The New European Agencies: Regulation by Information

Abstract

The new European agencies have been denied powers normally granted to regulatory bodies. In most cases their functions are limited to providing information and networking with other institutions. Thus, they seem to be doomed to play an auxiliary role; bur they could also turn their statutory limitations into opportunities by developing information-based modes of regulation more in tune with current economic and political conditions than the coercive powers denied to them. In fact, a good deal of empirical evidence suggests that regulation by information is often more effective than direct regulation. However, information can change expectations and behaviour only if it is credible. In turn, credibility depends crucially on reputation. It is suggested that networking could help the agencies to enhance their reputation and independence. An agency that sees itself as part of a transnational network is more motivated to defend its independence and professional integrity: unprofessional or politically motivated behaviour would compromise its international reputation and make co-operation more difficult in the future. Actually, the network may be viewed as an intangible asset carrying a reputation that is beneficial for efficient information exchange.