From inter-institutional to social accountability
The way in which European and national regulation of privatized industries has been carried out in many policy sectors has led to the massive diffusion of IRAs that have varying degrees of autonomy and varying kinds of accountability (Thatcher 1998; Thatcher and Stone Sweet 2003). The increasing relevance of IRAs in diverse policy domains does not free them entirely from any kind of supervision and control and so they do not have much discretion in decision-making. Nevertheless, independent regulators reduce the discretionary powers of central governments, due also to the fact that the EU (rules and directives) plays an increasing role in shaping national governance and national regulatory policies (Baldwin and Cave 1999; Jordana and Levi-Faur 2004; Lodge 2008). Thus, IRAs occupy an anomalous position with regard to autonomy and responsibility. Commissioners are not elected and therefore have no direct accountability to voters or to the members of parliaments. Nevertheless, IRAs are supposed to solve problems that central governments cannot cope with in regulating a changing world. In particular, the ability to reduce time inconsistency of political regulation depends on the IRAs' ability to interpret changes and to translate them into options, rules, procedures and policy tools. The institutional design reflects the way in which the accountability of IRAs, as specialized problem-solving institutions, is addressed and treated (Braun and Gilardi 2006). The public scrutiny of delegated regulatory policy remains a crucial aspect of accountability in democracy due to the great expansion of the regulatory state. The claim for increased IRA accountability is generally based on the degree of independence and autonomy of these regulatory institutions, and is related to the need for increasing control and direction over their activities and effectiveness (Thatcher and Stone Sweet 2003).
Thus by whom, and when and how, can IRAs be held accountable? Looking at the traditional and constitutional distinction of powers, we may say that parliaments, national executives and courts have different methods and different channels to exercise control over IRAs. The enforcement of accountability ranges from statutory law that disciplines the appointment and removal of commissioners, competences, budgets and the degree of autonomy in decisions with regard to organization and personnel (interna corporis), right through to the judicial review processes that affect the content of regulation and that can affect substantive regulatory policies (Majone 1999; Gilardi 2008). The perspective of inter-institutional accountability can be complemented by an additional functional dimension introducing a radical change in the ways of looking at accountability relationships, their mechanisms and tools (Dente et al. 2012). IRAs have a policy mandate from majoritarian institutions, and this refers not only to horizontal (inter-institutional) accountability but also to downwards accountability, related to IRAs' policy constituencies (regulated interests and stakeholders). Considering IRA diffusion as a shift from an input-based to output-based democratic legitimacy (Majone 1999) leads to the idea that this shift in legitimacy reflects a concomitant shift in accountability, that is to say, in constituency. The idea of a multiplicity of constituencies (fora) has a long tradition in political science, and 'is fully consistent with many of the public organization theories that embrace the notion that agencies have many competing constituencies upon which they are dependent for resources' (Boschken 1994: p. 308).
Two basic elements radically change the accountability game in regulatory processes (Black 2008, 2009). First, a multiplication of non- majoritarian policy domains and the growing complexity of the architecture of democratic governance have raised the problem of keeping democratic legitimacy processes active. Moreover, the rise of the regulatory state can be interpreted as part of the phenomenon of the so-called 'audit society', that is to say the diffusion of formal and informal forms of scrutinizing, monitoring and controlling public and private activities, delegating specialized functions to public (agencies) and private (corporations) institutions (Power 1997). The explosion of audit functions in democracy is not merely a matter of management technique and the controlling of financial resources. Rather, it can actually represent a change in the style of government: '... the explosion of an idea of public scrutiny that is internal to the ways in which practitioner and policy makers make sense of what they are doing' (Power 1994: p. 6). Accounting is constitutive not only of a more controlled, informed and open style of decision and communication (Cohen 1985), but also of a different mode of governance (Scott 2001; Heritier 2001). The metaphor of the 'audit society' can be considered a way of rethinking, reshaping and displacing public accountability (Scott, 2001; Scharpf 2003; Majone 1999), a way of creating certain conditions for ensuring downwards legitimacy in the expanding regulatory state. How can targets, activities, procedures and interactions be rendered more visible, intelligible and assessable outside the regulatory 'clubs' or 'enclaves' (Moran 2003)?
As outlined in the introduction of this volume, institutional accountability arrangements refer to institutionalized accounting practices and relationships that proceed in three different directions: upwards, in a hierarchical system of control of steering and sanctioning agents (Lodge 2004: p. 2); downwards, in non-hierarchical mechanisms of interaction and dialogue with citizens and stakeholders (Verschuere et al. 2006); and horizontally or inter-institutionally, between agents or institutions of similar status, in order to prevent abuses (O'Donnell 1999; Pasquino 2011). At each of these levels, the actor has an obligation to explain and to justify his or her conduct, the different fora can pose questions and pass judgement, and the actor may face consequences (Bovens 2007: p. 184).
We will focus on downwards, or social, accountability in order to discuss the tools and techniques IRAs adopt to facilitate the public scrutiny of regulatory policy. Social accountability is intended as
'mutual learning', which seeks to provide more flexibility and adaptability of regulation to social, economic and technological development and change (Dorf and Sabel 1998). The idea of public accountability as answerable social relations is related to the openness of policymaking processes and to scrutiny (Lodge 2004: p. 2). While scrutiny has been developed as a relationship based on the ability of majoritarian institutions to monitor, audit, control and sanction independent agencies (Biela 2012), the IRAs as accountability fora for regulated subjects are dimensions that have apparently been previously eclipsed. In particular, the dimension of the publicity and of the openness of regulatory policy process, as a mechanism for accountability regarding IRA relationships with economic and societal stakeholders, has been almost ignored.
Public accountability relates to openness and, in modern political discourse, 'accountability holds a strong promise of fair and equitable governance' (Bovens 2005: p. 183) and has in recent decades become an icon of good governance. Transparency is associated with prescribed standards of making the regulatory process accessible and shared (Lodge 2004). Transparency can also be related to the traditional issue of information asymmetries between IRAs and industries. If we look at the rule-making process, the demand for information occurs not only in the context of the relationship between majoritarian and non-majoritarian institutions but also in the context of the relations between regulators, regulated subjects (industries and operators) and stakeholders.
In other words, the lack of transparency, namely the inadequacy or asymmetry of information between IRAs and other institutions, as well as between regulated industries and stakeholders, can deeply affect all accountability dimensions. Distorted information - as a mechanism of hierarchical accountability - can lead to budget cuts (Righettini 2011) or even to the statutory dismantling of the IRA. Moreover, when IRAs do not circulate data and information regarding their functioning and activities, audit functions are limited or rendered useless. Finally, poor transparency can affect the capacity of stakeholders and citizens to participate or negotiate effectively. Therefore, transparency is a conditio sine qua non of accountability.
From this perspective, we can see IRA transparency tools as institutional arrangements for achieving policy and social accountability and for incorporating democratic scepticism into expert skills. The traditional question of who guards the guardians remains, and the dual problem of balancing powers and surveillance continues to be a crucial question in analysing the regulatory role of IRAs in modern democracies. At the same time, however, the independent relationships of
IRAs with public and private stakeholders shape rule-making processes and networks in different ways, and lead to new and different models of accountability. Transparency in the regulatory process is a different way of looking at downward and social accountability embedded in the system of relationships within regulatory policies and rule-making processes.
In this chapter we present an in-depth analysis of downward and social accountability, not only because it has thus far been little explored but also because it has been indicated as complementary to upward and horizontal accountability (Scott 2000).