Is Experimentalist Governance Self-Limiting or Self-Reinforcing? Strategic Uncertainty and Recursive Rulemaking in EU Electricity Regulation

Abstract

Is experimentalist governance (XG) self-limiting or self-reinforcing by virtue of its relationship to strategic uncertainty as an essential scope condition? This paper tackles this important but understudied question by elaborating a series of ideal-typical pathways for the temporal evolution of XG in specific policy domains, ranging from reversion to hierarchical governance through endogenous reduction of strategic uncertainty at one extreme to institutionalization of experimentalism as a multi-purpose governance architecture at the other. It then goes on to test the empirical validity of these contrasting theoretical expectations about the long-term relationship between XG and strategic uncertainty through a process-tracing analysis of electricity regulation in the European Union (EU) over a series of policy cycles since the 1990s. Building on and extending previous research in this domain, the paper shows how in a key problem area (cross-border network pricing) considered to exemplify reversion to hierarchical governance through endogenous reduction of strategic uncertainty, XG has in fact never withered away. In another key problem area (cross-border network access), the paper finds that, thanks to XG, policy actors came to identify successive solutions as nested inside one another, while never considering any one solution as definitive. Finally, the paper shows how policy actors, recognizing the pervasiveness of strategic uncertainty across the whole domain of electricity regulation, have come to institutionalize XG as a multi-purpose governance architecture. Following the Bayesian logic of theory-testing process tracing, the analysis thus strengthens empirical confidence in the theoretical expectation that XG is self-reinforcing, while diminishing confidence in the claim that it is self-limiting. The paper concludes by discussing how far these findings may travel to other policy fields within and beyond the EU.

Keywords: experimentalist governance, strategic uncertainty, European Union, regulation, electricity, process tracing