The European State has become a Modern Leviathan
The management of the EU budget and the role of the European Commission in the EU policy process have been key topics in debates over European integration in recent decades. César Baena and Michael Neubert argue that the growth in EU bureaucracy that has occurred during the integration process raises questions about how taxpayers’ money is being spent. But they write that a wider problem is the growth of the state more generally across Europe: they suggest that as European politics has become more technocratic, decisions have become more distant from voters, aiding the rise of anti-establishment politics.
The 2019 elections for the European Parliament provide a good opportunity for every voter and taxpayer to take a closer look at the workings of the EU bureaucracy and evaluate how their tax money is spent.
In 2012 Michaela Schiessl published a famous piece in the international edition of Spiegel magazine about the inefficiency and complexity of the EU bureaucracy. In her article, Schiessl quoted the words of German politicians and members of the European parliament worried about the workings of the EU bureaucracy. Sven Giegold, a member of Germany’s Green Party, stated that the EU “has now become too complex for a democracy”.
Holger Krahmer, a member of the Free Democratic Party, pointed out that “we are heading for a dictatorship of bureaucrats” and that “neither the Council of the European Union nor the European Parliament has the muscle to oppose the power of the bureaucrats”. In turn, the Secretary General of the Taxpayers Association of Europe, Michael Jaeger, noted that “unfortunately, the history of tax wasting and subsidy fraud is as old as the EU itself.”
What is the problem with bureaucracy?
In his seminal work, Bureaucracy and Representative Government, William Niskanen famously analysed the failures of bureaucracies. More recently, Marcel Côté has argued that public bureaucracies are less efficient than private organisations largely due to the absence of competition and profit goals. Bureaucracies are not subject to the same transparency measures and benefit from a weaker governance system.
The modern technocratic bureaucracy that reigns at most levels of the state in Europe is moved by its own budget-maximising and bureau-shaping precepts oblivious to political realities on the ground and citizens’ interests. Newly elected parliamentarians often lack the expertise to efficiently oversee and control complex bureaucracies with a yearly budget of about 160 billion euros. Thus, unelected and unaccountable bureaucrats often tend to ‘muscle out’ parliamentarians and especially voters with excessively complex bureaucratic systems and norms. So far, their own auditing and controlling mechanisms (e.g. EU anti-corruption control or the EU court of auditors) and transparency initiatives don’t seem to have solved this governance problem.
Every organisation seeks to grow. This is also true for bureaucracies. Bureaucracies produce laws. These are their products. Each crisis, each entry of a new EU member state, is met with a set of laws and the corollary bureaucracy to enforce them. An example of this is the 2015 refugee crisis in Germany, which led to hiring twice as many government officials to cope with the various demands of the crisis.
A modern Leviathan
The inefficiencies attributed to the EU bureaucracy are but an indicator of the larger problems that befall the modern European state. In many European countries, the state, to ensure its survival, extracts more and more taxes from its citizens and issues laws and regulations. It is hard not to think about Hobbes’s Leviathan, an entity never satiated and ever growing. A limited, accountable and cost-efficient bureaucracy can promote prosperity. A Leviathan, however, can lead to stagnation and dystopia.
The turbulence and messiness of contemporary societies are often attributed to the failures of the market. However, a closer look indicates that the real causes are found in how the state operates. This confusion has been fuelled by neo-Keynesian authors advocating government intervention in an effort to solve financial crises and generate short-term employment. With his warning against the dangers of central economic planning, the work of Hayek provides a refreshing light out of the chaos in which societies are currently emmeshed.
Research by Checherita-Westphal & Rother has shown that a government debt of 70-80 per cent of GDP has a negative impact on economic growth. According to Eurostat, the euro area has an official average government debt of 86.7 per cent of GDP. Heavily indebted countries like Italy or Greece have on average lower growth rates. Due to the high levels of government debt, the European Central Bank has no choice but to keep interest rates down to allow governments to service their debt and avoid bankruptcy.
The rise of anti-establishment politics
Far from the precepts that accompanied its development after WWII, the state that was created to ensure the welfare of its citizens has grown into a self-serving entity that behaves according to its own logic, ruled by an entrenched technocratic bureaucracy. The disconnect between the reigning technocratic bureaucracy and the citizen largely explains the rise of parties and movements that were hitherto on the fringes of the political spectrum: the Alternative für Deutschland (AfD) in Germany, Rassemblement National (formerly Front National) in France, Vox in Spain, to name but a few.
In some countries, anti-establishment movements are in power: Lega and the Five Star Movement in Italy, Law and Justice in Poland, the Freedom Party in Austria, Fidesz in Hungary. These movements share a critique of the EU bureaucracy and its attempts to regulate markets, impose rules on economic and technological development, and establish quotas for migrants. Often called populists, they seek to dismantle the EU bureaucracy and take power back to the people (i.e. the nation state or smaller units of decision-making). Brexit and the gilets jaunes movement in France have emerged within this context.
If the EU bureaucracy insists on its homogenisation zeal and its penchant for churning out laws, over regulation and budget expansion, the end of the EU as we know it will be nigh. If the focus of its bureaucracy is not drastically circumscribed to very limited functions, the disconnect with citizens will continue, in turn fuelling the rise of political movements whose agenda is to essentially dismantle the whole of the EU project, discarding the bad along with the good.
César Baena is Dean and Director of Doctoral Research at the International School of Management (ISM). He holds a PhD from the London School of Economics. Michael Neubert is a Professor at the International School of Management (ISM) and chair of its Strategic Management Committee. He teaches international business, strategic management, and international finance. He is the CEO of the international market development firm C2NM LLC and an investor in high-tech start-up firms.
This first appeared on the LSE's EUROPP blog.
