly calls the ECJ’s ‘quite lenient’ approach to the question of legal basis. The Court found that Article 114 of the Treaty on the Functioning of the European Union (TFEU)—which authorizes the Council to proceed by qualifiedmajority voting (QMV) and also provides for extensive ‘co-legislative’ rights for the EP— was the correct legal basis because the regulation constituted a harmonization rule for the internal market within the scope of Article 114. The UK, in this instance supported rather vigorously by AG Jääskinen, argued that this basis was not appropriate because, in the words of the AG, the purpose of the regulation was ‘not harmonisation, or the adoption of uniform practice at the level of the Member States, but the replacement of national decision making . . . with EU level decision making.’19 In AG Jääskinen’s view, the EU was abusing Article 114 for the purpose of supranational empowerment at the expense of national authority, thus acting ultra vires. To grant the EU powers for this purpose, the only possible basis was the EU’s reserve rulemaking provision—Article 352 TFEU— which allows for the adoption of rules where ‘the Treaties have not provided the necessary powers,’ and only if the purpose is ‘to attain one of the objectives set out in the Treaties’ (in this case risk reduction in the securities markets). Article 352, however, mandates that the Council proceed by unanimity and provides for a more limited role for the EP. The legal basis dispute in ESMA thus presented a direct clash between national prerogatives and the functional demands for EU action in a moment of crisis—precisely the sort of situation in which the administrative perspective starkly contrasts with the nominal constitutionalism of the ECJ (see, e.g., Lindseth 1999, 723–6). Where more than one treaty provision might serve as the legal basis for a piece of EU legislation, the constitutionalist approach has traditionally favored the provision maximizing the EP’s role (in this case again Article 114) on the theory that the EP embodies the ­‘fundamental democratic principle that the peoples [of Europe] should take part in the exercise of power through the intermediary of a representative assembly.’20 Although the ECJ did not advance that precise argument to bolster its holding in ESMA, commentators have noted that opting for Article 114 had the effect of ‘further democratiz[ing] the EU legislative process’ because that provision entails ‘a significant boost for the European Parliament as organizational co-legislator of the EU’ (Saurer, this volume). The problem with this claim is that it confuses the EP’s electoral legitimacy with robust demos-based legitimacy in a socio-historical sense,21 thus ignoring the superior claims of national institutions along this crucial dimension (Lindseth 2012b). Leaving aside whatever may be the EU’s   Ibid., at para. 52.   See, e.g., Case C-300/89, Commission v. Council, 1991 E.C.R. I-2867, I-2900, [Titanium Dioxide Waste] (tracking language first used in case 138/79, SA Roquette Frères v. Council, 1980 E.C.R. 3333, 3360). 21   See note 2 above and accompanying text. 19 20

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690  Comparative administrative law ­ emocratic claims in the future, AG Jääskinen argued vigorously in favor of Article 352 d as the appropriate legal basis precisely on democratic legitimacy grounds. In his words, Article 352(2) TFEU now requires ‘the Commission to bring proposals based on that article to the attention of national parliaments. Recourse to Article 352 TFEU as the legal basis . . . would have thus opened up an important channel for enhanced democratic input.’22 How should these competing democracy claims affect the interpretive approach in this case? ESMA and indeed all legal basis disputes in EU law present us with a question of how to interpret enabling legislation, i.e., the EU treaties. Even if the ECJ is an ‘administrative’ adjudicator, operating at a level of governance that is of a fundamentally administrative character for the reasons set out above, it must still take this allocation of democratic and constitutional legitimacy into account in its own treaty interpretations. It cannot ignore this allocation and proceed ‘as if’ it and the EU ‘legislature’ are of a constitutional character. To an American legal scholar (like this writer), the famous ‘two-step’ analysis defined by the US Supreme Court in Chevron23 unavoidably comes to mind as the framework to deal with such interpretive challenges in the administrative context. If we were to apply a version of Chevron to ESMA, where might this exercise in comparative administrative law lead us? This idea is less far-fetched than it might initially appear, precisely because the democratic legitimacy concerns that animate Chevron can also help us address the legal basis dispute in ESMA. Nor should we assume that Chevron will somehow automatically lead to judicial deference to the interpretation advanced by the ‘agency’ (i.e., the EU). Rather, Chevron mandates deference only to ‘reasonable’ interpretations by the agency in the shadow of democratically-legitimizing oversight, and only after a finding of ambiguity. Behind the question of reasonableness is the foundational canon of construction that US lawyers call ‘constitutional avoidance’: When faced with two possible interpretations of enabling legislation—one that is constitutionally problematic and another that avoids those constitutional concerns—a US adjudicator (judicial or administrative) should avoid the constitutionally problematic interpretation unless there was clear evidence that the legislature clearly intended the former.24 In this case, if we approach the question of democratic legitimacy from the socio-historical perspective, then the democracy claim raised by AG Jääskinen tips rather decisively in favor of Article 352 TFEU. Indeed, 22 23

  Opinion of AG Jääskinen in Case C-270/12, supra note 15, at para. 58.   Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842–43 (1984):

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. 24   See, most famously, Industrial Union Dep’t, AFL-CIO v. American Petroleum Inst., 448 U.S. 607, 645 (1980) (plurality) (‘In the absence of a clear mandate in the Act, it is unreasonable to assume that Congress intended to give the Secretary the unprecedented power over American industry that would result from the Government’s view’ of the statute).

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The EU as ‘administrative’ and ‘constitutional’  691 this bolsters Jääskinen’s main argument—essentially tracking Chevron Step One—that the short-selling regulation fell outside the unambiguous intent of the treaty drafters expressed in the clear text of Article 114. This limited that provision to harmonization measures for the internal market, something that the short-selling regulation clearly was not.25 But even if we disagree with AG Jääskinen on this point and conclude that the scope of Article 114 was ambiguous, we should also recognize that Chevron’s demand for deference is itself built on a whole series of democratic legitimacy concerns that still favor Article 352 as the legal basis. The first Chevron concern reflects a cautious understanding of the nature of judicial power in a democratic system: Courts should avoid adopting a ‘static judicial’ interpretation—i.e., one that effectively converts judges into the ultim­ate interpretive principals—unless the enabling legislation itself ‘commanded’ that ­interpretation.26 Even if, in resolving interpretive disputes, judges ‘must, in some cases, reconcile competing political interests,’ they must never do so on the basis of the their own ‘personal policy preferences.’27 In other words, out of a concern to avoid a gouvernement des juges, courts should be cautious about exercising ultimate interpretive power as to the meaning of enabling legislation—something the ECJ, under the nominal constitutional approach vis-à-vis the EU treaties, most emphatically does (see, e.g., Davies 2016). In this regard, the ECJ’s resolution of the legal basis dispute in ESMA is simply a further example of the Court’s self-understanding as the ultimate interpretive principal in EU law. The second Chevron concern is that, because judges are famously ‘not experts in the field,’ they should defer to ‘those with great expertise and charged with responsibility for administering the provision’ in question.28 Although this technocratic rationale might suggest deference to the Commission’s choice of legal basis in this instance (Article 114), we should recall the crucial qualifier added by the US Supreme Court in its 2001 decision in Mead.29 There the Court recognized that the technocratic rationale becomes increasingly tenuous the further one gets from the constitutional principal that serves as the ultimate source of robust democratic legitimacy in the system.30 Certainly the shift in regulatory power beyond the confines of the state, as well as the diminished capacity of individual Member States to enforce their preferences against the EU’s supranational ‘precommitment’ institutions, implicates this concern over diffusion and distance. This factor should lead to an interpretive presumption in favor of national institutions and against the EU qua supranational administrative agency, in order to restrict the scope of the ­latter’s normative autonomy as regulatory power moves away from the more democratically legitimate Member States (for more detail, see Lindseth 1999, 699–726). The third and ultimate concern underlying Chevron deference also decisively favors Article 352. This concern relates to what I have previously called ‘the normative y­ earning

  Supra note 19 and accompanying text.   Chevron, 467 U.S. at 842. 27   Id. at 865. 28  Id. 29   United States v. Mead Corp., 533 U.S. 218 (2001). 30   Id. at 233 (noting that ‘[a]ny suggestion’ that Chevron deference is appropriate for customs rulings ‘being churned out at a rate of 10,000 a year at an agency’s 46 scattered offices is simply self-refuting’). 25 26

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692  Comparative administrative law for legitimate political control’ in a diffused and fragmented system of administrative governance (Lindseth 1999, 693–8). As the Chevron court famously concluded, judges should defer to agency interpretations because, even if ‘agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices.’31 As US administrative law scholar Cynthia Farina has described, the Chevron court’s implicit message is that ­‘[d]­eference is right not because it yields better answers, more efficient answers, or even the answers Congress would have wanted’—the role of Chevron Step One—‘but because it yields more legitimate answers’—the role of Step Two. ‘The Chevron mystique flows from this promise that the ordinary act of statutory interpretation can advance the larger process of reconciling agencies with constitutional democracy’ (Farina 1997, 183). Where, as in the ESMA case, an agency’s interpretation reduces rather than increases control by a democratically accountable principal, this legitimating justification for administrative deference no longer applies. As I always stress to my students, administrative law is fundamentally about democracy (perhaps because I am a former student of Cynthia Farina). The ultimate purpose of administrative law is to ensure ‘the continuing vitality of the principal-agent relationship between the people and government’ (Pierce 1989, 1240), a task that becomes even more challenging as normative power diffuses beyond the confines of the state. Meeting this challenge requires administrative procedures and judicial doctrines that seek to ‘maintain[] the connection between each of the [constitutional] institutions and the paradigmatic function which it alone is empowered to serve, while also retaining a grasp on [administrative governance] as a whole that respects our commitments to the control of law’ (Strauss 1987, 488). Thus, as regulatory power diffuses beyond the confines of the state, the key question becomes: How might we use—to borrow Cynthia Farina’s phrasing—‘the ordinary act’ of treaty interpretation (i.e., enabling legislation for a ­ vastly powerful supranational ‘agency’) to reconcile EU governance ‘with constitutional ­democracy,’ which, from the socio-historical perspective, is still located nationally? Here is where the nominal ‘as if’ constitutionalism of the ECJ fails fundamentally, through judicial review doctrines that presume—without the requisite socio-historical or even formal-legal foundations—that the EU enjoys an autonomous democratic and constitutional legitimacy of its own. The EU is in fact really just ‘a supranational administrative agency,’ albeit one with extensive rulemaking, enforcement, and adjudicative powers, but still one ‘with an attenuated relationship to the perceived ultimate source of the agency’s normative powers: the participating states severally as representatives of their “sovereign” peoples’ (Lindseth 1999, 736). This reality necessitates a fundamental rethinking of several key judicial doctrines—not merely the ‘quite lenient’ approach to legal basis of the type we saw in ESMA, but also the judicial formulation of other key doctrines like subsidiarity and supremacy. Let me begin with subsidiarity. For unfamiliar readers, subsidiarity was introduced into the European treaties as a general principle in the early 1990s as a means of keeping decision-making at the lowest possible level, thus helping to overcome the EU’s famous ‘democratic deficit.’ But the judicial and political development of the subsidiarity prin31

  Chevron, 467 U.S. at 865.

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The EU as ‘administrative’ and ‘constitutional’  693 ciple have since markedly diverged from one another (Lindseth 2010, 191–202). The introduction of subsidiarity implied that EU decision-makers, in determining the most appropriate level of regulation (national versus supranational), were under an obligation of reasoned decision-making analogous to what US courts impose on administrative agencies under the ‘hard look doctrine.’32 But over the course of the 1990s and early 2000s the ECJ’s treatment of subsidiarity’s decisional demands proved extraordinarily deferential, to put it mildly.33 Reflecting its fundamentally constitutionalist mindset, the ECJ sought to avoid placing any significant evidentiary or reasonableness burdens on the EU’s ‘legislature.’34 As a consequence, it was left to the Member States, by way of treaty protocols,35 to specify politically what Europe’s supranational judges would not do by way of case-law: that in order to satisfy the requirements of subsidiarity, EU institutions would, among other things, need to assemble an evidentiary record demonstrating why supranational rulemaking was required in the particular case. Over the last decade and a half, a detailed procedural system has emerged in the EU where each major policy initiative from the Commission must include a consultation with stakeholders, an analysis of the measure’s expected impact, and a justification of action at the EU level in accordance with the principles of subsidiarity and proportionality. At the summit of these procedures is the socalled subsidiarity ‘early-warning mechanism’ (EWM), inserted into EU law under the Treaty of Lisbon of 2009, providing national parliaments with the opportunity to offer objections to Commission proposals before the regulation or directive is adopted by the EU’s ‘legislature’ (Council and EP). Beyond improving participation and transparency in the EU’s centralized rulemaking process, these procedures also work to reduce information costs and thereby give traditional democratic and constitutional principals on the national level—NPs—the ability more effectively to oversee, if not necessarily control, their increasingly far-flung supranational regulatory agents. Beyond subsidiarity, however, the administrative character of the EU requires significant revision to the claim of EU law ‘supremacy’ over national law in cases of conflict. There are obviously sound functional reasons for some form of EU legal prevalence, at least in order to achieve some measure of uniformity and effectiveness of EU law across national borders. Indeed, if EU institutions are to serve as ‘pre-commitment’

  See, e.g., Motor Vehicle Mfr. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983).   See, e.g., Case C-84/94, United Kingdom v. Council, 1996 E.C.R. I-5755 (Working Time Directive); Case C-233/94, Germany v. Parliament and Council, 1997 E.C.R. I-2405 (DepositGuarantee Schemes); and Case C-491/01, R. v. Secretary of State ex parte BAT and Imperial Tobacco, 2002 E.C.R. I-11543. 34   According to the ECJ, ‘it would be pointless to require [the legislature to provide] a specific statement of reasons for each of the technical choices made by it.’ Working Time Directive, 1996 E.C.R. at I-5816, para. 79. This compares, in effect, to the sort of deference the US Supreme Court gives Congress under the rational-basis test. See, e.g., United States R.R. Retirement Bd. v. Fritz, 449 U.S. 166, 179 (1980) (‘[w]here, as here, there are plausible reasons for Congress’ action, our inquiry is at an end . . ..[T]his Court has never insisted that a legislative body articulate its reasons for enacting a statute’). 35   See, e.g., Protocol (No. 1) on the Role of National Parliaments in the European Union, 2008 O.J. (C 115) 203; Protocol (No. 2) on the Application of the Principles of Subsidiarity and Proportionality, 2008 O.J. (C 115) 206. 32 33

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694  Comparative administrative law ­ echanisms to prevent ‘principal drift,’ this implies some measure of legal primacy over m the rights of the Member States.36 But we should not confuse these functionalist claims to primacy with a robust claim to ‘supremacy’ in a constitutional sense, ‘as if’ the EU is a ‘federal’ government with a constitutional legitimacy of its own. The problem with the nominal constitutionalist mindset is that it is marked by precisely this confusion (see, e.g., Halberstam 2015).37 The administrative perspective rejects this move explicitly. While EU administravists recognize the functional demands of integration, they also recognize that these demands must always be balanced against the need to preserve some semblance of democratic and constitutional self-government on the national level. This administrative approach finds resonance in the European jurisprudence of the German Federal Constitutional Court, particularly in its attempt to balance the so-called Demokratieprinzip on the national level against Germany’s Europarechtsfreundlichkeit, or constitutional ‘openness to European law’ (Lindseth 2010, Ch 4; Lindseth 2014, 553–5). The German Demokratieprinzip, in both its substantive and procedural dimensions, reflects the importance of what I have called elsewhere ‘resistance norms’ in the process of European integration (Lindseth 2010, 47–8, drawing from Young 2000). These norms may be understood as an effort to translate the spirit of ‘constitutional avoidance’ into the language of EU public law in a way that both accounts for the socio-historical claims of national democracy and constitutionalism while nonetheless acknowledging the functional demands of integration. For purposes of this chapter, I will limit my discussion to the German Constitutional Court’s most recent statement on the need for nationalsupranational balancing: the Gauweiler judgment of June 2016.38 Gauweiler arose out of a challenge to German participation in the ECB’s proposed emergency program to purchase government bonds—the so-called ‘outright monetary transactions’ (OMT) program. The plaintiffs asserted that OMT, if ever implemented, would both breach the power delegated to the ECB under the treaties and also violate the German constitution. Following a procedure announced in an earlier case,39 the German Constitutional Court made a preliminary reference to the ECJ on the interpretation of EU law but reserved the right to determine whether, on the basis of that interpretation, the EU was in ‘manifest’ breach of the limits of power delegated under the treaty. In effect, the German court’s approach acknowledged the interpretive primacy of the ECJ in the first instance, qua ‘pre-commitment’ mechanism. The preliminary reference reflected, in some sense, the need to ‘exhaust administrative remedies’ while also perhaps suggesting a Chevron­-tinged understanding of national judges as ‘not experts in the field’ of European integration, thus warranting some deference. The reservation of the ultimate determination, however, reflected the importance of nationally mediated democratic and constitutional legitimacy in the EU system, even if the court would decide under a highly

  See supra notes 10–11 and accompanying text.   For a thoughtful critique of the functionalist underpinnings of the Court’s constitutionalist approach, see Isiksel 2016. 38   Gauweiler, BVerfG, 2 BvR 2728/13 (June 21, 2016) . 39  See Honeywell, BVerfG, BvR 2661/06 (July 6, 2010) . 36 37

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The EU as ‘administrative’ and ‘constitutional’  695 deferential ‘manifest’ breach standard in view of Germany’s Europarechtsfreundlichkeit (again, openness to European law). In issuing its Gauweiler judgment, the German court did indeed defer to the ECJ’s determination that the program would not, if implemented, violate the ECB’s powers under the treaties. The Constitutional Court implied that, in its view, the program may well have been ultra vires, just not ‘manifestly’ so,40 and that any actual implementation of OMT in the future would require continued monitoring by all German constitutional bodies, legislative, executive, and judicial (again, mediated legitimacy). In setting out its ruling, the German court made clear that it was deeply critical of the ECJ’s deferential approach to the ECB’s determinations of the relevant facts, the ECJ’s relaxed interpretation of the limits on the ECB’s powers under the treaties, as well as the nature of the Court’s review of the ECB’s mandate.41 From the German court’s perspective (in perhaps an echo of Mead’s concerns about regulatory diffusion), the German court stressed that the shift in normative power to the ECB, including an unprecedented degree of independence guaranteed under the treaties, created a ‘noticeable conflict with the principles of democracy and the sovereignty of the people’ on the national level.42 Consequently, this ‘limitation on the democratic legitimation emanating from the [national] electorate’ required the ECB’s powers to ‘be interpreted restrictively and that its observance be subject to strict judicial review.’43 The German court implied that it would be more demanding of the ECJ in the future, if faced with a more ‘manifest’ breach of the limits of EU authority or an action that more squarely raises issues of the ‘constitutional identity’ of the German system. The Gauweiler judgment also reiterated at numerous junctures—consistent with the administrative approach—that the EU was not an autonomously democratic and constitutional level of governance but rather derived whatever legitimacy it possessed from the national level.44 The German court further stressed that the ‘large majority of constitutional and supreme courts of the other Member States’ shared this understanding of the foundations of EU governance.45 The German court recognized a basic element that the administrative perspective also has previously stressed (Lindseth 2010, 152–87): that EU law, as long as it remains within the bounds of its delegated power, is entitled only to ‘strong deference’ but not supremacy. Such deference is necessarily subject to limits derived from the imperative to preserve national forms of constitutional democracy in a recognizable sense.

4. CONCLUSION The German Constitutional Court in Gauweiler was, in effect, pursuing a strategy similar to that pursued by the US Supreme Court in Chevron (as glossed by Cynthia Farina):     42   43   44   45   40 41

Gauweiler, supra note 38, para. 190. Id. at paras 181–189. Id. at para. 188. Id. at para. 189. See, e.g., id. at paras. 131, 140, 142, and 144. Id. at para. 142 (surveying the case law).

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696  Comparative administrative law through the definition of judicial review doctrines, Germany’s high court judges were seeking to reconcile EU power—i.e., a novel form of supranational administrative ­governance—with the continued existence of ‘constitutional democracy’ on the national level. That is the very essence of the administrative law project, only now shifted beyond the confines of the state. From its earlier articulation (Lindseth 1999), the administrative perspective on the EU has been trying to ‘come to terms’ legally and socio-historically with tensions that inhere in any form of governance beyond the nation-state. A year after my initial effort, Dani Rodrik (2000) conceptualized these tensions from an economist’s perspective, in what he now calls the ‘Globalization Trilemma.’ This model holds that democracy is only compatible with global economic integration if democracy can be supra­ nationalized as well; otherwise, the form of governance that results will be experienced as fundamentally technocratic and the negation of democracy on the national level (see, for example, Rodrik 2016). This is the reality that the administrative perspective has always sought to address, whether in the EU or elsewhere. As I wrote in 1999: ‘National specialists in administrative law must now join the broader scholarly debate over the proper means of legitimizing and controlling supranational normative power, not just in the [EU] but in other international organizations as well’ (Lindseth 1999, 738). Rather than indulging in an ‘as if’ nominal constitutionalism, we should confront the EU as it actually is. Unless and until democracy and constitutionalism are supranationalized in the EU in socio-historical terms, this new form of governance will persist as a gouvernement des juges and des experts. It is up to administrative law to adjust its judicial doctrines accordingly, to address this ‘new dimension to an old problem’ (Lindseth 1999, 630)—the separation of regulatory power from its robust sources of democratic and constitutional legitimacy on the national level.

REFERENCES Ackerman, Bruce A. (1991), We the People: Foundations. Cambridge, Mass.: Harvard University Press. Braibant, G. (1993), ‘Du simple au complexe, Quarante ans de droit administratif (1953–1993),’ Etudes et Documents du Conseil d’Etat 45, 409–20. Davies, G. (2016), ‘The European Union Legislature as an Agent of the European Court of Justice,’ Journal of Common Market Studies, January, 1–16. Eriksson, A. (2016), ‘Spain and Portugal Avoid Fines, Get New Fiscal Targets,’ EUObserver, August 10, https:// euobserver.com/economic/134614, accessed 21 September 2016. Farina, C.R. (1997), ‘The “Chief Executive” and the Quiet Constitutional Revolution,’ Administrative Law Review 49(1), 179–86. Halberstam, D. (2015), ‘“It’s the Autonomy, Stupid!” A Modest Defense of Opinion 2/13 on EU Accession to the ECHR, and the Way Forward,’ German Law Journal 16(1), 105–46. Isiksel, Turkuler (2016), Europe’s Functional Constitution: A Theory of Constitutionalism Beyond the State. Oxford and New York: Oxford University Press. Landis, James (1938), The Administrative Process. New Haven, CT: Yale University Press. Lindseth, P.L. (1999), ‘Democratic Legitimacy and the Administrative Character of Supranationalism: The Example of the European Community,’ Columbia Law Review 99(3), 628–738. Lindseth, P.L (2004), ‘The Paradox of Parliamentary Supremacy: Delegation, Democracy, and Dictatorship in Germany and France, 1920s-1950s,’ The Yale Law Journal 113(7), 1341–415. Lindseth, P.L. (2006), ‘Agents Without Principals?: Delegation in an Age of Diffuse and Fragmented Governance,’ In Fabrizio Cafaggi et al. (eds) Reframing Self-Regulation in European Private Law, The Netherlands: Kluwer Law International.

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The EU as ‘administrative’ and ‘constitutional’  697 Lindseth, Peter L. (2010), Power and Legitimacy: Reconciling Europe and the Nation-State. Oxford and New York: Oxford University Press. Lindseth, P.L. (2012a), ‘Author’s Reply: “Outstripping”, or the Question of “Legitimate for What?” In EU Governance,’ European Constitutional Law Review 8 (1), 153–64. Lindseth, P.L. (2012b), ‘Of the People: Democracy, the Eurozone, and Lincoln’s Threshold Criterion,’ Berlin Journal, 22, 4–7. Lindseth, P.L. (2012c), ‘Understanding the German Constitutional Fault Lines in the Eurozone Crisis: Der Spiegel’s Interview with Udo Di Fabio,’ EUtopialaw January 12, http://eutopialaw.com/2012/01/12/understanding-the-german-constitutional-fault-lines-in-the-eurozone-crisis-der-spiegels-interview-with-udo-difabio/, accessed 21 September 2016. Lindseth, P.L. (2014), ‘Equilibrium, Demoi-cracy, and Delegation in the Crisis of European Integration,’ German Law Journal 15(4), 529–67. Lindseth, P.L. (2015), ‘Transatlantic Functionalism: New Deal Models and European Integration,’ Critical Analysis of Law 2(1), 83–105. Lindseth, P.L. (2016), ‘The Perils of “As If ” European Constitutionalism,’ European Law Journal 22(5), 696–718. Lindseth, P.L. (2017), ‘Between the “Real” and the “Right”: Explorations Along the Institutional-Constitutional Frontier,’ In Constitutionalism and the Rule of Law: Bridging Idealism and Realism, Maurice Adams, Ernst Hirsch Ballin, and Anne Meuwese (eds), Cambridge, UK: Cambridge University Press. Lindseth, P.L. et al. (2008), Administrative Law of the European Union: Oversight, George A. Bermann et al. (eds), Chicago, IL: ABA Publishing. Loughlin, M. (2005), ‘The Functionalist Style in Public Law,’ University of Toronto Law Journal 55(3), 361–404. Majone, G. (1998), ‘Europe’s “Democratic Deficit”: The Question of Standards,’ European Law Journal 4(1), 5–28. Majone, G. 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(2012), “The Idea of European Demoicracy,” in Julie Dickson and Pavlos Eleftheriadis (eds), Philosophical Foundations of European Union Law, Oxford: Oxford University Press, pp. 247–74. Pescatore, P. (1983), ‘The Doctrine of Direct Effect: An Infant Disease of Community Law,’ European Law Review 8, 155–77. Philip, André (1951), The Schuman Plan: Nucleus of a European Community. European Movement. Pierce, R.J. (1989), ‘The Role of the Judiciary in Implementing an Agency Theory of Government,’ New York University Law Review 64, 1239–85. Rodrik, D. (2000), ‘How Far Will International Economic Integration Go?’ Journal of Economic Perspectives 14(1), 177–86. Rodrik, D. (2016), ‘Brexit and the Globalization Trilemma,’ Dani Rodrik’s Weblog June 13, http://rodrik.typepad. com/dani_rodriks_weblog/2016/06/brexit-and-the-globalization-trilemma.html, accessed 21 September 2016. Rubenfeld, Jed (2001), Freedom and Time: A Theory of Constitutional Self-Government, New Haven: Yale University Press. Rubin, E.L. (1989), ‘Law and Legislation in the Administrative State,’ Columbia Law Review 89(3), 369–426. Schmitt, Carl. (1996), The Concept of the Political. Chicago: University of Chicago Press. Sheehan, J.J. (2006), ‘Presidential Address: The Problem of Sovereignty in European History,’ American Historical Review 111(1), 1–15. Strauss, P.L. (1987), ‘Formal and Functional Approaches to Separation-of-Powers Questions—A Foolish Inconsistency?,’ Cornell Law Review 72(3), 488–526. Strauss, P.L. (2007), ‘Forward: Overseer, or “the Decider”? The President in Administrative Law,’ George Washington Law Review 75 (4), 696–760. Thatcher, M., and A. Stone Sweet (2002), ‘Theory and Practice of Delegation in Non-Majoritarian Institutions,’ West European Politics 25(1), 1–22. Thimann, C. (2015), ‘The Microeconomic Dimensions of the Eurozone Crisis and Why European Politics Cannot Solve Them,’ Journal of Economic Perspectives 29(3), 141–64. Tuori, Kaarlo. (2015), European Constitutionalism. 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698  Comparative administrative law Weiler, J.H.H. (1991), ‘The Transformation of Europe,’ Yale Law Journal 100, 2403–83. Willis, J. (1935), ‘Three Approaches to Administrative Law: The Judicial, the Conceptual, and the Functional,’ University of Toronto Law Journal 1, 53–81. Young, E.A. (2000), ‘Constitutional Avoidance, Resistance Norms, and the Preservation of Judicial Review,’ Texas Law Review 78, 1549–614.

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Index accountability administrative agencies/institutions EU, in 246–7 hybrid institutions 584 India, in 222–3, 229–31 administrative independence Canada, in 160–61 United States, in 239–40 contracting out 558–9 expertise, conflicts expert reviews of experts 462 public participation, and 371–83 UK Competition Appeals Tribunal cases 468–75 Importance 251 military and security contractors 567–8, 574 models 253–4 New Public Management 359–61 United States, in public participation vs. expertise 371–4, 383 reason-giving 268–72, 278–80 administrative agencies/institutions, generally see also administrative independence; Regulatory Oversight Bodies constitutional controls 67 controls mechanisms 67, 143 endurance 65–6 functions 159, 282 instrumental rationality 142–3 legal norms, distinction from 65–6 legitimacy 147 principal/agent relationships 143–6 private rights protection, and 112 procedural requirements 112–13 public interest standards 143 Administrative Burden Reduction program (EU) 342 administrative courts constitutional controls 67–8 establishment 64 France, in 64, 435 Germany, in 64 historical development 435 Hungary, in 125–6 Italy, in 104–5, 110 role of 64

Taiwan, in 207–8, 479, 482–5, 488–9, 493–4 US, in 141–2 administrative discretion Canada, in 160–61 comparative perspectives 641–2 bounded discretion 644–7 construct of law, as 642–3 contextual influences 643–4 EU, in authority for 627–8, 633–7, 675 bounded discretion 646–7 development 627–8 ESMA ruling 633–7, 645, 688–91 judicial review 635–9 Meroni doctrine 620, 627, 634–6, 673–4, 688 political vs. technical interpretations 633–5 Tetra Laval standard 636 wide vs. clearly defined powers 633–7 France, in 637–9 Germany, in 639–41 Hungary, in 130 Italy, in 105, 109, 640–41 US, in 58 administrative independence see also separation of powers Australia, in 174–5 autonomy, and 143, 146, 155–6 Canada, in 159–70, 165–9, 178–9 capacity-building 211–12 constitutional values, and 147 cultural influences 213 definition 139, 145–6 France, in 139–40, 151–5 Germany, in 139, 144–5, 150–51, 154–5 impartiality, and 251 judicial independence 175 justifications for 155–6 leadership, and 212 political influences 159–70, 178–9, 212–13 political interference 159, 166 positive political theory capacity-building 211–13 control model 210–11 neutrality and impartiality 211–12 political insurance model 211 social need, and 212 trust model 210–11

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700  Comparative administrative law role of, generally 139, 156, 159–60 US, in 139, 148–9, 154–5 Congressional oversight 48, 53–5, 338 Interstate Commerce Commission 103, 148–9, 234–40 Presidential powers 41–2 administrative law, generally constitutional law, and administrative agencies 67, 142–6 administrative courts 67–8 administrative functions, constitutional treatment 65–8 choice, implications of 140–42 differences 60–62 ECJ role 683–5, 687–96 endurance 65–6 EU conflicts 623–4, 670–77, 681–3 France, in 284 localism, and 62–4, 66 overlap 60–62, 69, 586–7 public service controls 67 structural flexibility 65–6 symbolic values 66 UK, in 28–9, 667 unwritten constitutions 68–9 written constitutions 65–8 constitutionalism, and 28–9, 142–7 development 23, 35, 352–3 Anglo-American 28–31 centralization 29 constitutionalism 28–9 convergence, and 62–4 delegated legislation 29 economic interventionism 32–3 financial bailouts, and 354 financial crisis, and 352–8, 367 France, in 23–6 ‘general’ legislation trends 363–4 Germany, in 26–35 global law emergence 116 governance trends 353–4 Industrial Revolution 29 interpretation conflicts 23 judicial review 25–6, 365 New Public Management, and 353, 358–9 ordinary law, role of 30–31, 107–8 Parliamentary Sovereignty 29–30 political freedom, limits on 26–8 political obligation, attitudes to 26 principle of legality, and 27–8 public spending policies, and 354–6 rights of individual 30–31 rule of law 28–35, 64 Russia, in 32 separation of powers 25–6

social reform impacts 24–5, 32–4 social welfare programs, and 355 state interventionism, and 31–5 strategy conflicts 354–6 trends 363–5 World War I/II 33–5 digital government, and 361–3 EU law influences 113–16 instrumental rationality, and 142–3 norm-creation role 319, 330–31 Americanization 330 challenges 330–31 EU, in 320–22 France, in 326–30 network pricing regulation, in 320–30 public consultation 319–30 study trends 319–20 Sweden, in 325–6 transparency 319–30 UK, in 322–5 organization theory, and 570 parliamentary vs. presidential systems 45–8 principal/agent relationships 143–6 theory vs. practice 142–6 vs. ordinary law 30–31, 107–8, 141 administrative law scholarship Germany, in background 85 challenges 85–6 constitutionalism 86–7 contextual influences 94–5 development 5–6, 86–7 EU and international law influences 90–91 exclusions 87–8 interdisciplinary influences 91–2, 95–7 juristic approach 87–9, 94–5 Neue Verwaltungsrechtswissenschaft approach 91–7 regulative law crisis 88–9 rights-based interpretation 86–7 rule of law, and 86–7 steering theory 5–6, 93–4 purpose, generally 96–7 Administrative Procedure Act of 1946 (US) 10, 34, 47, 71, 112, 141, 275–6, 279–80, 284, 335, 371, 567 administrative procedures, generally definitions 302–3 features collaborative governance 308–11, 315–16 command-and-control governance 307–8 proceduralization 308–9 quasi judicial design 307 quasi legislative style 307–8

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Index  701 functions defensive vs. collaborative 311, 314–15 governance outcomes 309–10 individual decision-making 313–15 integration 314–15 participation and collaboration 308–15 policy-making 311–12 rulemaking 311–13, 315–16, 612 historical development features 307–9 first generation 306–7, 309–12 law, relationship with 310–11 phases 306–11 second generation 306–13 third generation 306, 308–11, 313–16 influences on autarchic vs. heterarchical processes 304 ex officio investigation vs. shared information processing 304 implementation/enforcement processes vs. full policy cycle processes 305 influences on 303–6 law-applying vs. law-creating 303–4 legality protection policies vs. policy improvement strategies 305 public bodies vs. private party procedures 305–6 public power vs. public values 305 Algera and others v Common Assembly (EU) 656 Aman, Alfred 553 American School of Magnetic Healing v. McAnnulty (US) 271 Angelopharm GmbH v. Freie Hansestadt Hamburg (EU) 378 Anisminic Ltd v Foreign Compensation Commission (UK) 391 Appleby v. United Kingdom (EU) 521 Argentina 427–8, 430 Arnold v. Mundy (US) 519 Associated Provincial Picture Houses Ltd v. Wednesbury Corporation (UK) 78–9, 111, 410, 463–4 Aubry, Charles 424 Australia administrative independence 174–5, 611 administrative law 174–5 contracting out, statutory controls 560 judicial independence 174–5 judicial review framework 174 public power concentration 604 separation of powers 602 Ball v. Herbert (UK) 517 Barnhart v Walton (US) 398–9, 403

Bato Star Fishing v. Minister of Environmental Affairs (SA) 485–7, 490–91 Bell Canada v. Canadian Telephone Employees Assn (Can) 169 Ben-Atiyah v. Minister of Education, Culture & Sports (Isr) 407–8 Bernstein, Steven 590 Blundell v Catterall (UK) 517 Brazil administrative agencies/institutions appointments, influences on 185–6, 188–91 budgetary controls 183–5, 187–8 delegated powers, views on 193–4 funding sources 183–4 independence 182–93 legislative power restrictions 186–7, 191–2 presidential controls 183–92 regulatory state intervention trends 182–3, 192–6 US and EU influences on 181 constitution 67 presidential powers 181–2, 192–3 neoliberal reforms 193–4 Burkow, R.E. 212–13 Campbell and Fell v. UK (EctHR) 170–71 Canada administrative independence accountability, and 160–61 discretion, processes 160–61 judicial appointments 162–5, 173 judicial independence 161–5, 161–8 judicial interpretation 165–70 political interference 159–70, 178–9 separation of powers 166 Charter of Rights and Freedoms 589 judicial review 399–400, 402 non-state regulation, recognition 589–90 privatization 539 proportionality principle 410, 417 Cane, Peter 175 Carpenter, Daniel 319–20 central banks 40, 241 Chaoulli v. Attorney General of Quebec (Can) 539 Charter of Fundamental Rights (EU) 114–15, 624, 652, 676 Chevron USA v. Natural Resources Defense Council (US) 42, 56–7, 276, 394–9, 402–3, 449, 690–92 Chile 425, 430, 433 China, Republic of 67, 365, 411–12 CIN Properties Ltd v. Rawlings (UK) 521

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702  Comparative administrative law Citizens to Preserve Overton Park v. Volpe (US) 451 City of Arlington, Texas v FCC (US) 399 climate change 262–3 Colombia 428 comitology 375–6 Commission v. Tetra Laval (EU) 636 common law systems administrative independence 168–70 judicial review 111 negotiated regulation 108 ordinary court jurisdiction 141 political interference 159–60 Australia, in 174–5 Canada, in 159–70, 178–9 New Zealand, in 176–8 reasonableness, and 268–9 types of law 268–9 Commonwealth v. Davis (US) 520 Community Plant Variety Office 627 Constant, Benjamin 147 constitutional law, generally administrative law, and administrative agencies 67, 142–6 administrative courts 67–8 administrative functions 65–8 choice, implications of 140–42 coverage, generally 667 differences 60–62 ECJ role 683–5, 687–96 endurance 65–6 EU conflicts 623–4, 670–77, 681–3 Hungary, in 119–20 localism, and 62–4, 66 overlap 60–62, 69, 586–7 public service controls 67 structural flexibility 65–6 symbolic values 66 unwritten constitutions 68–9 written constitutions 61, 65–8 authority principle 685–6 Germany, in 628 Hungary, in 119–28, 131–5 legislative authority 685–6 Poland, in 478–82, 491–3 constitutionalism 61, 65, 142–7 EU, in 682–8 delegated legislation 688–96 ECJ role 683–5, 687–96 judicial interpretations 688–96 legal entrenchment, and 684–5 principal-agent relationships, and 684–5 subsidiarity principle 693–4 Germany, in 150–51, 667, 664–96 historical development 28–9

constitutions, generally convergence 62–4, 148 endurance 65 form and function 61 unwritten 68–9 written 61, 65–8 contracting out see privatization control model, PPT 210–11 Cooper v. UK (EctHR) 172 cost-benefit analysis 262 Costa Rica 425 Costa v. ENEL (EU) 624 Council for Civil Service Unions v Minister for the Civil Service (UK) 463 Craig, Paul 413, 464 CUPE v. Ontario (Minister of Labour) (Can) 162–5 Currie, David 150 d’Aguesseau, Henri-Francois 423 Dame Veuve Trompier-Gravier (Fr) 289 Danthony (Fr) 297–8 Datla, Kirti 212 Declaration of Rights of Man 1789 25, 523 delegation of powers see also judicial deference constitutional controls 478–9 EU, in 688–96 democracy administrative law, and EU, in 673–4 independent election commissions 39–40 legitimacy, and 251 developing democracies delegation of powers, controls 478–9, 494–5 judicial deference 488–95 procedural fairness, importance of 494–5 public participation, and 251 vs. expertise 371–83 deregulation financial crisis, and 356–8 policy development 259, 356–8, 366 Devolvé, P. 638 Dewey, John 251 Dicey, A.V. 30–32, 35, 63, 103, 141, 586 Dickinson, Laura 554 digital government 361–3 distributive justice 32 Donnelly, Catherine 79 Dunsmuir v New Brunswick 400, 402 Ecuador 425 electoral commissions 39–40 E.ON case 129–30 Epoux Barbier v. Air France (Fr) 560

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Index  703 Equator Principles 584–5 errors of law see under judicial review EU accountability administrative agencies, of 246–7 technical expertise, and 375–9 administrative agencies/institutions accountability, and 246–7 anti-discrimination policies 244 appointments to 242, 247 background 241 challenges 245–7 competences 620 constitutional influences over 670–77, 681–2 coordination 245–8, 652 democracy, impacts on 245 discretionary powers 627–8, 632–47 financial crisis impacts 621–3, 632 financial securities regulation 621–2 judicial review 242, 245, 673–4 law reform 620, 623–4 legislative powers 245–6, 624–6, 674–5 legitimacy 626–7, 673–4 pluralization 672–3 political influences 246–7 powers over 241–3, 673 procedural safeguards 629–30 regulatory cooperation 295 regulatory oversight 245–6, 336–9 regulatory powers 621–3, 672 restrictions on 619–20 role of 241–2, 246–7, 672–4 soft vs. hard rules 246–7 structure 242–3, 245 technocratic rationale for 626–7 trends 672–3 US independent commissions, comparison 234, 241–3, 245–8 administrative discretion authority for 627–8, 633–7, 675 bounded discretion 646–7 development 627–8 ESMA ruling 633–7, 645 judicial review 635–9 Meroni doctrine 620, 627, 634–6, 673–4, 688 political vs. technical interpretations 633–5 Tetra Laval standard 636 wide vs. clearly defined powers 633–7 administrative independence challenges 242–5 legitimacy 243–4 limitations 242–7

administrative law challenges of 651–2, 672–3 Commission role 672–3 composite procedures 652 constitutional basis for 667–73 constitutional conflicts 623–4, 670–77, 681–3 democracy, and 673–4 doctrine of conferral 667 European Administrative Space 670 federalism, influences of 670–72 functions 611 good administration principles 652–3 harmonization 652 horizontal and vertical application 671–2 human rights, and 114–15 information provision 314–15 legislative powers 245–6, 611–12 liberalization 114–15 national laws, supremacy over 114–16, 670–72, 687–96 public consultation 314, 608 simplification 314 subsidiarity, and 693–4 administrative law reform administrative agency powers 620, 623–4 judicial review 620, 623–4 proposals 295 ReNEUAL model rules 295, 650–51, 653–66 administrative vs. constitutional character of 680–81 Better Regulation initiative 237 Charter of Fundamental Rights 114–15, 624, 652, 676 constitutionalism, in 682–8 delegated legislation 688–96 ECJ role 683–5, 687–96 judicial interpretations 688–96 legal entrenchment 684–5 principal-agent relationships 684–5 subsidiarity principle 693–4 Court of Justice 609–10 deregulation policies 356–7 Fiscal Compact 356 general principles 114, 652–3, 675–6 Impact Assessment Board 236–337 individual rights 609–10, 675–6 institutions 608–9, 611 judicial review administrative discretion 401, 635–6 civil vs. common law interpretations 401 constitutional impacts 624–9 development 620 errors of law 400–401

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704  Comparative administrative law expert conflicts, and 378–9 grounds for 611 institutional balance principle 375 manifest error 378–9 measures for approximation 625–6 private rights 623 process review 377–8 public participation vs. expertise 375–9, 383 purposive approach 378 representativeness 377 risk assessments, role of 377–9 substantive review 378–9 Treaty of Lisbon reforms 623–4 vertical and horizontal relationships 375–6 legitimacy of 686–7 powers, generally control regime 610–12 diffusion 604, 612 doctrine of conferral 667 governance model 608–10 regulatory oversight 611 separation of 241, 375, 625–6 socio-political influences on 611 supranational 607–10, 682–3, 687–96 privatization 554, 560 proportionality principle 409, 412, 464 public law, and constitutional conflicts 681–2 public participation 608, 623 authority for 376 civil society engagement 376 comitology process 375–6 consultation standards 376 EU Commission role 375–6 horizontal controls 375–6 judicial review 377–9 vertical controls 375, 377 vs. expertise 375–9, 383 regulatory oversight, generally 236–337, 611 Regulatory Scrutiny Board 245–8, 336–47 separation of powers 241, 375 social market economy 114 structure 240–41, 608–9 transparency 623 values 555, 608 European Central Bank 139–40, 241, 632 European Convention on Human Rights 1950 557 European Securities and Markets Authority (ESMA) 621–9, 633–7, 645, 688–91 European System of Financial Supervision 621 European Systemic Risk Board 621 Executive accountability, and 110, 239

administrative agencies, and 45–8 administrative discretion 53, 165, 168, 312, 396, 479, 632, 645, 646–7 administrative independence 139, 144, 169, 203, 208, 210, 222, 228, 235, 242, 672 administrative law 207, 237, 303, 305, 307, 312, 586 Australia, in 174–5, 611 Brazil, in 8, 183 Canada, in 159, 162, 165–6 Chevron, and 396, 692 common law, and 29, 103, 160, 601 constitutional law 49, 55, 66, 119, 135, 147, 154–5, 203, 542–3, 629, 695 delegation of powers, and 29, 32, 255, 478–9, 628 democratic accountability, and 9, 149, 168, 251, 259, 478–9, 494 ESMA ruling, and 634, 636 EU, in 245–6, 338, 375, 609, 632, 637, 659, 672 France, in 28, 145, 151–2 Germany, in 27, 143–5, 150–51, 628–9, 695 Hungary, in 125, 127, 131–2, 133 Independent regulatory agencies, and 7, 139, 143–4, 182–3, 200–201, 214–15, 226, 228, 235, 680 India 221 Individual rights, and 133 global governance organizations, and 614 judicial review, and 14, 55–6, 74–5, 104, 110, 125, 127, 131–2, 133, 162, 253, 277, 340, 382, 463, 489, 493–4, 634, 640, 644, 692 legislation/legislative control, and 5, 8, 49–51, 53, 54, 144, 186, 191, 198–9, 278, 338–9, 482, 686 Meroni, and 634 New public management, and 360, 366 New Zealand, and 177 Office of Information and Regulatory Affairs 335–6 parliamentary government systems, and 5, 54, 72–3, 159, 206–7, 223, 629 Poland, in 15, 481–2 Portugal, in 364 presidential government systems 44, 45–8, 54, 72–3, 149, 165, 187, 192–3, 206–7 private sector role 187, 228 public domain, and 525 public participation 253–4, 312 regulatory oversight, and 11, 48, 143, 334 rule of law, and 29, 103 rulemaking (rule-making), and 252, 254, 304, 309, 660

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Index  705 separation of powers, and 4, 26, 38–43, 46, 32, 147, 382, 601–2, 629, 695 South Africa, in 490 Taiwan, in 67, 146, 198–203, 484 trust, and 401 US, in 45–8, 144, 165, 181, 335–6, 340, 660 UK, in 170–73, 611 voidness, and 421 experts democratic accountability, and 371–83 expert reviews of experts 462 public participation, role conflicts 253, 370, 383–4 arbitrary and capricious test 373 comitology process, and 375–6 EU, in 375–9, 383 hard look judicial review 373 institutional balance principle 375 notice and comment rulemaking 371–4 substantive judicial review 373–4 transparency, and 371–2 UK, in 379–84, 462, 468–75 US, in 371–4, 377, 382–3, 394–9 value, judicial skepticism 381–3 vertical and horizontal relationships 375–6 regulatory oversight bodies 334 transnational regulation, role conflicts 592 Farina, Cynthia 692 FCC v. Fox Television (US) 374 FDA v Brown and Williamson Tobacco Corporation (US) 396–7 financial crisis administrative agencies, impacts on 621–3, 632 administrative law impacts 352–8, 367 bailouts 354 deregulation, and 356–8 Fiscal Compact 356 New Public Management, and 358–9 privatization, and 352–3, 356–8, 366, 533 public spending impacts 354–6 sovereign debt impacts 355–6 Finanzausgleich I (Ger) 150 Fleiner, Fritz 405 Fleming, Gabriel 178 Forestry Stewardship Council (FSC) 585, 591–2 France accountability model 253–4 administrative agencies/institutions 65 centralization 154 independence 139–40, 144–5, 151–4 jurisdictional comparisons 151–5

market regulation influences 152–4 principal/agent relationships 144–5 regulatory oversight 335 role and powers 151–2, 154–5, 294 rulemaking 294–5 administrative court 81 access to justice, and 440–41 adversarial principle 441 annulment, retroactivity reforms 444 appeals procedures 438 constitutional controls 68 decisional economy 441–2 emergency procedures 443–4 ethics charter 437 grounds of public policy 441 historical development 435 human rights, and 436–8, 442 incompetence or invalidity claims 441–2 judicial independence, and 435–7 judicial powers, authority and validation 438–9 judicial review 10, 13–14, 286–8, 297–8, 335, 443 judicial role and duties 439–40 legal certainty, and 444–5 pending litigation, applicability of new judicial rules 444–5 procedural reforms 443–4 right to fair trial, and 442 time limits and delays 442–4 administrative law administrative discretion 637–9 autonomy 102–3 Code of Relations between Public and Administration 364–5 codification 284–98, 364–6, 657–8, 664 constitutional law, and 284 criticism of 141 historical development 23–6, 102–3 judicial review 25–6, 154, 637–8 Napoleonic influences on 25–6 network pricing regulation 326–30 New Public Management 360 norm-creation role 326–30 proportionality, and 110, 411, 413 public authority concept 106 public consultation 292–5, 298–9, 326–30 public law vs. private law 102–3 regles exorbitantes 102–3 Revolution, influences of 24–5 separation of powers 25–6, 63, 80–81, 103, 144–5 transparency 326–30 vs. negotiated regulation 108 vs. ordinary law 141

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706  Comparative administrative law Administrative Procedure Code of 2015 (FR) access to information 291 adversary proceedings 289–90 background 284–7 case law impacts 296–8 case law restatement 288–90, 296–7 codification, resistance to 285–6, 296 Conseil d’Etat, and 286–8, 296–8 dispute resolution 290 due process doctrine 289 general principles of law, and 288–90, 296–7 limitations 288, 294 personal data 291 personal rights under 288–9 public consultation 292–5, 298–9 public interest, and 298–9 purpose 284–5, 296–7 repeal rules 295–6 rights of defense principle 289, 298 rulemaking powers 294–5 simplification 291–2, 295–6 statute law restatement 290–92 structure and coverage 287–8 transparency, and 291, 299 unlawfulness 295–6 voidability principle 297–8, 426 withdrawal vs. abrogation 295–6 constitution 65, 667 administrative court, and 68, 438–9 administrative law codification, and 284 regulatory powers under 151 electoral system 80 invalidity, right to resist 421 judicial independence collegiality 436 development 436–7 duty of 436 human rights conflicts 437 impartiality, and 437 juge unique 436 perception of 436–7 powers and authority, impact on 438–9 principles 435–6 protection of 436–7 secrecy, and 436 judicial review 286–8, 297–8, 335, 443 advisory opinions 298 historical development 25–6 law reforms 443 reasonableness review 80–81 separation of powers 80–81 standing rules 525 voidability 297–8, 423–4, 426

privatization 554, 560, 562–3 public contract termination 562 public property law 514–15 public spaces, law of 521 Crown ownership 522–3 enforceability 524 historical development 522–4 inalienability 522–3, 525 judicial review standing rules 525–6 public interest protection 525 public law vs. private law separation 514–15, 522–6 regulatory oversight 335 voidness vs. voidability 423–4, 426 Gaines v. Thompson (US) 269 Gauweiler v. Deutscher Bundestag (EU) 635, 646–7, 694–6 Germany accountability chain of legitimacy model 253–4 administrative agencies/institutions 65 independence 139, 144–5, 150–51 jurisdictional comparisons 150–51, 154–5 market regulation influences 150–51, 154 principal/agent relationships 144–5 role and powers 150–51, 154–5 administrative court 81–2, 479 administrative law administrative discretion 639–41 codification 286 constitutionalism, and 150–51, 667, 694–6 Europeanization and internationalization 90–91 federalism, and 151, 154 Gewährleistung 89–91 historical development 4, 26–8 information society impacts 91 interventionist welfare trend 88–9 New Public Management 89–90, 360 political freedom, limits on 26–8 principle of legality, and 27–8 procedure code 63 proportionality, and 110, 408–10, 413–14, 417 purpose 63 Rechtsstaat 4, 26–31 reforms 89–90 steering vs. governance 5–6, 93–4 vs. negotiated regulation 108 vs. ordinary law 141 administrative law scholarship background 85 challenges 85–6 constitutionalism 86–7

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Index  707 contextual influences 94–5 development 5–6, 86–7 EU and international law influences 90–91 exclusions 87–8 interdisciplinary influences 91–2, 95–7 juristic approach 87–9, 94–5 Neue Verwaltungsrechtswissenschaft approach 91–7 regulative law crisis 88–9 rights-based interpretation 86–7 rule of law, and 86–7 steering theory 5–6, 93–4 constitutional court constitutional complaints 132–3 role of 150–51 electoral system 80 essential matters doctrine 628 financial crisis, and 356 invalidity, right to resist 421 judicial review administrative autonomy, and 144–5 historical development 28 individual public rights 81–2 reasonableness review 80–82 proportionality principle 408–9 public participation model 253–4 renewable energy policy, in 260–65 separation of powers 80–81, 144–5 constitutional controls 478–9 differentiated system of reservation 482–3 voidness vs. voidability 424, 426, 430 Giannini, M.S. 640 Ginsburg, Tom 510 global administrative law 3, 658 globalization 354 Goodnow, Frank 31–2 government systems, generally see also parliamentary government; presidential government; public powers definition 601–2 network governance 613 gridlock tactic 74–5 Habermas, J. 514, 526 Hague v. CIO (US) 520 Hale, M. 518 Hamilton, Alexander 424–5 Hardin, G. 514–15 Harlow, Carol 586–9 Hauriou, M. 523–4, 638 Hilron v. Fruit Council (Isr) 457 human rights law Declaration of Rights of Man 1789 25, 523

EU Charter of Fundamental Rights 114–15, 624, 652–3, 676 European Convention 114 judicial review, and 111, 464 non-state regulation, and 590 privatization, and 543, 557–60 public values, and 555, 557–9 right to fair hearing 652–3 Hungary administrative courts 125–6 administrative law constitutional powers 119–20 discretionary powers 130 EU law influences 119, 122–3, 135 fair administration principle 130–31 General Rules of Administrative Procedure 121–3 human rights, and 122 judicial review 119, 121–2, 125–31, 134 legal remedy, right to 127–8, 131 legality, review of 128 National Judicial Office 125–6 procedural oversight 121–2 proportionality 123, 128 reforms 127 rule of law, and 130 standing rules restrictions 128–30 vs. ordinary law 124 constitutional court 120 competence 131–3 constitutional complaints 131–2 independence 124 judicial review, and 121–3, 125–6, 131–3 legislative reform role 120–22 limitations 133, 135 limits on 124–5 powers of 124–5 procedural scrutiny 121–2 constitutional law administrative law, and 119–20 amendment powers 119, 123 challenge, powers of 120–21, 125 Fundamental Law 2011 123–8, 134–5 individual decisions, review of 132–3 judicial initiative 132 judicial reforms 124–5 judicial review 131–5 legal norms, review of 131–2 reforms 120–21 rule of law, and 124 written constitutions 119–21, 124 political developments 119–23 ICANN 583, 595 illegality concept 422–3

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708  Comparative administrative law Illinois Central Railroad v Illinois, 206 U.S. 441 (1907) 274 Illinois Central Railroad v Illinois, 146 U.S. 387 (1892) 519, 524–5 Immigration and Naturalization Service v Cardozo-Fonseca (US) 395–6 Impact Assessment Board (EU) 236–337, 336–7 independent regulatory agencies see administrative agencies/institutions India administrative agencies/institutions accountability 222–3, 229–31 challenges 224–6, 228–9 depoliticization 226 development 219–24 electricity sector 225–6 financial sector 226–7 historical influences on 9, 221–3 innovations 222 legal basis for 221 limitations 224–9 overview 227 Planning Commission 222–3 powers 223–8 private sector role 226 telecommunications sector 223–5 administrative independence accountability, and 229–31 benefits 228–9 development 224 dispute settlement 228 institutional powers 224–8 resistance to 230–31 UK influences on 229–30 US influences on 223 administrative law development 218–20 developmental state concept 222–3 economic crisis, and 219–20 influences on 218–20 liberalization 224–5 reforms 219–20 regulatory state characteristics 220 constitution accountability 222–3 drafting, influences on 221–3 judicial review 221–2 limitations and omissions 221 national independence colonial influences on 221–3 economic liberalization, and 218 separation of powers 222 individual rights 30–31, 81–2, 609–10, 675–6 Indonesia 68

Indus. Union Dep’t, AFL-CIO v. Am. Petroleum Inst. (Benzene Case)(US) 373 intelligible principle 52–3 international institutions, generally administrative law, national law influences on 116 Interstate Commerce Commission (ICC) background 234–40 independence 103, 148–9, 235–9 reasonableness review 272–5 role and expertise 236–7 invalidity see also voidness and voidability apparent paradox, and 431 conservation principle, and 430 definition 420–22 historical development 422–5 presumption of validity 421 retroactivity/retrospectivity 431 right to resist 421 ultra vires acts 424 Israel judicial review adjudicative proceeding 453–4, 459 case law trends 454–6 closed record procedures 455–6 court powers 454–6 deference rule 456 development 446, 454–6 general principles 455–8 grounds for 454 initial administrative decisions 453 inquisitorial proceedings 459 model 446 natural justice, and 453, 459 new arguments rules 456–7 new evidence rules 455–6 open review procedures 452–8, 455–6 quasi-judicial actions 453 quasi-legislative functions 452–3, 459–60 reasonableness 457–8 reconsideration stage 453–4 selective enforcement doctrine 458–9 standing, public petitioner concept 457 UK influences on 452, 454 US practices, differences from 458–60 privatization 538, 540 Italy administrative agencies 109, 112–13, 115 administrative courts 104–5, 110 administrative law administrative acts, authority for 105–6 anti-corruption policies 361 authoritarian model 105–6 concessions and exceptions 107–8 Council of State 105, 110

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Index  709 discretionary powers 105, 109, 460–41 EU law influences 113–16 General law on Administrative Procedure 364 historical development 102–6, 116 human rights, and 115 influences on 102–4, 109 international law influences 116 judicial review 104, 109–11 liberalization impacts 114–15 private interests, and 112–13 proportionality, and 110 reforms 106–7 separation of powers 105 social welfare rights, and 106–8, 115–16 tort liability 109 vs. negotiated regulation 107–8 vs. ordinary law 104–5, 107–9 constitution 115–16 invalidity, right to resist 421 New Public Management 361 privatization policies 357 regulatory oversight 335 voidness vs. voidability 424, 427 ius resistendi 421 Jaffe, Louis 271 Japan administrative law access to justice, and 365, 506 Administrative Case Litigation Law 505–6 influences on 506 limitations 506 litigation procedure rules 505–8 reforms 497, 505–7 rulemaking 295 digital governance 362–3 judicial review administrative disposition 506–9 errors in law 511 legitimate interests 508 limitations 506, 511 minimum intervention principle 500, 504, 508, 511 principal-agent relationships, of 510–11 purpose 505–6, 508, 511 reforms 497, 505–7, 510–11 standing to sue 506–8 urban space, interpretation 499–500 land and planning laws consultation and coordination model 504, 509–10 decentralization 502 development 500–504 governance models 504–10

minimum intervention principle 500, 504, 511 principles 498–500 public participation, and 502–4 purpose 498, 501 rights-based model 504, 507–9 stakeholder conflicts 498–500, 502–3 urban renewal 502–4 urban space partition, interpretation 498–500 urbanization, and 500–504 Joseph v City of Johannesburg (SA) 489–91 judicial deference Chevron doctrine 12, 42, 57, 276, 394–9, 449, 468, 690–92 democratization influences on 488–95 Israel, in 456 Poland, in 479–82, 488, 491–4 South Africa, in 485–91, 493–4 Taiwan, in 482–5, 488–9, 493–4 US, in 58, 447–8 judicial independence Australia, in 174–5 Canada, in framework 161–2 judicial appointments 162–5 judicial interpretation 165–70 political interference 159–66 conflicts 160 depoliticization 162 New Zealand, in 176–8 theory 38–9 UK, in historical development 170–74 human rights, and 170–71 judicial appointments 173–4 law reform committees 170–74, 178 Military Tribunals 171–2 judicial review arbitrary and capricious test 76–7, 79–80, 83, 373 bipolar model 268–9, 272 closed review model 446 US practices 446–52, 458–60 development 25–6, 365 errors of law 391–2 Canada, in 399–400, 402 Chevron doctrine 42, 56–7, 276, 394–9, 402–3 collateral fact doctrine 389–91 commencement theory of jurisdiction 391, 394 comparative law role 389, 395 correctness test 400 EU, in 400–402

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710  Comparative administrative law force of law, and 398–9 formal agency adjudication 399 interpretation difficulties 390 irrationality 78–80, 392, 399–400 jurisdictional error 270–71, 390–91, 393, 399–400, 402 legislative intent 394–9, 402–3 normative assumptions 393–4, 397–9 one vs. two test approaches, comparison 402–3 reasonableness review 400 restrained test 392 step zero 397–9 substitution of judgments 402 textual interpretation 395–9 UK, in 389–94, 402 ultra vires doctrine 391–4, 424 US 394–9, 402–3 EU, in 673–4 administrative discretion 401, 635–6 civil vs. common law interpretations 401 constitutional impacts 624–9 development 620, 673 errors of law 400–402 expert conflicts, and 378–9 grounds for 611 institutional balance principle 375 manifest error 378–9 measures for approximation 625–6 private rights 623 process review 377–8 public participation vs. expertise 375–9, 383 purposive approach 378 representativeness 377 risk assessments, role of 377–9 substantive review 378–9 Treaty of Lisbon reforms 623–4 vertical and horizontal relationships 375–6 France, in historical development 25–6 reasonableness review 80–81 separation of powers 13–14, 80–81 Germany, in administrative autonomy, and 144–5 historical development 28 individual public rights 81–2 reasonableness review 80–82 historical development 25–6 illegality 77–8, 463 irrationality 78–80, 392, 399–400, 468 Israel, in 446–61 non-state regulation, and 587–9 open vs. closed procedures closed arguments/reasons rules 448–9

closed record procedures 455–6 closed record requirement 447–50 closed review model 446 closed review rule 449–50, 452, 458–9 Israel, in 452–60, 455–6 open review model 446 open review procedures 452–8 scope of review 446 US, in 446–52, 458–60 principal-agent relationships, and 510–11 principles of 463 privatization 546 procedural and merits review, combination of benefits 473–5 cases 468–73 procedural impropriety 463 public participation vs. expertise EU, in 375–9 notice and comment rulemaking, and 371–4 substantive review 373–4 UK, in 379–83, 462, 468–75 US, in 371–4, 377, 382–3, 394–9 public spaces, law of human rights, and 521 public rights, historical development 517–18 reasonable access standard 521 standing rules, and 525–6 reasonableness review arbitrary and capricious test 76–7, 79–80, 83, 373 discretionary choice 78 France, in 80–81 Germany, in 80–82 hard look review 373 illegality 77–8 irrationality 78–80, 392, 399–400, 468 Israel, in 457–8 law-fact distinction 274–7 proportionality 78–9, 411, 413 relevancy principle 77–8 South Africa, in 490–91 Sweden, in 326 UK, in 77–80, 111 unreasonableness, interpretation 78–9, 111, 281–2 US 76–7, 79–80, 83, 111, 272–7 Wednesbury test 78–9, 111, 410, 463–4 specialist courts, benefits and limitations 367–468, 475–6 trends 365 UK, in proportionality, and 111

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Index  711 reasonableness review 77–80, 111 trends 365 Wednesbury test 78–9, 111, 410, 463–4 US, in arbitrary and capricious test 76–7, 79–80, 83, 373 challenges 279–81 damages actions 269 historical development 268–75 ICC reasonableness 272–5 Israeli practices compared 446–61 jurisdictional error 270–71 land claims 270–71 reasonableness review 76–7, 79–80, 83, 111, 272–7 separation of powers, and 14, 279–80 statutory requirements 279–80 substantive review 373–4 timing, relevance of 280–83 voidness vs. voidability 297–8, 420 Kadi and Al-Barakaat v. Council of the European Union (EU) 590 Kelsen, Hans 684 Kettl, Donald 554 Keynes, John Maynard 32–3 Koppell, Jonathan 613–14 Kovacs, A. 130 Laferrière, Édouard 285–6 Latin America see also individual countries privatization trends 357 voidness vs. voidability 424–5, 427–8, 430, 433 welfare, private sector role 357 Lebron v. National Railroad Passenger Corporation (US) 560 Legislation/Legislative control generally 5, 41, 48, 64, 307, 389 accountability, and 254 administrative agencies, and 282, 307, 310, 319, 371 administrative courts 438–9, 441, 443 administrative discretion, and 57, 143 administrative independence, and 140, 143, 165, 175, 203–4 administrative law, and 83, 94, 96, 112, 237, 654 administrative law scholarship 85, 88–9, 91, 93 Administrative Procedure Act (US), and 71, 112, 237, 275 Australia, in 161, 174–5, 611 Brazil, in 183, 186–7, 191–3 budget, and 54, 143, 168

Canada, in 159, 161–2, 166, 168, 399 Chevron, and 57, 394–5, 402, 403, 690 China, in 365 common law, and 7, 30, 168 constitution/constitutional law, and 28, 38– 41, 49, 52, 61, 150, 166, 174, 254, 417, 439, 482, 542, 601, 680, 684–8, 695 cost-benefit analysis/regulatory impact assessment 95, 316, 334, 347, 478 delegation of powers, and 14, 29, 46, 61, 149, 170, 245, 254–5, 277, 279, 281, 294, 295, 303, 312, 366, 375, 376, 378, 478–9, 481, 484, 628, 640, 673, 674, 684–8, 692 democratic accountability, and 251–3, 256, 478 executive, and 8, 41, 44, 52, 72–4, 125, 143, 149, 151, 170, 183, 207, 237, 603 expertise, and 149, 255 ESMA Case and 689–90 EU, in 11, 17, 240–41, 244–5, 247, 284, 316, 338–42, 343, 346, 347, 375, 400–401, 412, 438, 492, 608, 609, 611, 623, 625–6, 628, 629, 630, 634, 651, 653, 654, 657, 659, 662–5, 673, 674, 680–89, 691, 693 France, in 10, 144, 152, 154, 253, 284, 285, 287, 291, 292, 294, 296, 335, 366, 411, 438–9, 441, 443 Germany, in 85, 88–9, 91, 93, 96, 144, 151, 154, 253, 260, 263, 286, 478–9, 482–3, 657, 695 Hungary, in 120–25 Illinois Central I, and 274 Independent regulatory agencies 140, 144, 165, 175, 201, 203–4, 208, 213, 225–56, 235, 237, 240–41 India, in 225–6 International/transnational organizations, and 558, 586, 590, 593, 608 Italy 366, 657 Japan, in 497, 500, 501, 503, 504, 507, 508, 510 judicial review, and 8, 28, 57, 74–5, 83, 121–3, 143, 144–5, 148, 162, 277, 279– 80, 370, 390, 391, 394–8 402, 451, 463, 507, 508, 510, 639–40 Locke, J., and 52 Meroni, and 688 Netherlands, in 364 New public management, and 361 New Zealand, in 161, 176 Office of Information and Regulatory Affairs (US), and 335, 337, 342 parliamentary government systems, and 5, 42, 45–7, 74, 615 Poland, in 479–80, 481, 482, 491–2

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712  Comparative administrative law Portugal, in 364, 425, 657 presidential government systems, 45–7, 72, 74, 208 privatization/contracting out, and 539, 544, 546, 553, 556, 557, 560, 561 public domain, and public participation, 251–3, 256 Rechtsstaat, and 27–30, 482–3 reasonableness/reason-giving 78, 149, 279 regulatory oversight, and 258, 334 rule of law, and 30 rulemaking (rule-making), and 278, 372, 608, 629 separation of powers, and 4, 38–41, 44, 166, 174, 254, 601, 602 South Africa, in 485, 487, 493 Soviet governance, and 121 Spain, in 366, 657 Taiwan, in 67, 201, 203–5, 207, 483–4, 488–9 trust, and 518 US, in 45–7, 83, 93, 144, 148, 150, 154, 165, 237–8, 240, 254, 274, 275, 277, 278, 335–7, 343, 372, 383, 394–8, 451, 519–20, 542, 602, 690, 692 UK, in 73, 161, 165, 380, 390, 391, 394, 402, 463, 517, 526, 587, 611, 657 voidness vs. voidability, and 421, 423, 425, 429, 430, 433 welfare, and 107 Livermore, Michael 340 Locke, John 38–9, 52 Long Island Care at Home v Coke (US) 403 Loughlin, M. 517 Lujan v. Wildlife (US) 56–7, 525 Maitland, F.W. 30–31 mandamus actions 269, 272 Marbury v. Madison (US) 55, 269, 280–81 Marcou, Gerard 146 Martin, Kevin 212 Martin v. Waddell’s Lessee (US) 519 Masing, Johannes 151 Massachusetts v. EPA (US) 373–4, 379 Meroni v. High Authority (EU) 620, 627, 634–6, 673–4, 688 Merrill, Thomas 272, 276 Mexico 422 Meyer, Otto 144 military and security contractors see United States Montesquieu, Charles de Secondat et de 26 separation of powers theory 38–9, 147 Morris v. UK (EctHR) 171–2

Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance (US) 76–7, 83, 373 Myers v. United States (US) 54 nation states, generally historical development 605 National Association of Manufacturers v. Environmental Protection Agency (US) 374 natural justice 63, 112, 453, 459 Netherlands 357, 363–4 network governance 613 neutrality see also administrative independence independence, relationship between 211–12 New Public Management financial crisis, and 358–9 France, in 360 Germany, in 89–90, 360 Italy, in 361 Korea, in 359 potential impacts of 358–9 principles 358 purpose 353, 359 Spain, in 360–61 UK, in 353, 359 US, in 359–60 New Zealand 176–8 Nold v. Commission (EU) 656 non-state regulation see transnational regulation Norton v. Southern Utah Wilderness Alliance (US) 525 notice and comment rulemaking 258–9, 265, 295, 371–4, 458–9 Ocean Port Hotel v. British Columbia (Can) 165–9 Office of Information and Regulatory Affairs (OIRA)(US) administrative burden oversight 342 background 335–6 benefit-cost analysis 340–41, 345–7 courts, interaction with 340–41 functions 338, 340–42, 344–6 impacts 345–6 independence 337, 338 limitations 341, 346–7 powers 340–43 procedure rules 342–3 prompt letters 341 review eligibility criteria 346 review methods 346–7 review, place in policy cycle 338, 343–4, 347–8

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Index  713 structure 337–8 time limits 343 transparency 343 ombudsmen 611 open public administration see public participation organizational theory 570–71 Ostrom, Elinor 526 parliamentary government systems collective political responsibility 45–6 gridlock tactic 74–5 independent agencies 45–6, 206–7 judicial review, and 72–4, 77–80 policy change, ease of 73–4 PPT predictions 72–4 presidential systems, compared 45–8, 73–5 principles 45–6, 54 private interests 73–5 reasonableness review 77–80 reelection strategies 73, 75 Peru 284 Pfizer Animal Health v. Council (EU) 378–9 Plessix, Benoît 524 Poland constitutional law administrative controls 478–9 essential elements reservation 480–82 EU law interaction, and 491–2 legitimate expectations 492–3 restrictions on 480–82 democratization 479–80, 493–4 judicial review constitutional freedoms, limitations on 480–82 Gambling Act 2009 491–2 judicial deference 479–82, 488, 491–4 proceduralization 479 renewable energy policies 480–82 Police Department of Chicago v. Mosley (US) 520 political insurance model, PPT 211 political interference see also judicial independence administrative independence, influences on 159–61, 179 meaning 159 role of 161, 178–9 Portugal 364, 424–5, 432 positive political theory (PPT) administrative independence capacity-building 211–13 control model 210–11 neutrality and impartiality 211–12 political insurance model 211

social need, and 212 trust model 210–11 application 71–2 development 71 limitations 82–3 parliamentary systems 72–5 judicial review 74–5 policy change, ease of 73–4 reasonableness review 77–80 presidential systems 72–5 judicial review 74–5 policy change, ease of 73–4 reasonableness review 76–7 purpose 71 reasonableness review France 80–81 Germany 80–82 UK 77–80, 111 US 76–7, 79–80, 83, 111 scholarship influences of 71 US policy, and Administrative Procedure Act 71–2 reasonableness review 76–7 Prado, Mariana Mota 213, 230 presidential government systems gridlock tactic 74–5 independent agencies 149–54, 206–7, 210–11 judicial review 76–7, 83 parliamentary government, compared 45–8, 73–5 policy change, ease of 73–4 PPT predictions 74–5 private interests 73–5 reasonableness review 76–7 reelection strategies 73, 75 privatization administrative processes anti-delegation presumption 544 conflicts with 582 constraints on 544–7 duty to formulate policy, and 544–5 preliminary decision-making 544 public participation 545 transparency, and 545–6, 560–61 characteristics 534–5 competition, and 546–7 constitutional law, and 538–9, 541–3, 548–9, 560 contracting out, and 536 accountability 558–9, 561–3 applicable law 559–61 development and trends 553–4 international institutions, by 554 judicial redress 561–3 principles 552–3

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714  Comparative administrative law public values, and 554–9 vs. public procurement 553 contractual controls 549–50, 559–60 criticism of 357–8 EU, in 554, 560 fairness, in 540 fee charging for services 537 financial crisis, and 352–3, 356–8, 366, 533 France, in 554, 560, 562–3 freedom of information, and 560–61 human rights, and 543, 557–60 international law applicability 562–3 judicial redress 561–2 judicial review 546, 562–3 limitations 538–41, 556, 560–61 mechanisms 535–8 omission of action, by 537, 547 outsourcing to private sector 536 private investment 536 private sector licensing/permits 536 public contract, recognition of 561–4 public law, and applicability 541, 557–61 constitutional conflicts 541–3 implications 533 limitations 541–50 state action doctrine 548–9 public participation, and 545 public space commercialization 537 public values, and accountability 558–9, 561–3 applicability 557–61 challenges to 545 military and security contractors 554, 566–7, 569, 572–4 purpose 534, 555 regulation 540–41, 547–50 sale of state-owned assets 535 state action doctrine 548–9 statutory controls 549 third-party cooperation 537 transfer of assets to foreign entities 539 trends 259, 352–3, 356–8, 366, 550, 553–4 UK, in 259, 356, 540–41, 553–4, 556, 560 ultra vires principle, and 539, 544 US, in 356–8, 543, 553–4, 556, 560–61 voucher systems 538 property rights see land and planning law under Japan; public spaces, law of proportionality principle administrative review, in fair balance, and 464 historical development 408 human rights law, and 464 judicial discourse role 412–14, 416

national variations 405–6, 414–17 necessity, and 407, 464 place in 406–7 scale of use 411–12, 416 scope of use 409–11, 414–15 trends 405–6, 414–15 Canada, in 410, 417 criticism 405 EU, in 409, 412, 464 France, in 110, 411, 413 Germany, in 110, 408–10, 413–14, 417 historical development 407–8 Hungary, in 123, 128 Italy, in 110–11 public law role 416–17 purpose 405 reasonableness, and 78–9, 411, 413 triple phase test 110 UK, in 111, 409–10, 464 Proudhon, Victor 523 public forum doctrine 520, 522 public law vs. private law see also public spaces, law of privatization, and 533 proportionality principle 416–17 social rights influences 32 public participation challenges 253, 257–9 criticisms of 255–8, 263–6 decision-making, place in 263–5 effectiveness, improving 265–6 expertise, conflicts with 253, 370, 383–4 arbitrary and capricious test 373 comitology process, and 375–6 EU, in 375–9, 383 hard look judicial review 373 institutional balance principle 375 notice and comment rulemaking 371–4 substantive judicial review 373–4 transparency, and 371–2 UK, in 379–84, 462, 468–75 US, in 371–4, 377, 382–3, 394–9 value, judicial skepticism 381–3 vertical and horizontal relationships 375–6 German nuclear power phase-out, in 260–65 importance 251, 370 influences on expertise 256 individual decisions 253–4 lobbying 254 policy choices 253–6 interpretation 252–3, 370 interrelationships 252–3 legal requirement for 254 models 253–4, 279, 377, 382–3

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Index  715 importance 254 limitations 254 notice and comment rulemaking 258–9, 265, 295 random sampling 258–9 norm-creation, and EU, in 320–22 France, in 326–30 Sweden, in 325–6 UK, in 322–5 privatization, in 545 procedural management 257–9, 265–6 public hearings 257 roles of 252–3 stakeholders role 255, 258 public power, control of see also separation of powers accountability 603 checks and balances 603 diffusion vs. concentration 601–4, 611–12 distribution – control hypothesis 603–4 doctrine of conferral 667 functional vs. soci-political 602, 616 mechanisms 603 nation state, development of 605 ombudsman role 611 sharing vs. supervising 603 supranational powers definitions 605–6 delegated legislation 688–96 development 605–6 EU, in 607–12, 682–3, 687–96 international organizations, characteristics 605–6 judicial interpretation 688–96 legitimacy concerns 607 private bodies 605 socio-political influences on 611–12 subsidiarity, and 693–4 theories of 606–7 treaty based power 605–7 system of government approach 601–2, 616 transnational powers accessibility 614 characteristics 613–14 control regimes 615–16 definitions 605–6 development 605–6, 612 functions 612–15 limitations 613 network governance 613 policy-making 614–16 rulemaking 613–14 vertical vs. horizontal 602

public spaces, law of attitudes, changing 526 common law vs. civil law systems 526 consultation and coordination model 504, 509–10 definitions 513–14, 516 France, in 521 Crown ownership 522–3 enforceability 524 historical development 522–4 inalienability 522–3, 525 judicial review standing rules 525–6 public interest protection 525 public law vs. private law separation 514–15, 522–6 judicial review human rights, and 521 public rights, historical development 517–18 reasonable access standard 521 standing rules, and 525–6 liberalism, and 516 possessive individualism, and 515 public interest protection 525–6 rights-based model 504, 507–9 rights to use 516 tragedy of the commons 514 UK, in 514–15 Crown ownership, and 516–18 development 516–17 human rights, and 521 inalienability 516–17 Magna Carta 518 public rights, judicial interpretation 517–18 public trust theory 518–19, 524 reasonable access standard 521 US, in 514–15 constitutional protection 525–6 judicial review standing rules, and 525 public forum doctrine 520, 522 public trust theory 515, 518–19, 524 public trust theory 515, 518–19, 524 public values contracting out, conflicts accountability 558–9 applicability 557–61 interpretation 554–5 privatization, threats from 555–6 Pushpanathan v. Canada (Can) 399–400 R v. Commissioners for Special Purposes of Income Tax (UK) 391 R (on the application of Mott) v. Environment Agency (UK) 383

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716  Comparative administrative law R (Jones) v. First-tier Tribunal (UK) 392–3 R v. Hull University Visitor, ex parte Page (UK) 391–4 R v. MMC ex p South Yorkshire Transport (UK) 392 R v. North and East Devon Health Authority, ex parte Coughlan (UK) 472 R v. Panel on Take-overs and Mergers, ex parte Datafin (UK) 587–8 R (on the application of Greenpeace Ltd) v. Secretary of State for Trade and Industry (UK) 472 R (Cart) v. Upper Tribunal (UK) 392–3 Rau, Charles-Frederic 424 Rawlings, Richard 586–9 reasonableness, generally 268–9 damages actions 269 discretion, and 78, 268–9 injunctions 269 unreasonableness, interpretation 78–9, 111, 281–2 reasonableness review Canada, in 400 discretionary choice 78 France, in 80–81 Germany, in 80–82 illegality 77–8 irrationality 78–80, 392, 399–400, 468 Israel, in 457–8 law-fact distinction 274–7 proportionality 78–9, 411, 413 relevancy principle 77–8 South Africa, in 490–91 Sweden, in 326 timing, relevance of 280–83 UK, in 77–80 Wednesbury test 78–9, 111, 410, 463–4 US, in 111 arbitrary and capricious test 76–7, 79–80, 83, 373 Chevron doctrine 42, 57–8, 276 development 269, 272–7 ICC cases 272–5 law-fact distinction 274–7 Rechtsstaat 4, 26–8 EU, and 624 rule of law, and 29–35 Taiwan, and 482–3 regulatory institutions, generally 64 hybrid bodies 583–4 non-state regulation 583–4 purpose 333 regulatory oversight see also Office of Information and Regulatory Affairs; Regulatory Scrutiny Board

bodies 333–4, 333–5, 345, 347–8 challenges 345 Hungary, in 121–2 purpose 333–4, 344–5, 347–8 review methods 346–7 tools 334 regulatory powers, generally see also public powers administrative process theory 149 EU, in 621–3, 672 constitutional conflicts 623–4, 670–77, 681–2 legitimacy of 687 national law conflicts 680–81, 688–96 France, in 151 hybrid regulatory bodies 583–4 trends 680 Regulatory Scrutiny Board (EU) 245–6 background 336–7 functions 339, 341–2, 344–6 impacts 345–6 independence 338–9 limitations 341, 343–4, 347 powers 340–43 prompt letters 341 reviews 338–9, 343–8 structure 338–9 time limits 343 transparency 343–4 relative authority theory 594–5 ReNEUAL model rules 295 background 650–51, 665 comparative influences on 654–63, 665–6 impacts of 663–6 judicial influences on 655–6 national codifications, and 656–9, 664 provisions administrative rulemaking 659–60 decision-making 660–61 general principles 658–9 generally 653–4 information management 662–3 mutual assistance 662–3 public contracts 661–2 purpose 650, 653 renewable energy policies 260–65 Revesz, Richard L. 212, 340 Rex v. Clark (UK) 518 right to be heard 676 Robson, William 33 Roman law 422–3 Romano v. INAMI (EU) 620 Rose, Carol 514–15 Rougham, Nicole 594 Rousseau, Jean-Jacques 257–8

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Index  717 rulemaking (rule-making) generally 85, 302, 303, 304, 306 307, 311, 312, 313, 315, 316, 478, 552 administrative law scholarship, and 85 Administrative Procedure Act (US), and 63, 112, 307, 316, 373 EU, in 254, 295, 376, 608, 609, 620–21, 628–30, 660 Executive, and 193, 303 France, in 143, 287, 290, 292, 294, 364 Foreign affairs and, 567 Germany, in 63, 82, 143, 253 global governance organizations, and 613–15 judicial review, and 9, 53, 55, 372–5, 398, 440–41, 460 legislation, and 47, 52, 278, 372, 608, 629 notice-and-comment, and 9, 10, 46, 48, 149, 253, 371–2, 399 public participation, and 63, 252, 255, 264, 207, 312, 545 reason-giving, and 113, 277–83 regulatory oversight 12, 48, 340–43, 347 Taiwan, in 208 US, in 63, 52–5, 112, 149, 254, 295, 307, 316, 372–5, 449–51, 460, 612, 628 rule of law 28–35, 64 Russia 32, 219–20 Rust v. Sullivan (US) 396 Sagen v. Vancouver Organizing Committee (Can) 589 Sanyal, Kaushiki 230 Schwarze, Jürgen 64 SEC v. Chenery Corp. (Chenery I)(US) 448 separation of powers administrative independence central banks 40 coordination challenges 40–41 democratic legitimacy, and 40–41 electoral commissions 39–40 limitations on 41 parliamentary systems 42–3 Presidential systems 41–2 Canada, in 166 development 25–6, 80–81 institutions, position conflicts 40–41 Lockean theory 38–9 Montesquieu’s theory 38–9 twenty-first century approaches 39–41 EU, in 241, 375 France, in 25–6, 63, 80–81, 103 Germany, in 80–81, 144–5 institutional independence, and conflicts 159–60 democratic legitimacy, and 40–41

electoral commissions 39–40 judicial review 72–82 political interference, and 159–60 PPT predictions 72–82 public power control, and 602 reasonableness review France, in 80–81 Germany, in 80–82 UK, in 77–80, 111 US, in 76–7, 111 theory 38–9, 147 US, in constitutional restrictions 46, 49–51 delegated legislation, and 51–2 electoral process 40 limitations 41 need for 44 parliamentary systems, compared with 45–8 Shapiro, Martin 230 Shively v. Bowlby (US) 519 Silva, M.B. 181–92 Skidmore v. Swift (US) 398 social welfare rights 32, 106–8, 355 Sorchi v. Interior Office (Isr) 456 South Africa administrative powers constitutional controls 67, 478–9, 490 Marine Living Resources Act 1998 485–7 democratization 479–80, 490, 493–4 judicial review apartheid regime 493–4 judicial deference 485–91, 493–4 proceduralization 479 reasonableness review 490–91 South Korea 359, 361–2, 409, 411 Spain administrative law 108, 364 New Public Management 360–61 public contracts 561 voidness vs. voidability 425–6, 430 Stalcup v. Peabody Coal Co (US) 374 Stauder (EU) 656 Stewart, Richard 71 subsidiarity principle 693–4 Sullivan v. Everhart (US) 397 supranational power see public power Sweden 65, 325–6 Taiwan administrative agencies/institutions appeals procedures 207–8 Basic Code 2004 201–2 Central Bank 212–15 constitutional challenges 203–4

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718  Comparative administrative law Council for United States Aid (CUSA) 199–200 independent commissions 198–207 Joint Commission on Rural Reconstruction (JCRR) 199–200 Mongolian and Tibetan Affairs Commission (MTAC) 199 National Communications Commission 198, 201–4, 213–14 Overseas Compatriot Affairs Commission (OCAC) 199 social influences 213–14 vs. executive agencies 212 administrative courts administrative dispositions 207–8 judicial deference 482–5, 488–9, 493–4 pre-appeals procedures 207–8 statutory reservation principle 479, 482–3 administrative independence 216 administrative functions, and 207–8, 214–15 administrative procedures, and 207–8 budgetary influences 208 bureaucratic relationships, and 209 Central Bank 212–15 commissioner appointments 204 constitutional influences 203–4, 206–7 coordination functions 208–9 historical development 198–201, 213–14 legal protection 215 legal recognition 200–201 media mergers, conflicts regarding 204–6 National Communications Commission 8, 198, 201–8, 213–14 practical application 214–15 regulatory functions, and 208 state-society relationships, and 209 structural influences 213–14 administrative law administrative appeals procedures 207–8 administrative unity, principle of 203 Organic Act of the Executive Yuan 199–200 reforms 201, 213–14, 483–5 regulatory mechanisms 200–201 structure 8, 198–9 constitution administrative appointments 202–4 administrative controls 67, 479 agency independence, and 203–4, 206–7 amendments 203–4 Interpretation No 613 (2007) 203–4 legislative approval procedures 204

democratization 479, 482–3, 493–4 judicial review constitutional courts 482–3 German influences on 482–3 powers 207–8 proceduralization 479 proportionality principle 411–12, 414 TalkTalk Telecom Group plc v OFCOM (UK) 469–71 Texas & Pacific Railway Co. v. Abilene Cotton Oil Co (US) 273 Thailand 65, 68 Tocqueville, Alexis de 23–6, 34 transnational power see public power transnational regulation administrative law accountability 584 conflicts with 582, 586–9, 595–6 engagement processes 589–95 incorporation under 587–9, 590–92 isolation from 589–90 judicial review, and 587–9 recognition under 592–3 authority 590–93 relative authority theory 594–5 compliance 584 experts, role in 592 functions 582–3, 585–7, 595–6 global influences on 595–6 human rights law, and 590 hybrid regulatory bodies 583–4 legitimacy 590–93 lex mercatoria, and 584 non-state regulation 583–6 self-regulation 584 trends 582, 595–6 types 582–4 corporate codes 584–5 Equator Principles 584–5 good practices 592–3 multi-stakeholder regulators 585, 592 UN Guiding Principles on Business and Human Rights 585 transparency French Administrative Procedure Code 2015 291, 299 New Public Management 359–61 norm-creation, and 319–21 EU, in 320–22 France, in 326–30 network pricing regulation, in 320–30 Sweden, in 325–6 UK, in 322–5 privatization, and 545–6, 560–61 public participation vs. expertise 371–2

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Index  719 Treaty of the Functioning of the European Union administrative authority 623, 670–72, 675, 689–91 administrative discretion 375, 624–6, 628–30 duty to consult 376 duty to give reasons 661 form and notification of decisions 661 judicial review 623 Trudler v. Elections Officer (Isr) 454 trust, importance of 251 trust model, PPT 210–11 Tuori, Kaarlo 683–5, 687 UEAPME case 377 UK accountability technical expertise, conflicts 462, 468–75 administrative independence dispute resolution 170 historical development 170 human rights, and 170–71 judicial appointments 173–4 judicial independence 170–74 law reform 172–4 ombudsman 611 administrative law autonomy 103 Big Society concept 353 classic model of 463 constitutional law, and 28–9, 667 deregulation 259, 356 digital governance policies 362 Efficient and Reform Group 359 financial crisis impacts 353–5 historical development 28–31, 103, 141 human rights law interaction with 111, 464 Industrial Revolution, and 29 Magna Carta 518 natural justice, and 112 network pricing regulation 322–5 New Public Management approach 353, 359 norm-creation role 322–5 Parliamentary sovereignty, and 29–30 privatization 259, 356, 553–4, 556, 560 procedural requirements 112 proportionality, and 111, 409–10, 464 public consultation 322–5 public power, concentration 604 rule of law 28–31, 64 separation of powers, and 382 Smarter State concept 353, 359 social welfare role 106–7

transparency 322–5 vs. ordinary law 103, 141 Competition Appeal Tribunal accountability vs. expertise conflicts 466, 468–75 benefits and limitations 467–8 functions 465–6 grounds of appeal 466 procedural and merits review, cases 468–73 procedural and merits review, combination benefits 473–5 structure 465–6 judicial independence Franks Committee 170 historical development 170–74 human rights, and 170–71 judicial appointments 173–4 Leggatt Review 170–74, 178 Military Tribunals 171–2 judicial review abuse of power 381 appeal, compared with 464 collateral fact doctrine 389–91 commencement theory of jurisdiction 391, 394, 402 errors of law 391–2, 402 historical development 463–5 irrationality 392, 468 jurisdictional error 390–91, 393, 402 law, questions of 389–94 limitations 393 normative assumptions 393–4, 402 principles of 463–4 procedural and merits review, cases combining 468–75 procedural and merits review, combination benefits 473–5 process review 380–82 proportionality, and 111, 409–10, 464 public participation vs. expertise 379–84, 462, 468–75 public spaces, public rights to 517–18 reasonableness review 77–80, 111 restrained test 392 specialist courts, benefits and limitations 367–468, 475–6 substantive review 382–3 substitution of judgments 389–94, 402 trends 365, 383 ultra vires doctrine 391–4, 424 Wednesbury test 78–9, 111, 410, 463–4 public participation capricious unfairness 381 duty to consult 379–80, 382

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720  Comparative administrative law legitimate expectation 379–81 pluralist influences 379–80 value, skepticism of 381–3 vs. expertise 379–84, 462, 468–75 public spaces, law of 514–15 Crown ownership, and 516–18 development 516–17 human rights, and 521 inalienability 516–17 Magna Carta 518 public rights, judicial interpretation 517–18 public trust theory 518–19, 524 reasonable access standard 521 voidness vs. voidability 424, 428–9 ultra vires doctrine 391–4, 424 privatization, and 544 United Kingdom v. European Parliament and Council (ESMA)(EU) 624–9, 633–7, 645, 688–91 United States accountability administrative independence, and 239–40 Government Performance and Results Act (GPRA) Modernization Act 2010 359–60 public participation model 254 administrative agencies/institutions Administrative Procedure Act of 1946 10, 34, 47, 71, 112, 141, 275–6, 279–80, 284, 335, 371, 567 authority and powers 51–3 challenges 238–40 conflicting agencies 238–9 Congressional oversight 7, 48, 53–5, 338 cooperative federalism 154 coordination 239–40, 247–8 development 50–51, 335–6 EU independent commissions, comparison 234, 241–3, 245–8 Federal Trade Commission 277–8 financial crisis impacts 622–3 judicial review 56, 141 jurisdictional comparisons 148–9, 154–5 legislative powers 52–3, 628 market regulation influences 148–9, 154 nondelegation doctrine 628 obligation exemptions 567 official, appointment powers 50–51 powers over 139 powers to create 50–51 principal/agent relationships 144 procedural requirements 112 role and powers 139, 148–9, 154–5, 628 rulemaking role 277–83, 612

administrative courts 141–2 judicial review of 447–9 administrative independence 139, 148–9, 234–40 accountability, and 239–40 challenges 239–40 Congressional oversight 48, 53–5, 338 Congressional powers 238 financial independence 236–7 Interstate Commerce Commission 103, 148–9, 234–40 leadership, and 212 legitimacy, and 148–9 limitations on 41 non-independent agencies, conflicts 238–9 Presidential powers 41–2, 49, 236–7 role of 148–9, 238–9, 278–83 theories of 234–6 administrative law administrative agencies, powers to create 50–51 Administrative Procedures Act 1946 10, 34, 63, 68–9, 237, 448 Administrative Reduction Act 1980 342 appointments, powers of 46–7, 50–51 collective political responsibility 46–8 Congressional powers 49–51, 238 constitutional limitations of 49–51 Court of Appeals (DC Circuit) 141–2 delegated authority 103–4 deregulation 356–8 digital governance policies 362 due process requirements 112 ex parte communications 237 Fair Deal, and 34 federal vs. presidential powers 44–5 financial crisis impacts 353–5 freedom of information, and 560–61 Government Accountability Office 6–7, 55 Government Performance and Results Act (GPRA) Modernization Act 2010 359–60 Hamiltonian theory 234–5 historical development 33–4, 103–4, 141, 268 intelligible principle 52–3 Jacksonian theory 234–5 judicial independence, and 63 judicial review 34, 141, 238 legislative authority 46–8, 52–3, 63, 237–8 legislative entrenchment 68–9 New Deal, and 33–4, 622 New Public Management approach 359–60

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Index  721 notice and comment rulemaking 258–9, 265, 295, 371–4, 458–9 parliamentary government, differences from 45–8 political interference 44–5 positive political theory (PPT), and 71–2, 79–80, 83 Presidential powers 41–2, 46–8, 236–7 privatization 356–8, 543, 553–4, 556, 560–61 public-private distinction 64 reason-giving in 268–72, 277–83 rotation in office system 234–5 social welfare role 107, 355, 356 spoils system 234–5 theories of 234–6 vs. negotiated regulation 108 vs. ordinary law 103–4, 108, 141 welfare reforms, and 355, 366 Constitution 65 administrative agencies 67 administrative controls 49–51, 67, 667 constitutions outside 68–9 judicial interpretation 68 privatization, and 543, 560 public trust theory 515 Interstate Commerce Commission (ICC) background 234 independence 6, 103, 148–9, 235–9 reasonableness review 272–5 role and expertise 236–7 judicial review abuse of discretion 58 access restrictions 56–7 adjudication, formal 399, 447–9 adjudication, informal 447, 449 arbitrary and capricious test 76–7, 79–80, 83, 373 assumptions of authority 397–9 authority for 55 challenges 279–81 Chevron doctrine 42, 57–8, 276, 394–9, 402–3, 449, 690–92 closed arguments/reasons rules 448–9 closed record procedures 455–6 closed record requirement 447–50 closed review models 44 closed review rule 449–50, 452, 458–9 Congressional intent, and 394–9, 402–3 damages claims 269 deference doctrine 58, 447–8 errors of law 394–9 force of law, and 398–9 hard look review 373 Hepburn Act 1906 273

historical development 34, 268–75 ICC reasonableness 272–5 importance 53 initial agency proceedings 446, 458 Israeli open practices, differences from 458–60 issue exhaustion 449 jurisdictional error 270–71, 399 land claims 270–71 law-fact distinction 274–7 legislation 53, 277–83 legislative intent, and 394–9, 402–3 model 446 Motor Vehicle Manufacturers case 76–7, 83 notice and comment rulemaking 372–4, 399, 450, 458–9 policy implementation review 451–2 political influences 55–8 positive political theory (PPT), and 71–2, 79–80, 83 pre-enforcement review 282–3 process review 372–3 public interest, in 56–7 public participation vs. expertise 371–4, 379, 382–4 purpose 280–81, 446 reasonableness review 76–7, 79–80, 83, 111, 272–7 sandbagging 448, 450 scope of review 446 standing, public petitioners 457 standing rules 525 statutory requirements 279–80 step zero 397–9 substantial evidence test 448 substantive review 373–4 textual interpretation 395–9 timing, relevance of 280–83 judiciary appointments 45, 47 political influences 56–7 political pressures on 45, 55 legislation delegated authority 52–3 intelligible principle 52–3 judicial review, and 53, 277–83 Presidential lawmaking 48 military and security contractors accountability agents integration 572–3 accountability, generally 567–8, 574 administrative control reforms 574–8 codes of conduct 575–7 compliance mechanisms 574–8 deployment trends 554, 566–7 disciplinary powers 574–6

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722  Comparative administrative law ethical duties 573 independence, need for 573–6 international law enforcement, and 568 military court jurisdiction over 575 military lawyer compliance agents 568–9, 572–4 Montreaux Document 576 obligation exemptions 567 organizational structure influences 568–9, 574–5, 578 PSC-1 certification 576–7 public values conflicts 554, 566–7, 569, 572–4 rules of engagement 572 training requirements 575–6 Uniform Code of Military Justice 575 notice and comment rulemaking 46, 48, 258–9, 265, 295, 458–9 public participation vs. expertise 371–4 Office of Information and Regulatory Affairs (OIRA) administrative burden oversight 342 background 335–6 benefit-cost analysis 340–41, 345–7 courts, interaction with 340–41 functions 338, 340–42, 344–6 impacts 345–6 independence 337, 338 limitations 341, 346–7 powers 340–43 procedure rules 342–3 prompt letters 341 review eligibility criteria 346 review methods 346–7 review, place in policy cycle 338, 343–4, 347–8 structure 337–8 time limits 343 transparency 343 President powers 41–2, 46–8 removal 53–4 privatization applicable law 556, 560–61 constitutional law, and 543, 560 military and security functions 554, 566–7 trends 356–8, 553–4, 566–7 public participation hybrid procedures 371 model 254, 377, 382 notice and comment rulemaking 258–9, 265, 295, 371–4 vs. expertise 371–4, 379, 382–4

public power control mechanisms 611–12 diffusion 604, 612 public spaces, law of 514–15 constitutional protection 525–6 federal land ownership 514 judicial review standing rules, and 525 public forum doctrine 520, 522 public trust theory 515, 518–19, 524 reason-giving accountability, and 268–72, 278–80 Federal Trade Commission 277–8 historical development 268–9, 277–8 reasonableness review 76–7, 79–80, 83, 111, 272–7 rulemaking, and 268–72, 277–83, 612 reasonableness review 111 arbitrary and capricious test 76–7, 79–80, 83, 373 development 269, 272–7 ICC cases 272–5 law-fact distinction 274–7 timing, relevance of 280–83 rule of law tensions 34, 41–3 separation of powers 235–6 constitutional restrictions 46, 49–51, 279–80 delegated legislation, and 51–2, 279–80 electoral process 40 judicial review 279–80 limitations on 41 need for 44 parliamentary systems, compared with 45–8 trends 543–54 voidness vs. voidability 424–7, 433 Universal Declaration of Human Rights 1948 107 urban spaces see land and planning law under Japan; public spaces, law of US v Mead Corporation (US) 397–9, 691 validity see also invalidity; voidness and voidability presumption of 421 Van Gend & Loos v. Nederlandse Administratie der Belastingen (EU) 624 Varju, M. 130 Varoufakis, Yanis 687 Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council (US) 372–3 Vodafone v. OFCOM (UK) 471–3 voidness and voidability annulment 422

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Index  723 apparent paradox 431 characteristics 421–2 choice of 432–3 conflicts 297–8, 420, 423–5, 432–3 conservation principle, and 430 differences between 429–32 dualist systems, in 426–9 enforcement variations 430 France, in 423–4 functions 429–32 Germany, in 424, 426, 430 historical development 422–5 imprescriptibility of voidness 431 Italy, in 424, 427 Latin America, in 422, 424–5, 427–8, 430, 433 legality, protection of 429–30 monist systems, in 425–6, 433 political influences on 423, 429 radical exclusion of effects 431–2

remedies 422 right to resist 421 rights, protection of 431–2 Spain and Portugal 425–6, 430, 432 UK, in 424, 428–9 United States, in 424–7, 433 valid acts 422 voidable acts 422 Wednesbury test 78–9, 111, 410, 463–4 Weiser, Philip 212 welfare state 32 administrative law, impacts on 106–8, 355, 366 Wilson, Woodrow 30–31 World Trade Organization (WTO) 116 Wyman, Bruce 269 Yeap Wai Kong v. Singapore Exchange Securities Trading (Sing) 588–9

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