Little bit of history from Ogre

Last week I was in Riga and staying at my friend’s place in Ogre, which is around 40 minutes from the centre. During the week, I visited the local history and art museum. The museum used to be a bank building during the Soviet period. For more info about the museum, you can find here.

                                      USSR State Bank - Ogre Branch 

                                        Bank building from 1987 

                            Some kind of a mechanic counting machine 

        Body armour for the personnel working with money transfer 

                              Old school style counting 

                                       Before the renovation 

Office space from 1990 as the bank got privatised. Check out the computers. 

                 Train schedule between Riga and Ogre. 

                          Nivea cream old school mode 

                         Hipster bike before it was cool! 

  Part of the exhibition was about the WWI period and the German army. 

 

   
                         Equipment for trench warfare. 

            Ogre civilians as refugees during the war. 

Competition policy as example of the “slow” process

In this series of texts, I am writing about my research regarding the contemporary debate when it comes to the neo-functionalism regional integration theory.

In his study of the neo-functionalism’s applicability, Lee has analysed the competition policy, which is an example of supranational governance over the economy. He argues that Haas interpretation of regional integration process and EU:s development still holds analytical purchase, where neo-functionalism is a mid-range theory that applies to the dynamics and development of individual policy sectors and sectorial integration process. With its original focus and core around economic aspects, the neo-functionalism is based on two inter-related claims and predictive views. Firstly, that integration occurs when organised economic interests pressure governments to manage economic interdependence resulting in centralisation of policies and the creation of common institutions. Secondly, that any initial decisions to integrate the polity results in both economic and political spill-overs which push regional integration forward. Already starting with ECSC thus at a more limited degree, the decision-making process was later developed into the aspects relating to promoting competitive market structures, breaking up anti-competitive behaviour such as market-rigging, price-fixing cartels and abusive monopolies. This institutional process were performed by supranational governance. The Commission was selected by the national governments of EEC (European Economic Community) as the principal competition agent with exclusive powers of investigation into suspected violations of the competition rules.

Furthermore, the focus on the supranational development meant that the neo-functionalistic studies shifted the investigative attention from the national executives and the decision-making process. The focus was shifted to the aspects identified as institutions, technocratic elites, interest groups and politicians operating at supranational level. The original assumption of neo-functionalism was based on that these actors pursued their own interests and by doing so they provided the dynamics for further integration, including the argument that change of loyalties and political transformation was part of the regional integration process. The existence of such supranational activity was, as mentioned earlier, understood to unleash a self-reinforcing dynamic labelled as spill-over that culminated in further and “deeper.” integration. In the case of competition policy, it is an early example where national governments had established supranational process with its own personnel like administrators, experts and lawyers whose decisions came to influence and determine policy approaches at both national and EU-levels of governance.

Within the competition policy, the development of DG Competition throughout the 1960s and 1970s was a process of slow accumulation of experience and development of norms and values that have been spread within the Commission. It resulted in aspects such as the formation of EU competition law (anti-trust) with inspiration from the USA. Another example, during the time of SEA implementation process, was the institutional determination and interest of the Commission to push the notion of competition into the more “sensitive areas” for the states such as market liberalisation of public utility. There were also examples regarding the imposition of ever-higher financial levies for infringing the competition rules or encouraging whistleblowers to inform the Commission about cartel activity. These actions were performed with “limited resources” (for example, in 1990 DG Competition had a staff of only around 400 individuals). As Lee pointed out this process, being an example for the notion of the political spill-over is particularly applicable, as the supranational officials became informal political entrepreneurs, also resulting in member state governments to delegating further powers to the supranational level. 

Neo-functionalism and federalism

In this series of texts, I am writing about my research regarding the contemporary debate when it comes to the neo-functionalism regional integration theory.

The presentation of  the neo-functionalism has been mostly limited to Europe as a region being “unified.” by the regional integration process and the question about a need for a “general theory” regarding the regional integration ( regardless if it is about EU, another regional or a supranational polity ) has been discussed. The theory of federalism is often seen either as an “ideological theory” of action, to promote European integration, or as a theory to explain the organisation of federations. The federalism theory can, therefore, be about both the states and supranational union of states. Within the school of federalism, it has also been argued that the federalism has its limitation. Federalism itself is not enough for a general theory to comprehend the understanding of all of the regional integration processes. Neo-functionalism is therefore seen as a complementary theory that can explain the “organic” or “slowly” process of regional integration.

From a federalist point of view, it has been argued that the principles of federalism are based on the combination of “self-rule and shared rule” principles. Making a difference from the unitary states, with usually one level of government, the federations are consisting of two or more levels of government. Federations may be organised very differently, for example by being more peripheral, where the state levels (subnational) are “strong” and with many competencies or by being more centralised, where the federal government has the predominant influence and power. Within the federalism theory, the regional integration is seen as the process leading or attempting to lead to a supranational federation by a normative approach with emphasis on aspects as “shared values”. 

Another important aspect of federalism is the view of the institutions. Except for the shared values or ”common culture” as the set of values, ideas and behaviour, it has been argued that the vital institutions are necessary. This is to prevent the federation from dissolving by having individual institutions as “guardians” of the treaties, constitutionalism and the federal idea. In this way, federalism and neo-functionalism have several similarities in interpreting the regional integration as a process of creation of stronger units than the individual states, including the importance of driving interests and shared values such as democracy.

Haas theoretical reasoning has stressed the original background conditions for the regional integration, where the entities should possess pluralistic social structures, have substantial economic and industrial development, and a common ideological pattern among participating units.  In 1964, together with Schmitter, Haas tried to loosen the theory’s close binding to the European integration idea to give the neo-functionalism general applicability. The result was a model with background conditions such as size of the unit, rate of transactions and degree of pluralism. It also regarded conditions at the time for formation of economic union as governmental purpose, powers and functions of the new institutions. In addition “cultural considerations” were written as a part of the framework, especially when it comes to the concepts of ‘pluralism’ and ‘style of decision making’ as important. 

The central concept of the analysis was the spill-over leading to political integration that would, according to Haas, take place to secure the “full benefit” of the integration process. The political pluralism was seen as a process connected to the “full.” political integration. The spillover effect meant that integration was an intrinsically sporadic and conflicted process. Under the conditions of democracy and pluralistic representation, national governments wound find themselves increasingly entangled in a regional pressure. Resulting in the process of national governments resolving their conflicts by conceding a wider political scope and developing more authority to the regional organisations they have created, the supranational authority. Part of the view was also that eventually, the citizens of individual member states would begin shifting more and more of their expectations and sense of loyalty to the region, making the process of political integration easier.

The similarities between federalism and neo-functionalism are, therefore visible. Dosenrode also explained neo-functionalism as a “supplement” of federalist theoretical approach. The federalism can explain the so-called ‘big bang’ integration based on a process of political voluntarism as in USA, Australia, and Canada. What federalism cannot explain similarly is the slow, ‘organic’ integration process of regional integrations, something that neo-functionalism in its newer version can do. Dosenrode also claims that these two approaches should be seen as complementary and they are, jointly, a frame that captures the processes of regional integration.